As Chinese investors head for Europe in search of new opportunities, Germany's wealthiest state of Hessen is being viewed as a key target.

Official figures show nearly half of the state's newly opened enterprises are Chinese, and local investment authorities expected the momentum to continue.

More than 500 Chinese companies, including Huawei and Haier, have already invested there, while it is believed that around 700 of Hessen's registered German companies now have an interest in China.

Among the largest Chinese investors, Weichai Power - China's leading industrial equipment manufacturer - is expected to break the record set by Sany, when it bought a 90 percent stake in German concrete pump manufacturer Putzmeister for 324 million euros ($421m) after spending an initial 100 million euros to set up Sany Germany Co in the German city of Cologne as its European headquarters.

Weichai Power has formed a strategic partnership worth 738 million euros with Germany's KION Group, which is based in Hessen. It is the largest Chinese direct investment in Germany to date and is expected to be completed in December.

Michael Hauger, head of corporate communications at Kion, said: "With such a high level of strategic synergy, the goal is to build a world-class industry alliance."

Weichai will invest 467 million euros to acquire a 25 percent stake in KION, and 271 million euros for a 70 percent majority stake in its hydraulics business.

Tan Xuguang, Weichai's chairman and CEO, said: "This partnership is an important step in our five-year strategy to globalize and expand our business activities into new markets and products.

"We will ensure stability of employment and the production sites, as well as continuity in the management of Linde Hydraulics, KION'S subsidiary," said Tan.

Gordon Riske, KION's CEO, called the new partnership "an important catalyst for strong future growth in Asia and China".

He added in both the industrial trucks and hydraulics businesses, there will be "significant benefit from Weichai Power's expertise in the fields of engine and drive technology".

The Weichai-KION deal typifies the findings of a recent survey by management consulting giant Ernst and Young, which highlighted Germany as the most attractive investment destination in Europe, according to the poll of 400 executives of large and medium-sized Chinese companies.

The survey suggested one in four Chinese managers view Germany as one of the three most appealing locations for investment worldwide.

The other two were China, with 61 percent, and the US, at 29 percent.

Within Europe, Germany was the most popular location among 63 percent of respondents, ahead of France at 13 percent.

Among the Chinese companies planning to invest in Germany, Europe's strongest economy, 9 percent said they were eyeing acquisitions, and 56 percent joint ventures.

Of the favored sectors, 57 percent said they were interested in mechanical engineering, with the automobile industry taking second place.

In March, the Berlin-based foreign trade and investment promotion agency Germany Trade and Invest reported that China became the biggest foreign investor in Germany in 2011, with 158 green field investment projects, ahead of the US with 110 and Switzerland with 91.

Excluding M&As, there were 80 Chinese environmental FDI deals in 2011, according to figures issued by the German Federal Statistical Office, compared to just seven in 2007.

Data from Bureau van Dijk, the electronic publishing research group, reveal that in 2011 around 800 Chinese companies in Germany had hired nearly 7,700 employees, 500 of which were in Hessen.

With its European headquarters in Hessen, telecom maker Huawei Technologies is China's biggest employer in Europe, with a 6,000-strong payroll across the continent, and 70 percent of these being local hires.

It has had a presence in Germany for more than a decade, in 20 locations, according to Olaf Reus, Huawei's director of public affairs and government relations in Germany.

Key to attracting Chinese companies has been Germany's favorable conditions for inward investment and infrastructure.

Germany is famous for its sophisticated logistics network and has about 100 airports, as well as well-developed rail, river and sea freight industries.

Registering a company is easy and cheap - it costs just 1 euro to open a micro company, while registration capital needed for a joint venture is 25,000 euros.

Liu Jia contributed to this story.

Contact the writer at fujing@chinadaily.com.cn