German companies in China are pessimistic about the future. More than half of the companies expect “unchanged or worse” industry development this year. This is shown by data from the German Chamber of Commerce.
Confidence in an upturn looks different: According to a recent survey by the German Chamber of Commerce in China (AHK), more than half of German companies in China rate their own business prospects as the same or worse than recently.
China is still an important market and growth driver for many companies, says Hubertus Troska, Chairman of the Chamber of Commerce. Nevertheless: “The economic recovery has not progressed as quickly as had been expected. The companies cite the growth conditions in the market as reasons on the one hand and the geopolitical tensions on the other hand, which make doing business more difficult,” says Troska.
In other words, the Chinese economy’s growth of 4.5 percent in the first quarter tended to overtake German companies in China. On the one hand, because it did not necessarily take place in areas in which German companies are strongly represented. On the other hand, because there are currently many unanswered questions for the companies.
“China has had such strong development for many industries,” said Troska. “Every entrepreneur asks himself: Will this continue, will we have gradual growth or is the market even shrinking?” Questions are also: How easy or difficult is it to do business? Will the regulatory framework become easier or more difficult? How many regulations, national or international, are there that influence business life?
Companies want to invest significantly less
Some have already found answers for themselves. More and more German companies in China believe that they will make significantly less profit this year – almost a third of the 288 companies surveyed. And they also want to invest significantly less than before the corona pandemic.
To change that, despite all the difficulties in German-Chinese relations, a delegation from the German Chamber of Industry and Commerce is in China these days. Among other things, she spoke to representatives of the Chinese Ministry of Economic Affairs and Foreign Affairs. The main concern: regaining trust after three years of the Corona visitation ban.
DIHK President Peter Adrian says: “The Federal Chancellor has clearly signaled that China plays a decisive role as a political and economic area for Germany – and that it should remain so.”
government consultations in Berlin
In less than two weeks, the German-Chinese government consultations will take place in Berlin. Even if diplomatic circles say that the event should be less massive than in the past: the German economy is hoping for a lot from it. Not for the first time, topics such as legal certainty and clear rules for German companies in China will be discussed there.
And then there is the China strategy that the federal government is working on. It became known in advance that companies should disclose more about their China business, that the traffic light coalition wants to adopt stricter investment rules and reduce state protection.
Adrian believes that past economic success will help to influence the political future: “The well-known companies that have been involved here in China for many years are clearly signaling that they want to continue and expand this commitment. I am confident that this fact will also flow into the German government’s China strategy after a necessary discussion process,” said Adrian.
After their talks in the capital Beijing, the DIHK delegation will also visit the economic centers of Shenzhen and Hong Kong.