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The chief executive of Deutsche Bank’s asset management arm has urged European policymakers to adopt a more pragmatic stance towards investments from China and the Gulf, as Berlin prepares to spend hundreds of billions overhauling its creaking infrastructure.
“Just as Donald Trump and his entourage travelled to Doha, Abu Dhabi and Riyadh to raise trillions for America — would German or European leaders do the same?” DWS chief executive Stefan Hoops told the Financial Times.
“There’s no need to beg, but also no reason to dismiss the idea of strategic deals in the region.”
Hoops argued that sovereign wealth funds in the Gulf and Chinese state-affiliated investors still had substantial cash to deploy.
The growing geopolitical rift between Washington and Beijing could be an opportunity to redirect some of that investment to Europe, he said.
“In the past, more of it [Chinese money] flowed to the US, but now the focus is shifting more towards Europe.”
Germany’s new chancellor Friedrich Merz has relaxed the country’s constitutional debt brake to allow €500bn of investment in roads, railways, hospitals and schools over the coming years. The measure also clears the way for unlimited borrowing for defence.
The shift in German fiscal policy, coupled with increasingly protectionist policies in the US, has sparked renewed interest from international investors in Europe. US private equity group Apollo Global Management has said it could deploy as much as $100bn in Germany over the next decade.
However, foreign infrastructure investment — particularly from non-western states — remains politically sensitive in Berlin and elsewhere in Europe. Chinese bids for strategic assets such as ports have faced increasing regulatory scrutiny, with some blocked outright or made subject to national security conditions.
Hoops called for greater clarity around what kinds of foreign investments should be encouraged against this backdrop. “We need to define which assets or sectors must remain in German, European or western hands — and in which cases we’re open to accepting capital from any source or institution.”
He pointed to the expansion of the German Autobahn as one example where funding from Chinese or Saudi investors should be welcomed.
But he drew a line at sectors such as defence or energy. “Of course you don’t want such critical infrastructure to end up, for example, in Russian hands,” he said, citing the nationalisation of parts of Germany’s gas grid following Russia’s invasion of Ukraine in 2022.
Excluding investors on geopolitical grounds came with a price, Hoops warned, as it could increase the cost of capital and undermine the viability of much-needed infrastructure projects.
Hoops said that Chinese investors, for instance, frequently met excessive scepticism.
“In many cases we assume a geopolitical reason for investment interest and underestimate that they’re simply looking to invest for the sake of returns,” he said.
