According to Singapore’s primary Chinese language newspaper Lianhe Zaobao, the latest survey by the German Chamber of Commerce in China found that the number of German companies withdrawing or considering abandoning the Chinese market has doubled in the past four years. The survey’s findings, which come as China’s economy continues to weaken, highlight the challenges facing German companies operating in China. Top concerns cited by German companies include increased competition from local Chinese companies, unfair restrictions on market access, economic headwinds, and geopolitical risks.
The survey was conducted from September 5 to October 6 of 2023, with a total of 566 member companies polled. About two percent of German companies in China said they were selling the Chinese arms of their business, and seven percent said they were considering doing so. In contrast, the same survey conducted in 2020 showed that only four percent of German companies operating in China had exited or were considering an exit from China.
According to the survey, 44 percent of responding German companies have taken specific measures to address the risks of operating in China, including establishment of alternative supply chains that are independent of China. Another 54 percent of responding companies believe that the attractiveness of investment in China is declining.
Source: Lianhe Zaobao, January 25, 2024