Germans view Chinese investments with great skepticism

Globalization Germans view Chinese investments with great skepticism

Beijing often uses its economic power to exert influence over foreign governments. That is why there is great skepticism towards Chinese investors in this country - but the danger is overestimated.

People in Germany massively overestimate the share of Chinese investments in the Federal Republic and view them with deep mistrust. This is the result of a joint study by the Center for European Economic Research in Mannheim (ZEW) and several research institutes. Accordingly, the population estimates the share of Chinese direct investment at 33 percent, although it is actually only one percent. The basic preference for European or US investors does not change when respondents are informed about the true size ratios.

The study reveals the reluctance with an experiment: When taking over an insolvent German company, a Chinese buyer, according to those surveyed, had to save an average of around 350 out of 500 jobs in order for the offer to be considered as attractive as that of a European or US buyer who only saved 250 jobs. This corresponds to a surcharge of around 40 percent. With otherwise identical characteristics, offers from Chinese companies were chosen around 40 percentage points less often than offers from other EU countries. Compared to US investors, the gap was around 20 percentage points.

According to the study, the negative attitude arises primarily from fear of political blackmail. 64.2 percent of those surveyed rated Chinese direct investments as detrimental to Germany's political independence.

Facts could correct misjudgments and change the view of concrete economic benefits. “However, the fundamental preferences towards investors from different backgrounds hardly change as a result of such information,” explained co-author Li Yang from ZEW. "Our results indicate that skepticism about Chinese investments is not just based on a misconception about their economic importance." Concerns about political dependence and state influence could also play a role in the assessment.

In addition to ZEW, the Paris School of Economics, the Stone Center on Socio-Economic Inequality and the German Institute for Economic Research were also involved in the study. 2365 adults were surveyed.