Beijing, February 28,2026: German enterprises are seeking to take the pulse of the Chinese market and ride the waves of its innovation momentum, with some making business trips right after the Spring Festival holiday and others doubling down on their deep-rooted presence in the country.
On Wednesday and Thursday, German Chancellor Friedrich Merz led a high-level economic delegation of 30 business representatives on a visit to China, where enterprises from both countries inked over 10 business agreements spanning industries including automotive, machinery, energy, logistics and finance sectors.
Merz took the new Mercedes-Benz S-Class for a test ride in Beijing on Thursday morning, experiencing its intelligent assisted driving system.
“This is amazing. I think it’s one of the future technologies for mobility,” Merz said after the experience, commending the close cooperation between German manufacturers and Chinese technology.
Mercedes-Benz has established a comprehensive local footprint and cooperation network spanning its entire industrial chain in China, the company said in a press release on Thursday. Its Chinese R&D team is playing an increasingly crucial role within Mercedes-Benz’s global R&D network, the statement noted.
“The development of electrification and intelligent transformation in China’s automotive market is remarkable,” said Ola Källenius, chairman of the Board of Management of Mercedes-Benz Group AG, who was among the German delegation.
“Mercedes-Benz has been deeply involved in the growth of China’s automotive market, and the country’s strong innovation network is also key for us in staying competitive for the future,” he added.
Mercedes-Benz was not the only German heavyweight seeking to gain deeper insights into the latest developments in the Chinese market during the recent visit, and was also not alone in deepening innovation cooperation with China.
“Over the past decades, China has become a global innovation hub with impressive technological capabilities,” said Carsten Knobel, CEO of German chemical and consumer goods giant Henkel, adding that the company will continue to invest and innovate in the Chinese market.
Knobel believes that by aligning Germany’s industrial expertise with China’s market dynamism and innovation strengths, the company can better address both industrial and consumer needs.
Bill Anderson, chairman of the Board of Management of Bayer AG, remarked that the company is deeply impressed by technological progress in China.
Also, the company believes that it has spotted huge opportunities in fields such as digital healthcare, AI-driven drug development and modern breeding technologies in the country’s latest policy blueprint.
These recent comments reflect a broader trend: German companies are ramping up their investment in the Chinese market, which is increasingly seen as an innovation hub rather than just a sales market.
Data from the German Economic Institute showed that new German direct investment in China had amounted to around 7 billion euros (about 8.26 billion U.S. dollars) in 2025, well above the roughly 4.5 billion euros a year earlier.
Michael Schumann, chairman of the Board of the German Federal Association for Economic Development and Foreign Trade, attributed this trend to China’s comprehensive industrial ecosystem and stable policy environment, which allow companies to plan further ahead and operate with greater certainty.
Schumann’s assessment is echoed by the experience of many German companies in Taicang. This county-level city in east China’s Jiangsu Province hosts more than 560 German enterprises with a total investment value exceeding 6 billion U.S. dollars, while many of them are now localizing R&D and production.
About three decades ago, Schaeffler, headquartered in Germany’s Bavaria, began its China journey in Taicang with a modest workshop of just 30 employees. By the end of 2025, Schaeffler had expanded to 19,000 employees across China, operating six R&D centers and 17 factories.
Today, more than 95 percent of the supply chain for Schaeffler’s automotive business in China is localized. “It reflects trust in China’s manufacturing and research capabilities,” said Lou Junfeng, head of a factory at Schaeffler’s Taicang manufacturing base.
According to Zhang Luoyin, deputy director of the Administrative Office of the China-Germany (Taicang) SME Cooperation Demonstration Zone, more than 600 Chinese firms have entered the supply chains of German companies in Taicang, while over 800 institutions collaborate with German enterprises in R&D, talent development and capital partnership.
“For precision, high-quality manufacturing, you need top suppliers, skilled talent and the right equipment — and here, it’s all in place,” said Christopher Praetzas, a German engineer who chose Taicang to start his business, which develops intelligent chassis components for automobiles.
When Praetzas decided to establish his business in Taicang three years ago, local government staff showed him around the industrial park and took him through the registration process the next day. “Taicang is an ideal place where you can focus on your work and enjoy a good life. Chinese partners are genuinely open to new technologies,” he said.
More than 20 service organizations offering legal, financial and lifestyle support have established operations in the city to assist German businesses, said Zhang.
The Taicang story reflects how China’s efforts to expand high-standard opening up have created a supportive environment for German and other foreign businesses, enabling them to thrive.
Earlier this month, China’s Ministry of Commerce held a roundtable discussion for German enterprises, where Chinese government representatives responded actively to the concerns of German companies regarding government procurement, intellectual property protection and business environment optimization.
With vast potential for cooperation in innovation, green development and the digital economy, China hopes German companies will increase their exports of high-quality products and technologies to China, and scale up their investment in China, said Vice Minister of Commerce Ling Ji.
Courtesy Xinhua
