(Yicai) May 17 -- Chinese interest in investing in Germany rose significantly last year, with renewable energy one of the key areas, according to a report by the European country’s economic promotion agency.

The number of Chinese investment projects in Germany hit 200 in 2023, up 42 percent from the year before, reaching the highest value since 2017, Germany Trade & Invest said in its annual report on foreign direct investment into the country published on May 15.

Chinese companies ranked third in terms of the number of investment projects in Germany, behind the United States with 235 and Switzerland with 202.

“For many years, China has been one of the most important sources of foreign investment for Germany,”Thomas Bozoyan, the report’s author, told Yicai. “After the end of the Covid-19 pandemic, Chinese companies are once again significantly increasing their global involvement.

“Germany is also benefiting from this, as many projects that were previously being planned could not be realized due to travel restrictions,” he said. “Now, these investments are being made up for.”

There was a sharp rise in investment by Chinese firms in the renewable energy sector, accounting for 20.5 percent of the total project count, which was more than three times the figure in 2022, the report showed.

The machinery manufacturing sector accounted for 14.5 percent of Chinese projects, a 52 percent gain, while electronic products made up 11.5 percent, double that of 2022, per the report.

The most prominent areas of business engagement for Chinese companies were marketing and sales, accounting for 45 percent of the total. Research, development, and production tallied 22 percent, while the establishment of European headquarters worked out at 12 percent.

“Chinese companies' investments cover a wide range of industries, indicating the extensive scope of Chinese corporate investments,” Bozoyan said. “Germany's economy also offers a diverse range of industries for such investments. Currently, Germany is undergoing a transition to achieve climate neutrality by 2045.”

In recent months, there have been visits to China by top-level German political figures, including Chancellor Olaf Scholz and Bavarian Governor Markus Söder. Plans to strengthen economic and trade cooperation with China have been among the key talking points.

Despite discussion within Europe about "de-risking" in the relationship with China, the Asian country’s trade with Germany continues to grow strongly. According to a report by the German Institute for Economic Research, direct investment from Germany to China reached a record high of EUR11.9 billion (USD12.9 billion) in 2023, up 4.3 percent from the year before.

German investment in China last year accounted for 10.3 percent of the country’s total overseas investment, reaching the highest level since 2014. According to data from the Federal Statistical Office of Germany, their bilateral trade reached EUR253.1 billion (USD274.4 billion) in 2023. China has been Germany’s largest trading partner for eight consecutive years since 2016.

Editor: Tom Litting