German Business in China

German Business
in China
Business Confidence Survey
2015
Press Conference
German Business in China
Business Confidence Survey 2015
China has emerged as one of Germany’s most important international partner
economies. At present, China is Germany’s largest trading partner outside of the EU,
and an important investment destination. The diversity and strong growth of China’s
economy has continued to attract internationally operating German companies, and
is a market where presence is vital for continuous business success. German
manufacturing prowess in traditional German strongholds in automotive, machinery
and chemical have been major drivers for investment in China. At present the
Chinese economy is transitioning from an extensive period of rapid growth to an era
of more moderate growth. The transition will bring new challenges but also
opportunities within which German companies are well positioned to remain
successful. So far German companies have mostly maintained their optimism, and
the Chinese market continues to be a major contributor to their growth.
China
Key Developments
German-Chinese Economic Relations
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Bilateral trade reached a record high of EUR154 billion in 2014.
German exports to China have been growing particularly strong.
An estimated 5,200 German companies are operating in China as of 2015.
Foreign direct investment into China continues to be strong.
Total invested capital stock accumulated to around EUR48 billion.
German companies employ an estimated 1.1 million staff in China.
Business Confidence Survey
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After being resilient during the onset of the economic slowdown in 2014,
German companies are beginning to be affected by slower growth.
Compared to the previous year, when German business performed
extraordinarily well, the overall business sentiment has been revised
downward.
Overall, companies are expecting business to expand with growth easing to
slower levels rather than stalling.
The majority of companies remain positive about China’s future investment
potential and remain committed to the Chinese market despite slower
future growth.
Economic reforms are still welcomed, but enthusiasm for them has fallen.
German companies are already engaging in modern manufacturing and in
R&D making them less reliant on low-end manufacturing and exports.
A shortage of skilled workers is a major constraint for companies.
Other key concerns pertain to the limitations of the internet and China’s
regulatory framework.
Content
page
Sino-German Trade Relations
German Investment in China
Economic Environment for German Companies
Business Confidence Survey Results 2015
Facts and figures of Sino-German Relations
Overview of Key Economic Figures
2
3
5
7
20
22
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German Business in China
Business Confidence Survey 2015
Sino-German Trade
Relations
in trade between the two countries. On average
Germany’s exports to China increased by 8.8%, while
China’s exports to Germany only grew by 0.8% between
2010 and 2014.
Trade relations between China and Germany have
steadily progressed in tandem over the past 35 years. By
2014 bilateral trade between them made up 7.5% of
Germany’s foreign trade, making China Germany’s third
most important trading partner. China is Germany’s most
important market outside of the EU, while Germany is
China’s most important market within the EU, which is
China’s largest trading partner. China’s rise as a global
manufacturing giant and an increasingly important export
market has subsequently had ramifications on German
trade relations in Asia, which accounted for 17.6% of
German trade volume in 2014. A main catalyst for the
rapid growth in trade with Asian countries has been
bilateral trade with China, which has expanded 24-fold
since 1990, while trade with Asia as a whole expanded
five-fold over the same period. Whereas in 1990 China
contributed to only 10% of trade with Asia, it now
accounts for 48%, which is similar to its contribution in
2010.
Development of German-Chinese trade in bn EUR
Chinese share of total German trade with Asia
100%
80%
60%
40%
20%
0%
10%
1990
47%
48%
2010
2014
21%
2000
China
Other Asia
154
160
131
140
120
100
80
60
28
40
20
6
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
0
Trade
German exports
German imports
Source: Statistisches Bundesamt
German exports are dominated by automobiles (27.8%)
and machinery (23.8%), which together account for more
than half of Germany’s total exports to China. Electrical
products (13.9%), optical equipment (6.9%), and airplanes
(4.2%) round out the top five product categories which
constitute more than 75% of total export volume.
Electrical products (26.5%) and machinery (22.8%)
dominate Chinese products imported to Germany. Though
similar in product category the predominant imports from
China are consumer goods such as personal computers or
mobile phones, whereas German products in similar
categories tend to have industrial applications. Different
textile categories together account for 10%, with
furniture (4.1%) and shoes (2.7%) completing the top five
product groups which altogether account for 63.3% of
China’s exports to Germany.
Top 5 product categories traded 2014
German exports
Since 1990 trade volume has steadily increased by an
average of 14.2% annually, doubling nearly every five
years. Following a boost in trade volume in 2010, growth
has decelerated, but is now starting from a much higher
base. Despite China’s economic slowdown as well as
Germany’s low GDP growth, trade volume hit another
record, reaching EUR 154bn in 2014. Notably, German
exports to China have been outperforming imports from
China, reducing the current account deficit. While
Chinese exports to Germany have been prone to greater
fluctuations since 2010, German exports managed to
steadily increase and were the main catalyst for growth
German imports
Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis Note: Asia
excluding Arab nations.
Electronics
Machinery/mechanical goods
Clothing
Furniture
Shoes
Other
Vehicles
Machinery/mechanical goods
Electronics
Optics
Aircraft
Other
26.5%
22.8%
10.0%
4.1%
2.7%
33.9%
27.8%
23.8%
13.9%
6.9%
4.2%
23.4%
0%
5%
10% 15% 20% 25% 30% 35%
Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis.
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German Business in China
Business Confidence Survey 2015
German companies in China
German Investment in
China
5,000
Over the past few decades the importance of the Chinese
economy for German companies has translated into a
steady flow of investment. By 2014 the capital stock
invested by Germany in China had grown to around EUR48
billion. Germany has consistently been among China’s top
ten foreign investors, with FDI flows nearly doubling from
its value in 2010 to USD2.1 billion by 2013, a level that
was maintained in 2014. Investment in recent years was
particular boosted by capital intensive investments in the
automotive sector. German FDI outperformed overall FDI,
increasing by 20.5% on average compared to 6.1%
between 2010 and 2014. The figures confirm that China
has been able to retain its top position as an investment
destination for German companies despite changing
market conditions.
Annual German FDI to China in bn USD
2.1
2.1
2
1.5
1.2
1.1
1
5,200
5,000
4,800
4,350
4,000
3,000
2,600
2,486
2,454
2,224
2,000
1,000
0
2012
2013
GCC Members
2014
2015*
total German companies
Source: German Chamber of Commerce in China analysis / *forecast
The vast majority of investment continues to be
concentrated in China’s three main economic centers.
Nearly 90% of companies are located within the economic
centers around Shanghai (Yangzte River Delta), Beijing
(Bohai Economic Rim) or Guangzhou/Shenzhen (Pearl
River Delta). Smaller clusters of investments are located
in the northeastern provinces of Liaoning and Jilin,
around the cities of Shenyang and Changchun, as well as
in Sichuan (Chengdu) and Chongqing in the West. In the
other provinces German presence remains limited.
Companies currently favor the traditional economic
clusters and better developed coastal areas, while only
slowly making inroads into the country’s still developing
interior.
Distribution of German companies by region
0
2010
2011
2012
2013
2014
Source: Mofcom
In total, we estimate that there are around 5,200 German
companies operating in China in 2015, with a steady
increase in the number of German businesses present in
the country. As one of China’s biggest foreign investors,
German investment accounts for 1.1mn jobs in China.
With a focus on high-tech industries and modern
manufacturing requiring greater skill-sets of its
employees, German investment is well prepared to
support China as its economy moves up the value chain,
and low skill, low wage industries become less important.
The majority of German companies are engaged in
technology intensive industries with a strong focus on the
Chinese market, rather than using China as a cheap
production base for exports.
West Other
Northeast 1.8% 5.2%
3.7%
Periphery YRD,
Bohai, PRD
6.4%
Pearl River Delta
(PRD)
12.9%
Yangtze River
Delta (YRD)
51.7%
Bohai
Economic Rim
18.3%
Source: German Chamber of Commerce in China analysis
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German Business in China
Business Confidence Survey 2015
German companies in China 2015
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German Business in China
Business Confidence Survey 2015
Economic Environment for
German Companies 2015
German companies have been well positioned to benefit
from China’s rapid economic growth and over the years
have deepened their business footprint in China.
Developments in China strongly affect the overall business
performance of internationally operating German
companies, as China is one of their key markets. As the
country shifts from a period of rapid growth to a period of
moderate growth, the business environment is also
undergoing changes. The slowdown is, however, not
unprecedented, and GDP growth of around 7% annually in
the world’s second largest economy still provides ample
room for business expansion. The current structural
adjustment accompanying slower economic growth will
affect various industrial sectors differently.
After having recorded some of the fastest growth rates in
2014, the industrial output of automobiles saw growth
dropping sharply in 2015. Reflecting an overall drop in
fixed-asset investment growth and a cooling business
sentiment, special-purpose and general machinery have
seen the sharpest fall in growth in 2015. Electric
machinery and equipment has performed slightly better
than the average. The data suggests that the business
environment in 2015 has become significantly more
challenging. However, despite the slowdown, it should be
stressed that most sectors are still achieving positive
growth.
Following a very positive year for Sino-German trade, the
overall trade volume in the first four months continued to
expand, despite the comparatively high base levels
following record trade in 2014. Imports from China
rebounded significantly in the between January and April
(+19.3%), reversing last years’ trend of German export
growth outperforming imports for the majority of the year.
German exports meanwhile grew 4.2% during the same
period. Trade between Germany and China maintained its
resilience and has continued to develop contrary to a sharp
overall slowdown of Chinese foreign trade with other
global trading partners.
National industrial data for most of the 41 industrial
sectors monitored by the National Bureau of Statistics have
been affected by changing business conditions in 2014, and
have experienced a further deceleration of growth in the
first months of the current year. Whereas key industries
for German businesses remained comparably resilient in
2014, the overall conditions have been increasingly Monthly development of Sino-German trade growth in %
affected by slower economic growth. While industrial yoy / trade volume in bn EUR
sectors vital to German businesses mostly outperformed
50%
the national average in 2014, industrial production in 17
15
45%
these sectors dropped below the average in the first five 14
40%
12
35%
months of 2015.
11
Industrial production in China for key German
industrial sectors yoy growth rate
14%
General machinery
12%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
2014
10%
Special-purpose
machinery
Trade volume (in EUR)
Motor vehicles
German imports (in %)
8%
6%
4%
2014
Source: NBS
Apr
2015
May
Mar
Dec
Jan/Feb
Oct
Nov
Sep
Jul
Average
Aug
0%
Jun
Electric machinery
and equipment
May
2%
-2%
9
8
6
5
3
2
0
-2
30%
25%
20%
15%
10%
5%
0%
-5%
2015
German exports (in %)
Source: Statistisches Bundesamt
German foreign direct investment remained bullish in the
first quarter, totaling USD710 million, which was an
increase of 21% compared to the same period in 2014. As
the largest European investor in China, German
investment continued to expand as other major investors,
including companies from the US and Japan, invested less.
German investment in 2015 was particularly driven by
continuous investment in the automotive sector. At
5|Page
German Business in China
Business Confidence Survey 2015
present, German investment activity to China has not been with pollution. At present, German industry 4.0 is at the
affected by slower economic growth.
center of the drive toward continuous modernization of
manufacturing.
Monthly development of German FDI to China in million
USD
Education has played an equally important role in
Germany’s development. In addition to universities with a
450
410
strong focus on research and development, vocational
400
training is another cornerstone of its education system.
350
300
Some professions at vocational schools are the source of
280
300 260
240
highly technically skilled employees. Universities and
250
210
180
vocational schools focus on different but complementary
170
200
160
160
140
120
skill-sets, and are vital in providing companies with the
150
100
100
skilled employees they require.
50
50
2014
Apr
Mar
Jan/Feb
Dec
Nov
Oct
Sep
Aug
Jul
Jun
Mai
Apr
Mar
Jan/Feb
0
2015
Source: NBS
Germany as a Partner for
China’s Transformation
China is currently undergoing significant structural
changes as its economy adjusts to slower economic growth
and an emphasis on quality over quantity. Services and
consumption are beginning to comprise a larger share of
GDP, while as a share of GDP manufacturing has already
reached its limit. The importance of manufacturing for
China, however, will continue to remain of great
significance. Whereas most Western countries saw the
importance of manufacturing to their economies falling
over the years, industrial manufacturing has remained a
fundamental cornerstone of the German economy. In 2014
the secondary sector, excluding construction, accounted
for around 26% of GDP in Germany, while in China the
share presently is 37%.
One key to the success of German industrial strength has
been a focus on high-tech manufacturing driven by
innovation. In order to achieve this, Germany has also
undergone continuous transformations to maintain its
manufacturing prowess. One result of this process has
been that polluting heavy industries are now a thing of the
past. Traditional manufacturing has increasingly been
replaced by sophisticated manufacturing facilities with
higher levels of productivity and are no longer synonymous
Using China as a source for cheap labor is not and has not
been the major motivation of German companies
operating in China. Consequently massive labor intensive
factories have not been a hallmark of German investment
in China. Instead, German companies operating here are
in need of highly qualified employees to operate high-tech
manufacturing as well as to provide sophisticated service.
With a focus on advanced industrial sectors German
companies provide excellent employment opportunities
for Chinese employees.
German industry will find a more advanced Chinese
economy much more compatible with its operations in the
future. In many cases German companies operating in
China are already pioneers in industrial upgrading and in
many aspects German companies are well positioned to be
a partner to China during its transformation. This
partnership can go beyond manufacturing, too. Improving
the environment is a key issue in China, and Germany is a
leader in the use of green technology and reducing its
reliance on fossil fuels. In dealing with the consequences
of an aging society, German companies are also leaders in
health care services and equipment. These are strategic
areas with high growth potential. As the Chinese economy
shifts to more moderate economic growth, it is being
confronted with new challenges, ranging from structural
adjustments to changes in society. There is, however,
ample room for opportunity to further strengthen and
deepen Sino-German cooperation.
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German Business in China
Business Confidence Survey 2015
survey results also show that companies tend to
Business Confidence Survey The
envision the prospects of their own industries relatively
more positively, with the share of companies expecting
Results 2015
improving conditions up by a margin of 11.4 percentage
points compared to how they view the outlook for the
economy as a whole. Despite most companies viewing
The section below reflects the main findings of the developments in their own industry more positively, more
German Chamber of Commerce in China’s survey among its than a quarter of the companies have a more pessimistic
member companies regarding their general business stance, and expect conditions in their industry to worsen
in 2015. Identifying how different industrial sectors
sentiment in China.
evaluate the prospects for their own industry highlights a
great degree of variation.
Business Outlook
The largest group of responding companies (39.2%)
anticipates that the growth of the Chinese economy will
not change while 33.8% think it will further cool in 2015.
This is the first time in two years that the general outlook
does not anticipate an upturn of the economy, reflecting
an adjustment of the companies’ perception following a
more optimistic outlook in 2013 and 2014. Companies’
expectations for the economy have reached levels similar
to those of 2012 when GDP growth dropped from 9.3% in
2011 to 7.8% in 2012 and China’s economic growth
departed from its period of high growth. While in 2013 and
2014 there was still hope for a return of higher growth
rates, companies are now adjusting to the new economic
realities in China, anticipating more moderate economic
growth in the future. The responses reflect a challenging
first six months which has seen a persistent cooling of key
economic indicators.
The automotive industry remains the most optimistic
sector, with 54.4% expecting conditions to improve.
Though still overwhelmingly optimistic, this percentage
has dropped considerably from the previous year, while
the share of respondents expecting worsening conditions
has increased to 22.8%. Companies engaging in services
(consulting/legal) have the lowest percentage of
companies anticipating conditions to worsen (13.5%) and
the highest percentage of respondents expecting
conditions to stay as they are (50.0%). Companies in the
chemical, consumer goods, and machinery sectors are
about equally split between expecting that conditions in
their industries will improve, stay unchanged, or worsen.
The mixed outlook in the machinery sector was already
noticeable in last year’s survey. Optimism for 2015 in the
machinery sector has deteriorated further from 2014, as
the sector is feeling the pinch of companies holding back
on investing in new machinery due to weak business
confidence in China in the manufacturing sector.
Evaluation of economy and industry in 2015
Evaluation of economy 2012-2015
Q10a How do you evaluate the Chinese economy in 2015? 2012-2014 from Q10 How do you evaluate the Chinese economy and general outlook for
your industry in 2015?
previous surveys.
45%
40%
48.9%
47.7%
50%
42.6%
25%
39.2%
33.6%
33.8%
30.2%
27.2%
27.0%
20%
39.2%
34.1%
35%
38.3%
35%
30%
38.4%
40%
14.0%
27.5%
27.0%
25%
20%
15%
17.5%
15%
30%
33.8%
10%
10%
5%
5%
0%
0%
2012
2013
improving
2014
unchanged
2015
worsening
improving
neutral
economy
worsening
industry
7|Page
German Business in China
Business Confidence Survey 2015
With 50.6% of companies expecting to either exceed or Share of companies expecting increases for key
achieve their business targets, the overall sentiment of business indicators 2012 to 2015
German companies remains positive. This is down by 10.5 Q12 Please indicate your expectations for 2015 to 2014 for your company in the
following areas (turnover/profit/investment/employment). 2012-2014 from
percentage points, reflecting an adjustment from 2014 previous surveys.
when German companies remained largely unaffected by
73.6%
80%
69.7%
a slowing market environment. For 2015 more companies
70%
64.8%
expect to mostly achieve (rather than exceed) their
64.5%
60.8%
59.8%
60%
58.0%
54.2%
business targets (+6 percentage points), while the share of
51.2%
52.6%
50.2%
companies expecting to only partly achieve or not achieve 50% 48.4%
45.3%
47.6%
45.3%
40%
38.7%
their targets has risen by 4.7 percentage points.
30%
Expectations on reaching business targets
20%
Q11 To what extent were you able to achieve your business targets in 2014, and
what are your expectations for 2015?
10%
38.8% 37.8%
40%
0%
2012
35%
turnover
30%
25%
profits
2014
investment
2015
employment
25.5%
22.3%
19.5%
17.6%
14.2%
20%
15%
2013
12.8%
10%
Expectations on key business indicators 2015
5.1%6.4%
5%
Q12 Please indicate your expectations for 2015 to 2014 for your company in the
following areas (turnover, profit, investment, employment).
100%
0%
exceed
achieve
mostly
achieve
partly achieve not achieve
90%
80%
70%
2014
2015
60%
14.7%
17.5%
15.5%
16.6%
45.9%
38.1%
20.8%
31.4%
50%
40%
The downward adjustment is also reflected when looking 30%
64.5%
51.2%
45.3%
at growth expectations for turnover, profits, investment
20%
38.7%
and employment, all of which have shifted to lower growth 10%
0%
expectations compared to 2014. However, after the strong
turnover
profit
investment
employment
performance in 2014, the adjustment is moderate and
increase
similar
decrease
does not reflect a sharp decline. As for profits and turnover
the majority of respondents anticipate increases. The
majority (45.9%) plans to keep investment stable, while A closer look at the development of turnover in various
the majority (45.3%) still plan to increase employment. industrial sectors between 2012 and 2015 underpins the
The changing market conditions contribute to more fact that the majority of German companies are still
hesitation towards expanding investment and employment, achieving growth, and that the adjustment reflects an
with the share of companies planning increases falling easing to lower levels of growth rather than a dramatic
slightly. This is a natural adjustment in which companies correction. Clearly German companies are being affected
are acclimatizing their growth strategies to accommodate by slower growth levels across the Chinese economy, but
lower growth expectations in the future, a tendency which for the most part they are relatively resilient and
was already observable last year. Compared to 2014 the weathering the adjustment well.
share of companies expecting decreases has gone up for
the four indicators monitored, reaching levels similar to
those of 2012.
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German Business in China
Business Confidence Survey 2015
Share of companies expecting increasing turnover by
industry 2012 to 2015
Q12a Please indicate your expectations for 2015 to 2014 for your company in the
following areas (turnover). 2012-2014 from previous studies.
90%
83.3%
85.5%
84.4%
79.2%
80%
70%
69.4%
60%
59.3%
63.2%
65.9%
60.2%
50%
77.6%
77.3%
57.8%
40%
30%
20%
10%
0%
2012
2013
2014
automotive
machinery
2015
services
Q14 How important are the following reasons for your company’s presence in China?
61.2%
Presence in Asian market
For the majority of globally active German companies the
Chinese market is either a top market or among the top
three. China’s importance has steadily increased in the
years following the global financial crisis, leaving China as
the only major market achieving significant growth.
Compared to 2014, China’s market importance in terms of
its contribution to global turnover and profits has fallen
for the first time after years of increases. In part this has
to do with stronger growth in the US as well as improving
conditions in the EU. The Chinese market continues to be
a vital market for globally active German companies, and
next to the US it has established itself as a second crucial
market outside of the EU for German companies, which
provides them with a broader base to balance their
international operations and makes them less susceptible
to regional fluctuations.
Market importance of China
Q13 What status does your company’s local business have within your mother
company’s global turnover and profits?
36.6%
35%
Motives for market presence
Sales potential
Market Conditions
40%
The main reason that German companies give for
operating in China is the sales potential of the market
(92.7%). This is followed first by having a presence in the
Asian market (86.1%), then by companies following their
key accounts (70.6%), and fourth by the ability to adapt
products to the Chinese market (63.9%). Lower production
costs have continuously remained at the lower end of the
motives for German companies. This perception reflects
the focus of German companies in China and is important
to understand how German companies will be affected by
the ongoing restructuring of the economy. The rankings of
these motivations have remained stable since monitoring
began in 2007.
30.3%
29.7%
31.7%
Following key accounts
30.7%
25.5%
38.4%
17.0%
13.8%
33.3%
26.7%
14.5%
31.8%
28.9%
Lower production costs
14.0%
0%
very important
important
26.2%
24.7%
27.5%
30.1%
40%
neutral
60%
10.5%
19.1%
29.4%
24.8%
20%
18.8% 10.6%
30.1%
Proximity to suppliers
29.1%
11.3% 2.6%
25.5%
33.8%
Lower sourcing/procurement costs
R&D 11.6%
5.0% 2.4%
40.1%
39.9%
Ability to adapt products to local market
Cooperation with local companies
31.5%
46.1%
33.5%
80%
100%
not important
This is also reflected when considering where the main
markets are: for 75.3% of companies the Chinese market is
the most important, while only 24.7% regard export
destinations as their most important market. German
companies operate in China to serve the Chinese market.
The relevance of exports has continuously fallen from
36.5% in 2012 when it was first measured. As of 2015,
however, this percentage has stabilized at levels
comparable to those reported in 2014, indicating that the
adjustments which occurred over the past few years have
come to a halt.
30%
25%
20%
15%
12.0%
8.7%
11.8% 11.5%
10%
13.2% 14.5%
5%
0%
top 1 market among top 3
markets
low priority
turnover
one among not applicable
many
profits
9|Page
German Business in China
Business Confidence Survey 2015
Main markets
Main regions in China
Q15 Please indicate the most important market in terms of revenue generation for Q16 Which regions are the most important for your business? (multiple answers
your company’s local operation.
possible)
80%
75.3%
Yangtze Delta
81.7%
70%
Bohai Rim
53.8%
60%
Pearl River Delta
45.9%
50%
Southwest
20.7%
40%
Central
15.5%
North
14.8%
30%
16.8%
20%
7.9%
10%
Other South
7.2%
West
6.6%
0%
China
EU
Other exports
Of the companies stating that China is their most
important market, the main economic centers are by far
the most important regions for their business. The Yangtze
Delta (81.7%) dominates in importance, followed by the
Bohai region (53.8%) and the Pearl River Delta (45.9%).
Southwestern China, mainly focused around Chengdu and
Chongqing, is the most important region outside of China’s
traditional economic centers, emphasizing the potential of
the region.
0%
20%
40%
60%
80%
100%
Note on regions: Yangtze Delta (Shanghai, Zhejiang, Jiangsu), Bohai Rim (Beijing,
Tianjin, Shandong, Hebei, Liaoning), Pearl River Delta (Guangdong), North
(Heilongjiang, Jilin), Central (Shanxi, Anhui, Jiangxi, Henan, Hunan), Other South
(Fujian, Hainan), Southwest (Sichuan, Chongqing, Guizhou, Yunnan, Guangxi), West
(Inner Mongolia, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang).
According to the vast majority (73.6%) of German
companies, competition from Chinese companies
continues to increase. Only a small minority (4.8%) does
not face Chinese competitors in the market. The second
strongest competition is from other European companies,
though a considerably smaller share (30.4%) expects
European competition to increase. Competition from the
US and from other Asian economies is less intense, with
fewer respondents expecting the competition to intensify.
The data, however, also suggests that China is a highly
competitive market.
Central (15.5%) and northern region (14.8%) follow at some
distance, while other southern provinces (7.2%), Fujian
and Hainan, as well as remote western regions (6.6%) are
important only to a small minority of companies. The data
strongly suggests the continuous relevance of China’s
traditional clusters in the coastal areas which are by far
the most developed and have the most economic clout. Origin of competition
Despite higher growth rates, regions in China’s interior are Q28 Please evaluate the origin of the competition faced by your local operation.
only slowly gaining in prominence. However, this also 100% 4.8%
10.6%
2.7%
90%
shows the growth potential of China’s economy as the
27.6% 29.2% 23.0% 31.4%
7.0%
18.9%
35.3% 42.1%
80%
regional economic distribution becomes more balanced.
6.1%
70%
60%
50%
40%
30%
20%
10%
0%
6.6%
4.4%
3.8%
52.0%
49.5%
73.6%
50.8%
55.5%
54.1%
5.7%
49.5%
1.6%
48.4%
30.4%
China
Europe
increasing
16.3%
15.6%
15.3%
10.7%
9.5%
7.9%
Japan
Korea
US
Taiwan
Hong
Kong
Other
unchanged
decreasing
not a competitor
10 | P a g e
German Business in China
Business Confidence Survey 2015
German companies have a comparative advantage in goods Supply chain
higher up the value chain. The vast majority believes that Q34 Does your local supply chain source goods from outside of China?
they will be able to maintain their technological 100%
no, do not
leadership ahead of Chinese competitors in their fields
source
90%
17.16%
despite increasing competition. 47.2% find it very unlikely
80%
no, China only
or unlikely that Chinese competitors will evolve to become
15.38%
70%
innovation leaders within the next five years. Nonetheless
60%
German companies are also recognizing the increasing
50%
abilities of Chinese companies: 29.8% think that Chinese
40%
yes
companies becoming innovation leaders is likely in the
67.46%
30%
near future. The technological gap has been closing fast,
20%
and Chinese companies have been gaining ground in the
10%
lower and mid-market level in particular, with many eager
0%
to further advance their capabilities. Depending on the
industry and market segment, German companies will
need to adjust their strategies in order to maintain their Evaluation of importance of international supply chain
Q35 Please evaluate the importance of other regions for the supply chain of your
competitive edge.
local operation, compared to your Chinese supply chain.
Innovation leadership by Chinese competitors
Q29 Do you think Chinese competitors can become innovation leaders in your
industry within the next 5 years?
very likely
4.4%
very unlikely
11.2%
Germany
Other EU
Malaysia
Thailand
Indonesia
Philippines
likely
25.4%
Vietnam
Other ASEAN
unlikely
36.0%
0%
10%
20%
30%
40%
50%
60%
70%
strongly increasing
increasing
unchanged
decreasing
strongly decreasing
not used
80%
90%
100%
neutral
23.0%
The majority of companies (67.5%) source goods from
outside of China, mostly from Germany (96.4%) and other
EU countries (85.3%). 15.4% of respondents only source
from within China, while ASEAN countries are of
significantly lesser importance. The data also does not
indicate that this is likely to change much in the coming
years meaning that the supply chain German companies
use to operate their business in China mainly relies on
Europe and China itself.
11 | P a g e
German Business in China
Business Confidence Survey 2015
Business challenges
Human resource related issues remain the biggest
challenge for German companies operating in China.
Finding qualified staff was reported as a problem or major
problem for 82.4% of companies, an increase of 8.3
percentage points. Finding qualified staff has replaced
increasing labor costs, which has not increased
significantly as a problem since 2014, as the biggest
challenge facing German companies. These issues were
followed by problems with retaining qualified staff, which
eased slightly amid higher uncertainty in the labor market
as the economy cools. The prominence of challenges
related to finding and retaining qualified staff is an
indication of the shortage of skilled professionals and
workers in China, which can be identified as a key obstacle
in transforming the Chinese economy. Perceived currency
risks are named as a challenge by 59.1%. Challenges
pertaining to administrative hurdles (57.2%), domestic
protectionism (42.8%), legal insecurity (48.1%) and
protection of intellectual property (48.1%) underline the
fact that the regulatory environment in China still remains
a major challenge for German companies. Internet speed
(56.6%) and internet censorship (51.6%), which was added
this year, have established themselves as another area of
concern. The anti-corruption campaign seems to have
made an impact: corruption has dropped out of the top 10
business challenges for the first time since the German
Chamber began conducting its business confidence survey.
On the upside, with few exceptions, a lower share of
companies are reporting any of the 23 items monitored
business challenges as being a major problem or problem.
Whereas in 2013 all items in the top 10 had values greater
than 50%, in 2015 it was only 7. This reflects a trend
suggesting that German companies are increasing their
ability in dealing with business challenges in China as well
as improvements in the market environment.
Top 10 business challenges
Q17 Please evaluate your current business challenges. Note: a question internet
censorship was added in 2015.
82.4%
Finding qualified staff
75.8%
Increasing labour costs
62.2%
Retaining qualified staff
59.1%
Currency risks
Bureaucracy/administrative hurdles
57.2%
Slow internet speed
56.6%
51.6%
Internet censorship
Domestic protectionism
48.2%
Legal insecurity
48.1%
Protection of intellectual property
48.1%
0%
2015
20%
40%
60%
80%
100%
2014
Reforms
Generally, the announced reforms continue to be largely
welcomed by German companies for their very positive or
positive impact. However, the initial enthusiasm recorded
in 2014 has been scaled back due to a lack of noticeable
progress. The continued anti-corruption drive (60.3%) was
identified as having had a noticeable positive impact, but
it was also the only item which was evaluated more
positively compared to last year. The most welcomed area
of reform continues to be plans to boost domestic
consumption (61.0%) which also relates to increased
urbanization (49.7%). A sharp drop has been recorded in
the impact of improved environmental protection,
decreasing by 19 percentage points. Areas pertaining to
the financial regulations where reforms have been making
the biggest advances are of less relevance to German
companies.
Evaluation of reform items
Q18 Please evaluate the impact of the central government’s economic policies on
your company.
Expanding domestic consumption
61.0%
Anti-corruption drive
60.3%
52.1%
Improved rule of law
49.7%
Increased urbanization
49.4%
Increased role of markets
46.7%
Improved environmental protection
40.8%
Reduction of red-tape
37.6%
RMB exchange rate liberalization
31.4%
Interest rate liberalization
24.1%
Reducing industrial over capacities
0%
2015
10% 20% 30% 40% 50% 60% 70%
2014
12 | P a g e
German Business in China
Business Confidence Survey 2015
Investment climate
Business friendliness
Q19 How friendly do you consider local authorities towards your business operation?
Despite lower enthusiasm, the reform agenda is widely 50%
42.9%
41.7%
seen as contributing to a more positive investment climate 45%
40%
(50.3%), just behind growth of companies’ respective
industries (57.8%) and economic growth (57.6%). This 35%
means that, as China leaves its period of high growth, 30%
companies are adjusting their expectations accordingly 25%
and still view the evolving economic conditions with 20%
15%
moderate growth as largely positive. Items pertaining to
8.5%
10%
5.8%
internet and modern IT infrastructure, however, are
5%
1.2%
largely regarded as having a negative impact. Another area
0%
of concern is foreign companies being targeted by
very friendly
friendly
neutral
unfriendly
very
unfriendly
regulators and tax authorities. The most negative impact
however is attributed to air quality, which 58.8% of
responding companies identify as harming the investment. Companies generally evaluate the future attractiveness of
their current location positively for all fields of business.
Effect on investment climate
Sales (73.4%) and services (65.0%) are evaluated the most
Q21 Please evaluate how the following have affected the investment climate.
positively. When considering the future attractiveness for
production and R&D, a simple look at the aggregated data
Growth of your main industry
27.4% 15.0%
57.6%
may leave a distorted impression, as it discounts the
Economic growth
21.2%
25.2%
53.6%
relative attractiveness found in first-tier and lower tier
Economic reforms
5.3%
44.4%
50.3%
cities. More than 50% of companies located in first-tier
Access to cloud computing 14.5%
44.1%
41.4%
Regulators targeting foreign companies 9.7%
cities consider their location very attractive or attractive
49.3%
41.1%
Air quality 8.7%
58.8%
32.5%
for R&D in the future, as their locations attract the talent
Taxation issues targeting foreign companies 8.5%
48.0%
43.6%
required. The view of companies in lower-tier cities on the
Internet speed 8.1%
58.3%
33.6%
attractiveness for conducting R&D is more mixed.
Internet restrictions 4.3%
56.5%
39.1%
Compared to companies in first-tier cities slightly fewer
0%
20%
40%
60%
80%
100%
hold a positive view (45.9%), while nearly a quarter hold a
negative view compared to 15.8% in first-tier cities. In
positive
neutral / no impact
negative
contrast, 69.6% of companies in second-tier cities find
their location attractive for manufacturing in the future
Despite shortcoming in the regulatory framework German while only 36.2% of companies in first-tier cities say the
businesses report that the local governments they deal same for their location.
with create a general business friendly environment. The
vast majority (51.4%) of responding companies consider Future attractiveness of current location
local authorities to be generally business friendly. Only Q20 Please rate how attractive your current location will be in the future to your
company for the following business fields.
7.0% consider local authorities as being unfriendly towards
their business. This perception has remained largely
Sales/Marketing
33.9%
39.5%
16.5% 8.0% 2.1%
unchanged over the past two years.
Services
Sourcing/Procurement
25.4%
39.6%
16.0%
Trading
21.1%
Production related engineering 12.4%
33.7%
34.5%
36.9%
R&D
17.6%
31.5%
Production
16.8%
31.8%
0%
25.7% 7.9% 1.5%
40.3%
20%
40%
very attractive
attractive
not very attractive
not attractive at all
8.3% 1.7%
35.6%
7.0% 1.8%
36.9%
32.6%
27.3%
60%
10.6% 3.2%
11.1% 7.2%
18.5%
80%
5.6%
100%
neutral
13 | P a g e
German Business in China
Business Confidence Survey 2015
The share of companies planning to invest in new locations Type of investment considered
in China has remained stable at around 30%. A nearly equal Q25 What types of investment are you considering? (multiple answers possible)
share of companies are considering new investments 60%
55.7%
(29.1%), gaining slightly over 2014. The highest percentage
(40.5%) stated that they do not have any intention to 50%
42.3%
invest in new locations within China, but this figure has
40%
33.5%
fallen from 45.7% in 2014. The figures are consistent with
other findings of this year’s study, indicating that 30%
hesitation to further expand investment in China has
19.1%
20%
increased amid the shift to more moderate growth.
Investment intentions in new locations in China
Q22 Is your local business operation planning any new investments at new locations
in China within the next 2 years?
10%
0%
50%
47.5%
45.7%
35.3%
30.4%
Production
Sales/Marketing
R&D
40.5%
40%
30.5%
30%
29.1%
20%
Services
23.9%
17.2%
10%
0%
2013
2014
yes
2015
no
maybe
As in previous years, the main economic centers in the
Yangtze Delta, Bohai Rim and Pearl River Delta continue
to be the favorite investment destinations of German
companies, together accounting for 73.8% of the
investment destinations named. Western China is again
featured, with Chengdu (7.6%) and Chongqing (4.7%) in the
top ten, while Wuhan (3.7%) is the third city outside of the
main economic centers. Compared to the previous years
there has been little change in the cities listed in the top
10, with the exception that Shenyang has dropped out for
the first time since 2013.
The most common motivation for investing in new
locations is following key customers (60.3%), while Top 10 investment locations
regional diversification (34.0%) and cost reduction (33.0%) Q23 If you are planning any new investments within the next 2 years, please specify
are considered major motivational factors for considerably the top 3 cities you consider to be the most likely locations.
fewer responding companies. Investing in new
manufacturing facilities (55.7%) remains the most common
type of new investment. Of the companies considering new
investment in production facilities, 65% of companies are
from the automotive, machinery, and chemical sectors,
underscoring the commitment of German companies to
modern manufacturing in China.
Motivation for new investment
Q24 What are your major motivations for the new investment? (multiple answers
possible)
Following key customers
60.3%
Regional diversification
34.0%
Cost reduction
33.0%
Investment incentives
12.9%
Better qualified staff
11.9%
Following key suppliers
6.7%
Other
10.3%
0%
10%
20%
30%
40%
50%
60%
70%
The overwhelming majority (68.8%) or respondents have
no intention to shift investments to ASEAN countries. Only
a minority of 10% plan to shift investment within the next
two years, while 21.2% are considering doing so. These
figures, however, should be seen in context. German
14 | P a g e
German Business in China
Business Confidence Survey 2015
investment in recent years has seen a heavy concentration
into China while investment flows to other emerging
markets of rapidly growing ASEAN countries are still at a
very low base. The data does not imply that investments
will be relocated outside of China, but that companies are
looking for investment strategies within ASEAN as part of
their Asia strategy. The main reasons for shifting
investments are following key customers (51.0%) and
regional diversification (48.1%). It is also natural that
companies are on the lookout for newer cheaper
investment locations to achieve cost reductions (45.2%).
Intentions of shifting investments to ASEAN countries
Q26 Is your company planning to shift investments to ASEAN countries in the next 2
years?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
yes
10.0%
maybe
21.2%
no
68.8%
Research and Development
Considering responses from all companies, 40.8% already
engage in or plan to engage in some form of R&D in China
in the next 24 months. When only considering companies
which actually engage in R&D elsewhere, the share
increases to over 50%. While it needs to be recognized that
the scope and depth of R&D will vary greatly, it is
worthwhile to note that a substantial share of German
companies in China already operate in R&D or are
considering to do so. Looking at the industrial sectors of
companies with global R&D, consumer goods (68.2%),
automotive (64.9%), machinery (59.1%) and chemical
(56.5%) have the highest share of companies engaging or
considering engaging in R&D in China. This reflects that it
is especially the technology and knowledge-driven sectors
which are already active in research. It is, however, also
noteworthy that 99% of the R&D interested companies
note that finding qualified staff is their top business
challenge. This issue again highlights the obstacles
companies face if they wish to engage in a knowledge
driven economy in China.
Share of companies with R&D or intentions
Q30 Do you already conduct R&D in China or do you plan to establish R&D activities
in China in the next 24 months?
100%
90%
Intentions of shifting investments to ASEAN countries
80%
Q27 If you are considering to shift investment, what is your major motivation for
investments in ASEAN countries? (multiple answers possible)
70%
no
50.4%
60%
Following key customers
51.0%
50%
40%
Regional diversification
48.1%
Cost reduction
maybe
8.8%
30%
20%
45.2%
yes
40.8%
10%
Investment incentives
22.1%
Better qualified staff
0%
20.2%
Following key suppliers
9.6%
0%
10%
20%
30%
40%
50%
60%
15 | P a g e
German Business in China
Business Confidence Survey 2015
Motivation for R&D activities
Reasons for not engaging in R&D activities
Q32 Does your company engage in R&D at other global locations?
Q33 Please evaluate your decisions not to engage in R&D in China. (multiple answers
possible)
100%
focus on German R&D
90%
80%
yes
47.1%
70%
72.2%
intellectual property concerns
70.0%
lack of local technical expertise
60%
63.8%
50%
40%
30%
no
52.9%
20%
no need for local R&D
56.3%
HQ restrictions
55.1%
unfavorable research environment
10%
0%
47.5%
0%
20%
40%
60%
80%
100%
The main motivation for companies to engage in R&D is the
need for local adjustments as well as the competitive
environment in China. On the other hand, next to a focus
on R&D in Germany, companies that do not plan to engage
in R&D in the near future are most concerned about the
protection of intellectual property (70.0%) and the lack of
local expertise (63.8%).
Motivation for R&D activities
Q31 What best describes your motivation for R&D activities in China? (multiple
answers possible)
need for local adaptation
89.8%
need for local innovation
76.5%
competitive environment
74.1%
cost reductions
64.3%
legal requirements
37.8%
0%
20%
40%
60%
80%
100%
16 | P a g e
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Business Confidence Survey 2015
Profile of responding companies
The regional distribution of responding companies has
remained relatively stable over the history of the survey.
Over 2/3 of companies are located in the first-tier cities
Shanghai, Beijing, Shenzhen or Guangzhou. The majority
of the remaining companies are clustered around the key
economic hubs in the Yangtze Delta, the Bohai Economic
Rim and the Pearl River Delta. Taken together over 90% of
responses come from companies located in China’s main
economic centers. A small pocket has been established
around Shenyang in the north east while the number of
respondents from other areas in China accounts only for a
minor sample.
Regional distribution
Q1 In which city is your company located?
Other South
7.1%
Shenzhen/Guangzhou
10.4%
Shanghai
41.9%
Other North
10.6%
Greater China presence
Q2 Where in Greater China does your company have additional branches?
50%
49.1%
45%
40%
35%
27.2%
30%
22.1%
25%
20%
16.6%
15%
10%
3.2%
5%
0%
China
Hong Kong
Taiwan
Macau
None
Shanghai (36.4%) and Beijing (12.4%) are the most popular
destinations for companies’ Greater China or Asia
headquarters, accounting for nearly 50%. Outside of
mainland China, Hong Kong (11.1%) and Singapore (4.8%)
are ahead of other first-tier cities in the south of mainland
China. SMEs with a less diverse presence in China mainly
maintain their regional headquarters in secondary cities.
Greater China or Asia headquarter
Q3 Where is your company’s Greater China or Asia headquarter located?
Beijing
14.6%
40%
36.4%
35%
Other East
15.4%
30%
25%
20%
16.2%
14.6%
Nearly half of respondents maintain multiple operations 15%
12.4%
11.1%
throughout mainland China. The diversification within 10%
4.8%
China is mostly concentrated in the established economic
2.3%
2.3%
5%
centers, while companies are only slowly progressing to 0%
central and western regions. Over a quarter of companies
maintain offices in Hong Kong, while 16.6% have an
additional presence in Taiwan. Only a small fraction of
companies have an additional presence in Macau. The
share of companies with only one operation throughout the
Wholly foreign owned enterprises (WFOE) are the most
Greater China region has, however, fallen from 26% in 2013
common legal form for German companies following a
to 22% in 2015.
relaxation of the regulatory framework in China. The share
of companies registered as WFOEs (69.9%) has increased
progressively since 2007, when only 52.0% were registered
as such and a higher share of companies were registered
as representative offices (27.1%). After the shift in recent
years the distribution of types of legal forms has remained
relatively steady since 2013.
17 | P a g e
German Business in China
Business Confidence Survey 2015
Legal form
Turnover
Q4 Please describe the legal status of your company.
Q6 Please indicate your local operation’s annual turnover for 2014 in RMB.
100%
>999 million
15.2%
Other, 4.3%
Rep Office, 6.3%
Holding, 7.1%
Joint Venture,
12.4%
90%
80%
70%
501-999
million
7.6%
60%
50%
5-50 million
25.3%
251-500
million
10.9%
40%
WOFE, 69.9%
30%
<5 million
15.7%
20%
10%
51-250 million
25.5%
0%
Reflecting a strong presence of the German “Mittelstand”,
66.6% of companies’ local operation have under 250
employees. 21.5% have between 251 and 999 employees,
while 13.9% have more than 1,000 employees. The
distribution underlines the fact that German companies in
China have less emphasis on labor intensive industrial
sectors which rely on low wages. Similarly, the turnover of
individual operations in China reflects the small to medium
sized nature of German companies, with about 2/3 of
companies achieving a turnover of under RMB250 million.
Number of employees
Q5 Please indicate the number of employees at your company’s local operation.
1000-2999
5.8%
>2999
8.1%
<50
36.6%
The top five industries account for 67.5% of the responding
companies. A more diverse industrial distribution, with
each individual industry accounting for less than 5% of the
total, makes up the remainder. Reflecting Germany’s
industrial strength in engineering, machinery and
industrial equipment (25.8%) dominate, while automotive
(14.9%) and consulting/legal services (13.4%), which
include technical consulting and certification services,
follow at some distance. Consumer goods and chemicals
each account for over 5% of responding companies, closely
followed by electronics and plastic and metal products
with just over 4%. The industrial distribution has seen only
minor changes in recent years, with changes in the sample
only affecting the ranking of the industries following the
top three, which have been unchanged since the German
Chamber first began conducting its business confidence
survey in 2007.
Industrial composition
251-999
21.5%
Q7 Please specify the main industry of your company.
50-250
28.0%
Machinery/Industrial Equipment
Automotive
Consulting/Legal Services
Consumer Goods
Chemicals
Electronics
Plastic/Metal Products
Construction
Finance/Insurance
Tourism
Environmental Products/Services
Medical Supplies
Logistics
IT/Telecommunications
Aerospace
Pharmaceuticals
Other
25.8%
14.9%
13.4%
7.1%
6.3%
4.3%
4.0%
4.0%
3.5%
2.5%
2.5%
2.3%
1.8%
1.8%
1.3%
0.8%
3.8%
0%
5%
10%
15%
20%
25%
30%
18 | P a g e
German Business in China
Business Confidence Survey 2015
The largest percentage of companies, 49.2%, maintains Years in China
production facilities. This has slightly increased over the Q9 For how many years has your company been physically present in China?
< 2 years
years despite continuous worries of China losing its
5.1%
2-3 years
competitive edge in manufacturing. Services (48.5%) and
9.1%
sales (41.7%) are the other main fields of business in which
>15 years
the responding German companies are active. Other areas
4-6 years
33.7%
8.9%
of business are of significantly less importance. However,
16.2% of companies state that R&D is already part of their
main field of business.
7-10 years
17.2%
Main field of business
Q8 Please indicate your local entity’s main field of business (multiple answers
possible).
10-15 years
26.1%
60%
50%
49.2%
48.5%
About the survey
41.7%
40%
30%
Since 2007, the German Chamber of Commerce in China’s
annual business confidence survey has been a key gauge
for measuring the business sentiment of German
0%
companies operating in China. As of 2015 the German
Chamber of Commerce in China has over 2,600 member
companies, representing about 50% of German companies
operating in China. This year’s survey was conducted
between May 11th and June 12th, 2015. In total the survey
comprises 38 questions, focusing on business outlook and
performance, market conditions and investment climate.
China is maturing as an investment destination for German The survey was conducted online among our member
companies, with most companies (59.8%) having already companies. After controlling the dataset for quality, valid
been operating in the country for over 10 years. This responses from 439 member companies were collected.
reflects the tremendous importance of China’s market for
German companies, with the majority of companies In order to be representative of the total of 5,200 German
moving into the market as its economy increasingly opened companies in China at a 95% confidence level with a
up to foreign investment. However, the 14.2% of tolerated margin of error of 5%, a minimum required
companies which have operated at their location for less sample of 358 respondents was required. The sample also
than 3 years reflects that there is a steady influx of new satisfies the distribution of region, company size, and
investments throughout China. Overall, the majority of industry resulting in a representative and statistically
German companies have gained significant experience in significant sample for the analysis of the German
the market and have been able to position themselves companies in China.
accordingly.
20%
17.4%
16.2%
15.9%
15.7%
10%
19 | P a g e
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Business Confidence Survey 2015
Facts and Figures of Sino-German
Relations
Share of German foreign trade by region 2014
Asia (ex. China)
10.1%
Africa
2.1%
Oceania
0.6%
France
The Netherlands
China
USA
UK
Italy
Austria
Poland
Switzerland
Belgium
Czech Republic
China
7.5%
Americas (ex. USA)
3.2%
EU
58.2%
USA
7.1%
Top 10 German trading partners 2014 in bn EUR
Europe (ex. EU)
11.3%
68
102
88
79
49
73
75
96
84
0
20
42
48
36
40
39
40
54
56
48
46
42
34
37
40
60
80
German exports
100
120
140
160
180
German imports
Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis
Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis
Top 10 Asian trading partner 2014 in bn EUR
Chinese trade relations by state 2014 in bn EUR
China
17
South Korea
16
India
North Rhine-Westphalia
10.5
Bavaria
16.4
Baden-Württemberg
14.1
Hamburg
4.2
6.7
Hesse 2.8
7.4
Lower Saxony
3.7
5.6
Saxony
6.4
0.9
Rhineland-Palatinate 1.9 2.0
Schleswig-Holstein 1.0 2.4
Bremen 0.7 1.4
Saxony-Anhalt 0.6 1.4
Thuringia 0.8 0.9
Berlin 0.6 0.8
Saarland 0.6 0.4
Brandenburg 0.2 0.6
Mecklenburg-Vorpommern 0.3 0.3
79
75
Japan
19
8
9 7
Taiwan
7 7
Singapore
6 5
Malaysia
5 6
Thailand 4 5
Vietnam 2 6
Hong Kong
62
0
20
40
60
80
German exports
100
120
140
160
German imports
0
5
23.1
12.1
9.4
10
Exports to China
15
20
25
30
35
Imports from China
Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis
Source: Statistisches Bundesamt
Top goods exported to China 2014 in bn EUR
Top goods imported from China 2014 in bn EUR
Vehicles and engines
13.1
Vehicle components
Measuring instruments
Specialized machinery
General machinery
2.6
Shoes
2.2
2.3
Houshold appliances
2.0
2.3
Electric motors and generators
1.9
Electronic components
1.8
2.7
Tool making machinery
3.5
Consumer electronics
3.3
Electricity controll equipment
11.7
7.4
Outer garments
3.6
Aircraft
Computers
Telecommunication equipment
8.2
1.7
Electric motors and generators
1.6
Lamps
1.8
Electronic components
1.5
Clothing
1.6
0
Source: Statistisches Bundesamt
2
4
6
8
10
12
14
0
2
4
6
8
10
12
14
Source: Statistisches Bundesamt
20 | P a g e
German Business in China
Business Confidence Survey 2015
Facts and Figures of Sino-German Relations
Number of new investment projects in
Germany by country of origin 2014
Average expected wage increases at German
companies in China
300
12%
10.2%
250
200
10%
114
168
8%
190
58
32
38
75
77
69
130
50
8.8%
8.1%
44
150
100
8.9%
21
16
53
0
6%
4%
2%
Greenfield
0%
M&A
2012
2013
2014
2015
Source: Germany Trade and Invest
Source: German Chamber of Commerce in China
Top Asian destinations by German airline
passengers in mn passengers
Number of Chinese residents in Germany and
Germans in China 2014
1.5
1.47
120,000
110,284
135.9
per 100,000
1.0
0.82
0.79
100,000
0.76
0.68
80,000
0.5
0.28
0.15
0.13
60,000
0.0
40,000
21,700
20,000
2013
Source: Statistisches Bundesamt
2014
1.6
per 100,000
0
Chinese in Germany
Germans in China
Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis
21 | P a g e
German Business in China
Business Confidence Survey 2015
Overview of Key Economic Figures
GDP Growth and Composition
2010
2011
2012
2013
2014
Q1 2015
in %
10.4
9.3
7.7
7.7
7.4
-
Q1
in %
11.9
9.7
8.1
7.7
7.4
7.0
Q2
in %
10.3
9.5
7.6
7.5
7.5
-
Q3
in %
9.6
9.1
7.4
7.8
7.3
-
Q4
in %
9.8
8.9
7.9
7.7
7.3
-
40.1
47.2
52.0
56.9
63.6
14.1
29,992
35,000
38,354
41,838
-
-
GDP growth
GDP
in trillion RMB
GDP per capita
in RMB
Primary sector
share in %
10.1
10.2
10.1
10.0
9.2
5.5
Secondary sector
share in %
46.7
46.8
45.3
43.6
42.6
42.9
Tertiary sector
share in %
43.2
43.0
44.6
46.0
48.2
51.6
Industrial production
growth in %
15.7
13.9
10.0
9.7
8.3
6.4
Retail
growth in %
18.4
17.1
14.3
13.1
12.0
10.6
Fixed-asset investment
growth in %
23.8
24.0
20.6
19.6
15.7
13.5
Foreign direct investment
growth in %
17.4
9.7
-3.7
5.3
1.7
11.3
Production and Retail
Investment
Price Levels
CPI (consumer)
in %
3.3
5.4
2.6
2.6
2.0
1.2
PPI (producers)
in %
5.5
6.0
-1.7
-1.9
-1.9
-4.6
Foreign Trade
Imports
growth in %
38.7
24.9
4.3
7.3
0.4
-17.6
Exports
growth in %
31.3
20.3
7.9
7.9
6.1
4.7
Trade volume
growth in %
39.6
10.1
0.5
-2.6
8.8
-
German exports to China
growth in %
44.2
19.8
2.9
0.2
11.3
5.3
German imports from China
growth in %
36.3
2.8
-1.3
-5.1
6.4
21.8
German FDI
in billion USD
1.2
1.1
1.5
2.1
2.1
0.6
Sino-German Trade Relations
Source: NBS, Statistisches Bundesamt.
22 | P a g e
The German Chamber of Commerce in China
The Delegation of German Industry & Commerce
(AHK) Greater China
The German Chamber of Commerce in China supports German
companies in their activ ities in China. Div ided into the
regional centers of Beijing, Shanghai and South & SouthWest China, it assists all together more than 2,600 companies.
It is thereby one of the largest foreign chambers in China.
The Chamber offers a broad range of seminars, workshops
and events to German companies, in addition to access to an
enormous network end assistance with matters in relation to
the local and regional government offices.
The Delegation of German Industry & Commerce Greater China
is the key representative body for German economic interests in
China, working on behalf of the German Federal Government.
With offices in Beijing, Shanghai, Guangzhou, Hong-Kong
and Taipei, the AHK represents German corporate interests in
Greater China and supports the expansion of German-Chinese
economic relations. The AHK is part of a network of more than
130 German economic representations worldwide, which has
been active abroad for more than 150 years. The first office in
the Greater China region was opened in 1981 in Taipei.
German Business in China
Business Confidence Survey
2015
German Chamber of Commerce
in China • North China
German Chamber of Commerce
in China • Shanghai
German Chamber of Commerce
in China • South & Southwest China
Landmark Tower 2, Unit 0818
8 North Dongsanhuan Road,
Chaoyang District, Bejing 100004
Tel. +86 10 6539 6688
[email protected]
25 F, China Fortune Tower
1568 Century Avenue
Pudong District, Shanghai 200122
Tel. +86 21 5081 2266
[email protected]
Room 1903, Leatop Plaza
32 Zhu Jiang East Road
Tianhe District, Guangzhou 510620
Tel. +86 20 8755 2353
[email protected]
Contact Person
Mr. Max J. Zenglein
Economic Analyst China
Survey Design and Analysis
German Chamber of Commerce
in China • North China
Tel. +86 10 6539 6665
[email protected]
www.china.ahk.de

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