, an association of German industry, scrutinised investment in China. It showed that between 2017 and 2021 China accounted for, on average, 7% of German foreign-direct investment and 12-16% of annual corporate profits, much the same as America, but far less than the, which provided, on average, 56% of corporate profits in the same period.
Another cause for concern is the cluster of huge German firms and industries that continue to rely heavily on China. The survival of its large carmakers and chemicals firms could hinge on access to the country. And China supplies 95% of the solar cells installed in Germany as well as 80% of laptops, and 58% of the circuit boards that are integral to other electronic goods.
Mr Matthes warns that companies will continue to pour billions into China unless the new policy provides incentives to do otherwise. If China’s threats to Taiwan turn nastier the consequences could be devastating for firms doing an ever-bigger slice of their business there. The latest tentative date for the publication of the new strategy is just after a meeting on June 20th between Olaf Scholz, the German chancellor, and Li Qiang, China’s prime minister. It is high time for a rethink.