China Invests in Germany Amid Uncertainty BRUSSELS - As Prime Minister Wen Jiabao of China tours Europe this week, it is no accident that Germany occupies a special place on his itinerary. After all, Germany is the one European Union country that has a trade surplus with China. And it has also been a focus of Chinese investment in Europe - so much so that analysts say some Germans are growing wary as Chinese businesses have been snapping up German engineering companies. Mr. Wen, making his sixth visit in eight years, and the German chancellor, Angela Merkel, on Sunday opened the annual trade fair in Hanover, billed as the world's leading showcase for industrial technology. They plan to witness the signing of an economic agreement at the Volkswagen headquarters, in Wolfsburg, on Monday. According to German media reports, the deal will include the opening of a new car plant in the far western Chinese region of Xinjiang. Mr. Wen's agenda, as with a follow-up trip planned by his likely successor, Vice Prime Minister Li Keqiang, seems aimed at presenting an aura of business as usual, even as trade tensions flare with the West and the Communist Party at home is embroiled in its biggest scandal in years, involving the deposed Politburo member Bo Xilai. "We shouldn't be complacent about the stability of China's leadership," said Kerry Brown, head of the Asia program at the Royal Institute of International Affairs in London. To do business and expand access to markets, "you need more predictability in the system," he said in an interview. There's too much uncertainty at the moment. One thing that does seem certain is that neither Mr. Wen nor Mr. Li will be bringing open checkbooks to help shore up Europe's shakiest economies. While China has offered moral support and promised to help in global efforts to back the euro zone, Mr. Wen has not made specific promises to invest in a European bailout fund or in bonds from the hardest-hit countries. Instead, the Chinese seem to be going for German bonds, or bunds, helping to drive Berlin's borrowing costs to record lows, despite the mounting cost of rescuing its euro zone partners. "It can be summarized as helping Germany to help the euro zone," Jonathan Holslag, a researcher at the Brussels Institute of Contemporary China Studies, said in a telephone interview from Washington, where he testified Thursday before the U.S.-China Economic and Security Review Commission. China's leaders, Mr. Brown said, "don't understand the logic of putting hard-earned Chinese money into supporting the social welfare system of Europe." But Chinese investment in European business is growing. And while much of the effort remains focused on setting up trading companies, Chinese companies have started to shop for industrial technology and brands that can help them become more competitive, at home and globally. In 2010, the most recent year for which data is available, Chinese direct investment in the 27 European Union countries totaled 900 million euros, or about $1.2 billion at the current exchange rate. That was only a fraction of the 28.5 billion euros ($38 billion) of American direct investment in Europe. But it was three times China's level of only a year earlier - while the United States figure was shrinking. "China is catching up quickly, especially during the current financial crisis," Zhang Haiyan, director of the Euro-China Center at the Antwerp Management School, wrote in the "Euro-China Investment Report 2011-2012." The Chinese investment has been concentrated in a handful of countries: Luxembourg, mainly because of its reputation as an international financial hub, followed by Russia, Germany, Sweden and Britain. Sweden, where the Zhejiang Geely Holding Group bought Volvo from the Ford Motor Company in 2010 for $1.8 billion, is on Mr. Wen's itinerary this week. Mr. Li will be stopping in Russia. There, as in other parts of Eastern Europe, "Chinese companies know how to fill the empty place in the market that used to be filled by the government," especially in consumer goods, Mr. Zhang said in an interview. But China seems particularly intent on Germany. Chinese companies were the No. 1 investor in Germany last year, with 158 projects, or almost 20 percent of the total, according to Germany Trade and Invest, the government's economic development agency. It was the first time China had surpassed the United States by that measure.