Chinese automakers and government officials have shown strong interest in buying German factories that are about to close, especially Volkswagen production sites.
The move could further strengthen China's influence in Germany's luxury car industry, which is struggling with declining sales and a shift to electric vehicles.
If a Chinese company acquires a Volkswagen plant, it would allow it to manufacture cars in Germany for the European market, avoiding tariffs on imports from China.
This could create more intense competition for European car brands.
Private companies, state-owned enterprises or joint ventures are likely to take part in the deal, and the Chinese government is likely to monitor and regulate any major investments to ensure they are in line with its strategic goals.
Volkswagen has been working to cut costs and wants to sell its Osnabrueck plant, which will cease production in 2027.
However, Germany's powerful labor unions are likely to oppose foreign takeovers.
Some workers have said they would be open to working for a Volkswagen-China joint venture if the plant operates under the VW brand and standards.
Meanwhile, Chinese car manufacturers are actively seeking European production sites to expand their influence.
