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Chinese Takeovers of German Firms on the Rise

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Employees work at a Sany assembly plant. The company just acquired a German firm.
  • Why it matters

    Why it matters

    Seeking access to new customers, new distribution channels and advanced technology, growing numbers of Chinese firms are establishing beachheads either through investments or outright purchases of German companies.

  • Facts

    Facts

    • Investments are generally focused on industries identified by the Chinese government as critical to the nation’s future success such as mechanical engineering, electronics and automobiles.
    • China is now the third-largest investor in Germany behind only the United States and Switzerland.
    • Chinese direct investment in Europe now numbers 153, up from 122 the previous year, with Germany grabbing a 44 percent share, the highest ever.
  • Audio

    Audio

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For Germany, China was once a source of labor in the Far East, but Chinese companies increasingly are buying their way into the German economy as underscored by the recent deal in which SANY Heavy Industry acquired Putzmeister Holding, a manufacturer of concrete pumps.

The Chinese aren’t just buying. They’re also investing in new factories and logistic centers, and Germany is in especially high demand. In the past year alone, Chinese firms have made 68 investments in Germany, up from 2013 when they invested in 46 projects. Germany is outperforming Great Britain, where the Chinese initiated 29 projects, and France with just 14 projects, according to a study conducted by the London-based professional services giant Ernst & Young.

Chinese firms are seeking new marketing and distribution channels and more efficient access to German high technology. The industries involved are generally those the Chinese government defines as key technologies including mechanical engineering, electronics and the automobile industry.

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