FRANKFURT, Nov 15 Reuters Germany39;s heavy economic exposure to China carries significant risks for Europe39;s top economy, the country39;s secondlargest fund manager said, singling out the market for electric vehicles as a specific example for how that is likely to pan out.

Union Investment, which has 432 billion euros 462 billion in assets under management, looked at nearly 2,000 listed companies globally in a study seen by Reuters, concluding that German companies were particularly vulnerable.

No other country, not even China39;s direct neighbours such as Japan and South Korea, has so many large companies with high exposure to China, the study said, adding this was true for nearly a quarter of all German companies in the focus group.

China has been Germany39;s single biggest trade partner since 2016, with bilateral trade of nearly 300 billion euros even surpassing that of the United States. That poses a dilemma for the German government, which is actively trying to get companies to derisk from China, the world39;s secondlargest economy.

The fund manager said it was striking that German companies are also increasingly relocating research and development activities to China, while others did the opposite for security reasons.

This strategy is risky on several levels Germany suffers as a business location as areas with significant value creation are being moved abroad while the supplier industry is losing orders.

Union Investment holds stakes in virtually all…