BERLIN (Reuters) – The value of German government state guarantees for investments in China rose this year, edging back after a sharp decline, figures from the German economy ministry showed.

New investment protection guarantees amounted to 105.6 million euros ($111 million) by Nov. 1, as seen by Reuters in a letter from the ministry in reply to a request from economic policy expert Christian Leye, from the leftist party Sahra Wagenknecht Alliance (BSW).

In 2023 as a whole, the figure was 71 million euros. However, the figures from previous years were much higher: in 2022, the new guarantee sum amounted to 745.9 million euros and in 2021 it was as high as 1.952 billion euros.

The reasons behind the drastic decline last year were a more restrictive policy by the German government towards China and a weak Chinese economy.

There has also been an increase in export credit guarantees. According to the Economy Ministry, guarantees totalling 696.2 million euros had been issued for China by 1 November. In 2023 as a whole, the figure was 650 million euros.

State guarantees protect companies’ business against losses. The companies pay fees for the protection and if the state does not have to cover losses, it earns money from these guarantees.

($1 = 0.9511 euros)

(Reporting by Andreas Rinke, writing by Maria Martinez)