German FDI to China breaks record as large companies move in. Small companies should do the same.

In 2023, German Foreign Direct Investment (FDI) into China hit an all-time high. This came despite calls from EU regulators and officials for German industry to reduce its footprint in the China market. The boom in investment was led by large companies, while small- and medium-sized enterprises (SME’s) were more likely to suspend investments abroad, or to even withdraw from foreign markets. SME’s should strongly reconsider this strategy, in their own businesses. Germany is solidly in recession, with much of Europe struggling with slowing economic growth which will only persist over the rest of the decade. Asia, however, is booming, and companies that abandon these markets will suffer irreparable harm in the long term. The biggest US and German companies are doubling down on their successes in this part of the world; SME’s are highly advised to do the same. Resources and links: Germany’s H1 2023 FDI in China Remains Strong Despite “De-Risking” Strategy German Investment in China Hits New Peak Despite Calls for Caution The Yuxi Circle: The World’s Most Densely Populated Area The world’s largest consumer markets in 2030