German companies increased their investments in China by about a third during the first half of 2026, while sharply reducing their investments in the United States, according to a study conducted by the German Economic Institute “IW”, and seen by “Reuters” on Sunday.
The study showed that German companies invested an additional 5.6 billion euros ($6.50 billion) in China, compared to the same period in the past, based on the institute’s analysis of data from the German Central Bank.
This level of investments was in line with the average investments during one half year between 2020 and 2025.
“German companies have little choice but to continue investing in China,” said Jurgen Mathis, an expert at the German Economic Institute, describing the country as an important market for sales, as well as a “gym” through which companies can enhance their competitiveness, according to Reuters.
Mathis added that government support and the depreciation of the yuan make production in China artificially cheaper, which encourages German companies to expand their production locally with the aim of competing with Chinese companies in global markets.
“For Germany, this means the transfer of production and job opportunities to China,” Mathis said, calling on the European Union to stop what he described as “this unfair game” and to impose countervailing duties on Chinese imports.
On the other hand, German investments in the United States declined by about two-thirds to reach about 4.3 billion euros, according to the study, amid trade tensions and customs duties imposed by US President Donald Trump.
ECB monetary policymaker Martins Kazacs said the bank may need to raise interest rates gradually and with more steps to counter inflation before fuel costs, which have been raised by the Iran-linked war, begin to trickle down to wages and other prices.
On Thursday, the European Central Bank raised its key interest rate from 2.25 percent to 2.5 percent, in its second increase this year, warning that inflationary pressures resulting from the Iran-related conflict may be long-lasting, which strengthened market expectations for further tightening of monetary policy as soon as possible, perhaps by next October.
Kasacs, the governor of Latvia's central bank, sees room for more gradual increases in interest rates, as energy prices and general inflation rates remain at high levels.
He said, in a telephone interview with Reuters: “The justifications for taking further monetary tightening measures are increasing.”
Kasacs added that the 2.5 percent level, which the European Central Bank described as the upper limit of the neutral range that neither stimulates nor inhibits growth, should not be considered a final ceiling on interest rates.
“Interest rates may need to enter a restrictive range,” he said. “There is no invisible limit, or a certain high level that must be reached, for interest rates to exceed 2.50 percent.”
The inflation rate in the euro zone reached 3.3 percent last August, and the European Central Bank expects it to rise further in the coming months.
The European Central Bank can move without haste
Kazaks did not say whether he supported raising interest rates again in October, but he pointed out that the European Central Bank has room to move “step by step” and “without haste.”
“If we move step by step, we will be in a good position,” he said. Thanks to previous decisions that have proven to be appropriate, we can, until now, act without haste or tension.”
The Latvian official noted that the eurozone economy is operating at full production capacity, which may facilitate the transmission of higher fuel costs to final prices.
He said: “The output gap is shrinking, which means that the transmission effect to prices and wages may become stronger. This clearly represents an upside risk to inflation rates.”
Kazaks pointed out that inflation, which the European Central Bank expects to reach 3.6 percent during the last quarter of this year, is still within the range of “indifference” among consumers and companies, but this situation may change if the prices of basic commodities, such as fuel and food, rise further.
He added: “These goods are mostly daily purchases, which may increase individuals’ sensitivity to inflation, especially if inflation rates exceed wage growth rates.”
Agreed wages in the euro zone rose by 2.44 percent during the three months ending in June, compared to an increase of 2.56 percent during the first quarter of the year.
Copper prices continued to decline during trading on Monday, extending losses that began last week, in light of the continued uncertainty regarding potential US customs duties on imports of refined copper, which weakened investor sentiment and raised questions about the trends of inventory flows associated with these duties.
The three-month standard copper price on the London Metal Exchange fell by 0.20 percent to reach $14,212 per metric ton, by 03:13 GMT, while the most traded copper contract on the Shanghai Futures Exchange fell by 0.39 percent to 108,240 yuan ($16,139) per ton, according to Reuters.
Copper prices were under strong pressure last Thursday, following a report published by the agency stating that the White House has not yet decided on imposing customs duties on imports of refined copper, at a time when officials are balancing the risks of rising manufacturing costs with the goal of enhancing domestic supplies.
Analysts at the Chinese company "Everbright Futures" indicated that the markets are awaiting the US administration's decision regarding the Article 232 investigations, which is expected to be issued on September 28. They added that the repeated changes in the White House's position have increased the uncertainty surrounding inventory arbitrage, which leads them to adopt a cautious and negative view towards copper in the near term.
Copper traded on the American COMEX exchange lost more than 4 percent last week, while stock exchange stocks recorded their first decline since mid-June, falling by 0.02 percent, on Friday, to 767,504 short tons, equivalent to about 696 thousand metric tons.
American inventories have witnessed a continuous rise over the past months, driven by import flows into the American market, in anticipation of the imposition of customs duties.
On a broader level, a state of caution prevailed in base metal markets, with Asian stocks declining and oil prices rising by more than 2 percent as a result of renewed concerns about Middle East supplies, which increased concern about inflationary pressures ahead of the monetary policy meetings of the US Federal Reserve and the Bank of Japan this week.
In the other metals market on the London Stock Exchange, aluminum rose by 0.29 percent, nickel by 0.10 percent, while zinc fell by 0.53 percent, lead by 0.74 percent, and tin by 0.64 percent.
As for the Shanghai Stock Exchange, aluminum fell by 0.50 percent, zinc by 1.40 percent, lead by 1.79 percent, and nickel by 0.72 percent, while tin recorded the largest losses, declining by 3.04 percent.
