1、MERICS CHINA MONITOROctober 27,2022THE BUMPY ROAD AHEAD IN CHINA FOR GERMANYS CARMAKERSGregor Sebastian|2MERICS CHINA MONITOR|October 27,2022KEY FINDINGS Germanys carmakers and policymakers share an interest in the long-term success of the German automotive industry.However,they are no longer aligne

2、d on how best to achieve this goal and to calibrate exposure and entanglement with China.German carmakers are deepening their integration into Chinas innovation system.By establishing partnerships with Chinese tech companies and increasing investment into research and development(R&D),they are tryin

3、g to retain their market shares in Chinas emerging electric vehicle(EV)market.For some technologies,German carmakers are moving away from a“in China,for China”R&D strategy to what could become an“in China,for the world”one.They are increasing their product development and research activities in Chin

4、a not just for the local market but for the global one,too.Their new China investments could help German carmakers remain globally com-petitive and even outpace their rivals.However,the political and geopolitical circum-stances of the last 30 years with regard to China have changed,and their deeper

5、integra-tion now takes place in a radically different environment.The new China investments of German carmakers could disrupt their strategic alignment with their countrys policymakers.While the investments could help them retain their global competitiveness,these might also benefit Chinas economy m

6、ore than Germanys.German carmakers are in a bind between holding back on further investments in China and potentially losing global competitiveness.A greater entanglement in Bei-jings goals can potentially alienate key stakeholders including in government and civil society as well as investors.Under