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German direct investment in China rose 4% to a record high of 11.9 billion euros ($12.7 billion) last year and increased as a share of the country's overall investment abroad, according to official Bundesbank data analysed by the IW institute.
The data underscores concerns that German firms continue to invest heavily in China despite the government's pleas for companies to reduce their exposure and its sharp cut in investment guarantees for the country.
German companies have invested as much in China in the past three years as they had in the six years prior, according to the IW institute report, obtained exclusively by Reuters.
Still, German investments in China in the past four years were financed by entirely by reinvested profit and companies have also withdrawn capital, painting a more nuanced picture. ($1 = 0.9343 euros) (Reporting by Sarah Marsh, editing by Kirsti Knolle)