Deutsche Version

Investment: Underpinning the Relationship

The size and growth in U.S.-German investment are the most significant factors leading to an integrated economic relationship. Using German reunification as a starting point, U.S. FDI in Germany has quadrupled while German investment in the United States is roughly seven times what it was when the Berlin Wall fell.

Assets held by U.S. affiliates in Germany now total more than $400 billion. U.S. assets in Germany are greater than total U.S. assets in all of South America. Assets held by German companies in the U.S. exceed $600 billion. Only the United Kingdom and Japan have invested more in the United States.

Three hundred U.S. companies have invested in the eastern Länder, making the United States the top investor there. In 2006, net FDI flows from the United States to Germany totaled $8.28 billion, approximately one-fifth of new FDI Germany received that year.

The United States is by far Germany’s number one investment target. In fact, German investment in the American southeast alone is greater than all of European investment in China.

Investment in manufacturing outpaces investment in other sectors both in Germany and the United States, but finance, banking and insurance represent a significantly growing share.

Capital Markets: Growing Rapidly

There has been a similar and perhaps even more dramatic growth in capital markets. The U.S.-based investors’ share of German equities grew rapidly from just over 2% in 2001 to almost 18% by the end of 2006. During the first nine months of 2007, U.S. investors bought nearly $9 billion — a figure greater than their net cumulative purchases of all German equities over the past decade. U.S. investors are now close to holding stakes in Germany's largest corporations equal to that of German domestic institutional investors. Similarly, the German stock exchange lists more than 3,300 tradable U.S. stocks. German investors held $100 billion in U.S. equities and $266 billion in overall U.S. securities as of June 2007. These trends make it imperative that the United States and Germany work closely together in coordinating proposals to address the recent upheaval in financial markets.

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