Economic Nationalism
: The Key Factor Shaping Trade Relationships between China and Germany

  • Yu-Han Cai

Student thesis: Master's ThesisMaster of Philosophy


The internationalisation of Chinese companies is a subject that has received increasing attention, not only in international business research but also in international political economy. Since 2001, the scale of China’s overseas investment has increased substantially. More evidence suggests that in some countries, Chinese companies, especially state-owned enterprises, face greater institutional barriers than companies in other countries. Because the relationship between many Chinese companies and the Chinese government is ambiguous, many countries question whether Chinese investment may have political goals rather than commercial interests at its heart. While China is fast becoming an important outward direct investor, its companies are showing an increasing interest in locating in Europe, especially in Germany. Germany is China’s most important economic and trade partner in Europe. Since 2011, China’s annual investment in Germany has soared, due to the sharp increase in the number of Chinese companies’ acquisitions of German companies. By 2018, Germany had become the China’s largest outward foreign direct investment recipient in Europe. However, when Chinese investment brings economic interests to Germany, it may also have negative effects on Germany’s national interest. As Chinese companies invest in more industries, the number of investments in sensitive industries, such as energy, infrastructure, and defense, is also increasing. This has made the German government aware of the need not only to pay attention to the strategic intentions behind Chinese investments, but also to stop such mergers when necessary. In recent years, the German government has strengthened its regulations for the review of Chinese investments, revealing the prevailing trend toward protectionism which can be seen in the transactions of Aixtron, 50Hertz, and Leifeld, all of which were blocked by the German government during 2016 and 2018. This thesis applies economic nationalism to clarify the main factors that have shaped Germany’s response to Chinese investment
Date of Award2019
Original languageEnglish
Awarding Institution
  • Aberystwyth University
SupervisorAlistair Shepherd (Supervisor) & Charalampos Efstathopoulos (Supervisor)

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