‘New era ’ for Ger­man in­vest­ment in China

Com­ple­men­tary in­dus­trial base can help boost na­tion’s struc­tural re­form

China Daily (Canada) - - BUSINESS - By LI JIABAO andMUCHEN

China’s eco­nomic re­struc­tur­ing will usher in a new era of Ger­man di­rect in­vest­ment fea­tur­ing au­to­ma­tion, dig­i­tal­iza­tion, en­vi­ron­men­tal tech­nol­ogy and re­new­able en­ergy, a se­nior of­fi­cial of theGerman Cham­ber of Com­merce in China said on Thurs­day.

Ger­man businesses op­er­at­ing in China are per­form­ing ro­bustly and re­main rel­a­tively op­ti­mistic de­spite the eco­nomic slow­down, ac­cord­ing to the Busi­ness Con­fi­dence Sur­vey 2014 con­ducted by the cham­ber be­tweenMay 12 and June 6.

The sur­vey drew re­sponses from 417 com­pa­nies, or 17.4 per­cent of the cham­ber’s mem­bers.

“Its im­por­tance as a global mar­ket has, de­spite slower eco­nomic growth in China, con­tin­ued to in­crease for both turnover and profit ... This in­di­cates that the Chi­nese mar­ket re­mains a key growth driver for Ger­man com­pa­nies,” Lothar Her­rmann, chair­man of the north­ern di­vi­sion of the cham­ber, said dur­ing the re­lease of the sur­vey.

The im­por­tance of the Chi­nese mar­ket has con­tin­ued to in­crease, with more than three-fourths of the re­spon­dents iden­ti­fy­ing do­mes­tic de­mand in China as the most im­por­tant mar­ket for their lo­cal op­er­a­tions.

Ger­man com­pa­nies are op­er­at­ing in China to par­tic­i­pate in eco­nomic growth and de­vel­op­ment within China, and they’re in­vest­ing in China to sat­isfy do­mes­tic de­mand, said the sur­vey.

In con­trast, the 2014 Euro­pean Busi­ness in China Busi­ness Con­fi­dence Sur­vey, re­leased onMay 29, found that 46 per­cent of 552 sur­veyed businesses be­lieve the “golden era” for multi­na­tion­als in China has ended, amid tougher busi­ness con­di­tions in a slow­ing econ­omy.

Her­rmann said that the struc­ture and knowl­edge base of Ger­man in­dus­try “fits very, very well with the re­form agenda of China for the next few years.”

Ger­man com­pa­nies in China be­lieve that eco­nomic con­di­tions re­main fairly sta­ble com­pared with 2013 and they’re “cau­tiously pos­i­tive”, the sur­vey said.

The au­to­mo­tive sec­tor in par­tic­u­lar main­tained a largely pos­i­tive out­look.

One key point in the re­port: this year, there is the jump in the por­tion of com­pa­nies ex­pect­ing to ex­ceed busi­ness tar­gets com­pared with 2013. That in­di­cates the slow­down isn’t as se­vere as an­tic­i­pated, said the sur­vey.

In late March this year, Pres­i­dent Xi Jin­ping vis­ited Ger­many, which is the na­tion’s largest trade part­ner in the Euro­pean Union. It was the first trip by a Chi­nese pres­i­dent to Ger­many in eight years.



Ger­man am­bas­sador to China, said that the suc­cess of China’s eco­nomic re­forms “de­pend, to a large ex­tent, on for­eign in­vest­ment in­China and the coun­try needs to con­tinue to cre­ate a level play­ing ground for in­vest­ment in­flows”.

Busi­ness chal­lenges re­lated to hu­man re­sources — ris­ing la­bor costs, find­ing and keep­ing qual­i­fied staff — have con­sis­tently been the big­gest chal­lenge forGer­man com­pa­nies.

“How­ever, a com­pa­ra­bly smaller share con­sid­ers them to be ma­jor busi­ness chal­lenges,” Her­rmann said. “Ger­man com­pa­nies are get­ting more ma­ture.

“For the first time, morethan 50 per­cent of the com­pa­nies have op­er­ated in­China for over a decade. They have in­vested in their people, brought new train­ing meth­ods into China.”

Slow In­ter­net speed has be­come the big­gest non-per­son­nel busi­ness chal­lenge con­fronting Ger­man com­pa­nies, ac­cord­ing to the sur­vey. Con­tact the writ­ers at li­ji­abao@chi­nadaily.com.cn and muchen@chi­nadaily.com.cn

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