German companies show strong confidence in China’s market with an objective of boosting investments.
A significant majority of German companies plan to continue their operations in China, with many also aiming to increase their investments in the next two years, according to a recent survey by the German Chamber of Commerce in China.
The Business Confidence Survey for 2024/25, conducted from September 3 to October 8, gathered data from 546 member companies, offering a clear picture of the German business community’s outlook in China.
The results of the survey revealed that 92 percent of German companies intend to keep operating in China, with only 0.4 percent contemplating an exit despite market challenges.
Half of the respondents (51 percent) plan to increase their investment over the next two years, with 87 percent of those citing competitiveness as the main reason. These companies are adopting a strategy of being in China both for the domestic market and the global market.
Clas Neumann, chairperson of the German Chamber of Commerce in East China, emphasized the significance of localization, pointing out that German businesses are adapting to market challenges while positioning themselves to take advantage of the available opportunities.
The survey also found that Chinese firms are increasingly recognized as innovation leaders. While just 8 percent of respondents consider Chinese companies to be innovation leaders now, 55 percent expect them to become leaders within the next five years.
Regarding business opportunities in China, German businesses highlighted the internationalization of Chinese firms and the development of the green economy as the most important areas.
Over 5,000 German businesses have established a presence in China, and the Chinese market is of considerable importance to them, according to Maximilian Butek, chief representative of the Delegation of German Industry and Commerce Shanghai.
A report by the German Economic Institute revealed that German companies’ direct investment in China reached a record high of 11.9 billion euros (about 12.49 billion U.S. dollars) in 2023, marking a 4.3 percent year-on-year increase. This investment accounted for more than 10 percent of Germany’s total foreign investment that year, the highest since 2014.
Oliver Oehms, executive director of the German Chamber of Commerce in China (North China), expressed optimism about the Chinese market. He noted that despite currently low consumer confidence, the situation can change rapidly, and it is essential to remain confident.
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