Workers work at a workshop of the ElringKlinger Plastics Technology (Qingdao) Co., Ltd. in Qingdao, east China's Shandong Province, April 2, 2025. [Photo/Xinhua]

ElringKlinger Plastics Technology (Qingdao) Co., Ltd., a German-invested high performance plastics producer, is adding a new production facility in its factory located in the Qingdao Sino-German Ecopark in Shandong Province.

The new facility is part of the ElringKlinger High Performance Plastics Asia Headquarter Project and is four times larger than its existing plant in the Ecopark.

When operational, the project's annual output value is expected to rise from the current 50 million yuan (about 6.94 million U.S. dollars) to 300 to 400 million yuan, according to Wang Yaowen, operations director of ElringKlinger Plastics Technology (Qingdao) Co., Ltd.

Investment of the company is expected to rise from 20 million yuan in Phase I (2019-2024) to an estimated 200 million yuan in Phase II (2025-2029), Wang added.

This project exemplifies how German companies are ramping up their investments in China. German investment in China has demonstrated a marked upward trajectory in recent years, particularly in sectors such as new energy vehicles (NEVs), chemicals, and machinery manufacturing.

According to data released by China's Ministry of Commerce, in 2024, the country saw 59,080 newly established foreign-invested enterprises, marking a 9.9 percent year-on-year increase. Notably, Germany's actual investment in China grew by 2.2 percent during this period (including free port investment data).

During the first two months of 2025, the number of newly established foreign-invested enterprises nationwide reached 7,574, reflecting a 5.8 percent increase compared to the same period last year. Within this time-frame, Germany's actual investment in China surged by 54.7 percent (including free port investment data).

A growing number of German companies have discovered fresh avenues for growth in China, moved their product offerings upmarket, and diversified their distribution networks. This strategic expansion has reinforced their bullish outlook on investing in the Chinese market.

In the Phase II workshop of Siempelkamp (Qingdao), Xue Bingshi, wearing protective goggles, operates a Computerized Numerical Control (CNC) machine tool towering over 4 meters. He mills the surface of a metal plate, which will undergo 17 processes and take over 10 hours before it is transformed into a finished component.

This German-invested machinery equipment company has expanded its investment three times since establishing its presence in China in 2014. To date, its registered capital in China has increased to 14.79 million euros (about 16.7 million U.S. dollars), with total investment now reaching 36 million euros.

The company has three phases of construction completed and a fourth one coming up in 2026. "We will expand our workshop capabilities, and that is only one part we are planning for further expansion," said Konstantinos Karakolidis, CEO & CTO of Siempelkamp Qingdao.

"We believe that China is growing and we want to be part of this market, so that's why we continue to invest," Karakolidis stated.

ContiTech Qingdao Rubber & Plastics Technology Co., Ltd., a subsidiary of German automotive component giant Continental, located near Siempelkamp Qingdao, is scaling up its investments in China. In September 2024, the company signed an investment agreement to establish its Asia-Pacific Regional Technical R&D Center for the vehicle parts solutions division in China, with a total investment of 15.96 million yuan.

"We'll keep investing this year and next year a total amount of approximately 16 million yuan into research and development laboratory capacity that will further enhance our capacity to develop innovations for the market," said Maximilian Schoengart, an executive at the R&D center.

In December 2024, the German Chamber of Commerce in China released its 2024/2025 Business Confidence Survey, revealing that a staggering 92 percent of member companies intend to continue their operations in China. Furthermore, around 51 percent of German firms plan to boost their investments in the country over the following two years. Of these, 87 percent cite the need to remain competitive as their primary motivation.

An aerial drone photo taken on Aug. 20, 2023 shows a view of Volkswagen (Anhui) Automotive Company Limited in Hefei, east China's Anhui Province. [Photo/Xinhua]

While investing in China, many German companies are dedicated to bolstering local supply chains. As Volkswagen Group's first new NEV-focused joint venture in China, Volkswagen Anhui has established a robust network of over 500 production suppliers and more than 1,000 general purchasing suppliers.

Volkswagen has expanded its footprint in the Chinese market this year. The automaker announced a partnership with Chinese NEV manufacturer XPENG in January to develop a superfast charging network in China. In March, it struck a strategic deal with China's First Automobile Works, laying plans to roll out 11 new models tailored for Chinese consumers, starting in 2026.

As noted by some industry experts in Germany, the continued expansion and growing investments by German companies in China underscore how the country's high-quality social-economic development persists in generating mutual benefits for international businesses -- German firms included.

"We have indeed record German investments in China in 2023 and 2024. And very often these investments are R&D centers. And the reason is that China has the best competence in many fields," said Hermann Simon, a renowned German economist known as the father of the "Hidden Champions" theory, during his recent visit to China.

"China is not only catching up in innovations, but already leading in many sectors," Simon told Xinhua. He led a delegation of over 20 representatives from German enterprises and consulting institutions on a visit to the cities of Hefei and Bozhou in east China's Anhui Province, from March 23 to 25.

To further support German companies' operations, China's premium business parks are enhancing business ecosystems to attract German investment.

The Qingdao Sino-German Ecopark, for instance, has worked to cultivate a better business environment for German companies by safeguarding intellectual property rights and organizing round-table meetings with government officials to address their practical needs effectively.