german business in china 2015 - ahk greater...

Business Confidence Survey

German Business

in ChinaPress Conference

2015

German Business in China Business Confidence Survey 2015

1 | P a g e

Key Developments

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.

German-Chinese Economic Relations

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.


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 2 German Investment in China 3 Economic Environment for German Companies 5 Business Confidence Survey Results 2015 7 Facts and figures of Sino-German Relations 20 Overview of Key Economic Figures 22

Chin

a


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Sino-German Trade

Relations 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.

Chinese share of total German trade with Asia

Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis Note: Asia excluding Arab nations.

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

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.

Development of German-Chinese trade in bn EUR

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

Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis.

10%21%

47% 48%

0%

20%

40%

60%

80%

100%

1990 2000 2010 2014

China Other Asia

6

28

131

154

0

20

40

60

80

100

120

140

160

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

Trade German exports German imports

23.4%

4.2%

6.9%

13.9%

23.8%

27.8%

33.9%

2.7%

4.1%

10.0%

22.8%

26.5%

0% 5% 10% 15% 20% 25% 30% 35%

Other

Aircraft

Optics

Electronics

Machinery/mechanical goods

Vehicles

Other

Shoes

Furniture

Clothing

Machinery/mechanical goods

Electronics

Germ

an e

xport

sG

erm

an im

port

s


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German Investment in

China

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

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.

German companies in China

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

Source: German Chamber of Commerce in China analysis

1.21.1

1.5

2.1 2.1

0

1

2

2010 2011 2012 2013 2014

2,2242,454 2,486 2,600

4,3504,800

5,0005,200

0

1,000

2,000

3,000

4,000

5,000

2012 2013 2014 2015*

GCC Members total German companies

Yangtze River Delta (YRD)

51.7%

Bohai Economic Rim

18.3%

Pearl River Delta (PRD)12.9%

Periphery YRD, Bohai, PRD

6.4%

Northeast3.7%

West1.8%

Other5.2%


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Germ

an c

om

panie

s in C

hin

a 2

015


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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.

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

affected by slower economic growth. While industrial

sectors vital to German businesses mostly outperformed

the national average in 2014, industrial production in

these sectors dropped below the average in the first five

months of 2015.

Industrial production in China for key German

industrial sectors yoy growth rate

Source: NBS

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.

Monthly development of Sino-German trade growth in %

yoy / trade volume in bn EUR


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

-2%

0%

2%

4%

6%

8%

10%

12%

14%

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan/Feb

Mar

Apr

May

2014 2015

General machinery

Special-purposemachinery

Motor vehicles

Electric machineryand equipment

Average

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

-2

0

2

3

5

6

8

9

11

12

14

15

17

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

2014 2015

Trade volume (in EUR) German exports (in %)

German imports (in %)


6 | P a g e

present, German investment activity to China has not been

affected by slower economic growth.

Monthly development of German FDI to China in million

USD

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

with pollution. At present, German industry 4.0 is at the

center of the drive toward continuous modernization of

manufacturing.

Education has played an equally important role in

Germany’s development. In addition to universities with a

strong focus on research and development, vocational

training is another cornerstone of its education system.

Some professions at vocational schools are the source of

highly technically skilled employees. Universities and

vocational schools focus on different but complementary

skill-sets, and are vital in providing companies with the

skilled employees they require.

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.

260

180160

210

120100

240

50

170

300280

410

140160

0

50

100

150

200

250

300

350

400

450

Jan/Feb

Mar

Apr

Mai

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan/Feb

Mar

Apr

2014 2015


7 | P a g e


Results 2015

The section below reflects the main findings of the

German Chamber of Commerce in China’s survey among its

member companies regarding their general business

sentiment in China.

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.

Evaluation of economy 2012-2015 Q10a How do you evaluate the Chinese economy in 2015? 2012-2014 from

previous surveys.

The survey results also show that companies tend to

envision the prospects of their own industries relatively

more positively, with the share of companies expecting

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

developments in their own industry more positively, more

than a quarter of the companies have a more pessimistic

stance, and expect conditions in their industry to worsen

in 2015. Identifying how different industrial sectors

evaluate the prospects for their own industry highlights a

great degree of variation.

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 Q10 How do you evaluate the Chinese economy and general outlook for

your industry in 2015?

30.2%

47.7% 48.9%

27.0%

42.6% 38.3%33.6%

39.2%

27.2%

14.0%17.5%

33.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2012 2013 2014 2015

improving unchanged worsening

27.0%

39.2%

33.8%

38.4%

34.1%

27.5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

improving neutral worsening

economy industry


8 | P a g e

With 50.6% of companies expecting to either exceed or

achieve their business targets, the overall sentiment of

German companies remains positive. This is down by 10.5

percentage points, reflecting an adjustment from 2014

when German companies remained largely unaffected by

a slowing market environment. For 2015 more companies

expect to mostly achieve (rather than exceed) their

business targets (+6 percentage points), while the share of

companies expecting to only partly achieve or not achieve

their targets has risen by 4.7 percentage points.

Expectations on reaching business targets Q11 To what extent were you able to achieve your business targets in 2014, and

what are your expectations for 2015?

The downward adjustment is also reflected when looking

at growth expectations for turnover, profits, investment

and employment, all of which have shifted to lower growth

expectations compared to 2014. However, after the strong

performance in 2014, the adjustment is moderate and

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

the majority (45.3%) still plan to increase employment.

The changing market conditions contribute to more

hesitation towards expanding investment and employment,

with the share of companies planning increases falling

slightly. This is a natural adjustment in which companies

are acclimatizing their growth strategies to accommodate

lower growth expectations in the future, a tendency which

was already observable last year. Compared to 2014 the

share of companies expecting decreases has gone up for

the four indicators monitored, reaching levels similar to

those of 2012.

Share of companies expecting increases for key

business indicators 2012 to 2015 Q12 Please indicate your expectations for 2015 to 2014 for your company in the

following areas (turnover/profit/investment/employment). 2012-2014 from

previous surveys.

Expectations on key business indicators 2015 Q12 Please indicate your expectations for 2015 to 2014 for your company in the

following areas (turnover, profit, investment, employment).

A closer look at the development of turnover in various

industrial sectors between 2012 and 2015 underpins the

fact that the majority of German companies are still

achieving growth, and that the adjustment reflects an

easing to lower levels of growth rather than a dramatic

correction. Clearly German companies are being affected

by slower growth levels across the Chinese economy, but

for the most part they are relatively resilient and

weathering the adjustment well.

22.3%

38.8%

19.5%

14.2%

5.1%

12.8%

37.8%

25.5%

17.6%

6.4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

exceed achieve mostlyachieve

partly achieve not achieve

2014 2015

64.8%

69.7%73.6%

64.5%

52.6%54.2%

59.8%

51.2%

48.4%47.6% 45.3% 38.7%

58.0%60.8%

50.2%

45.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2012 2013 2014 2015

turnover profits investment employment

64.5%51.2%

38.7%45.3%

20.8%

31.4%45.9% 38.1%

14.7% 17.5% 15.5% 16.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

turnover profit investment employment

increase similar decrease


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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.

Market Conditions

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?

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.

Motives for market presence Q14 How important are the following reasons for your company’s presence in China?

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.

69.4%

85.5%

77.3% 77.6%

59.3%60.2%

65.9% 57.8%

84.4%

63.2%

83.3%79.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2012 2013 2014 2015

automotive machinery services

11.8%

36.6%

8.7%

29.7%

13.2%11.5%

30.3%

12.0%

31.7%

14.5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

top 1 market among top 3markets

low priority one amongmany

not applicable

turnover profits

11.6%

14.0%

14.5%

13.8%

17.0%

25.5%

39.9%

46.1%

61.2%

24.8%

29.1%

31.8%

33.3%

33.8%

38.4%

30.7%

40.1%

31.5%

30.1%

29.4%

28.9%

26.7%

30.1%

25.5%

18.8%

11.3%

5.0%

33.5%

27.5%

24.7%

26.2%

19.1%

10.5%

10.6%

2.6%

2.4%

0% 20% 40% 60% 80% 100%

R&D

Lower production costs

Proximity to suppliers

Lower sourcing/procurement costs

Cooperation with local companies

Ability to adapt products to local market

Following key accounts

Presence in Asian market

Sales potential

very important important neutral not important


10 | P a g e

Main markets Q15 Please indicate the most important market in terms of revenue generation for

your company’s local operation.

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.

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.

Despite higher growth rates, regions in China’s interior are

only slowly gaining in prominence. However, this also

shows the growth potential of China’s economy as the regional economic distribution becomes more balanced.

Main regions in China Q16 Which regions are the most important for your business? (multiple answers

possible)

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.

Origin of competition Q28 Please evaluate the origin of the competition faced by your local operation.

75.3%

16.8%

7.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

China EU Other exports

6.6%

7.2%

14.8%

15.5%

20.7%

45.9%

53.8%

81.7%

0% 20% 40% 60% 80% 100%

West

Other South

North

Central

Southwest

Pearl River Delta

Bohai Rim

Yangtze Delta

73.6%

30.4%16.3% 15.6% 15.3% 10.7% 9.5% 7.9%

18.9%

52.0%

49.5% 50.8% 55.5%54.1%

49.5% 48.4%

2.7%7.0%

6.6% 4.4%6.1%

3.8%5.7%

1.6%

4.8%10.6%

27.6% 29.2% 23.0%31.4% 35.3%

42.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

China Europe Japan Korea US Taiwan HongKong

Other

increasing unchanged decreasing not a competitor


11 | P a g e

German companies have a comparative advantage in goods

higher up the value chain. The vast majority believes that

they will be able to maintain their technological

leadership ahead of Chinese competitors in their fields

despite increasing competition. 47.2% find it very unlikely

or unlikely that Chinese competitors will evolve to become

innovation leaders within the next five years. Nonetheless

German companies are also recognizing the increasing

abilities of Chinese companies: 29.8% think that Chinese

companies becoming innovation leaders is likely in the

near future. The technological gap has been closing fast,

and Chinese companies have been gaining ground in the

lower and mid-market level in particular, with many eager

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

competitive edge.

Innovation leadership by Chinese competitors Q29 Do you think Chinese competitors can become innovation leaders in your

industry within the next 5 years?

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.

Supply chain Q34 Does your local supply chain source goods from outside of China?

Evaluation of importance of international supply chain Q35 Please evaluate the importance of other regions for the supply chain of your

local operation, compared to your Chinese supply chain.

very unlikely11.2%

unlikely36.0%

neutral23.0%

likely25.4%

very likely4.4%

yes67.46%

no, China only15.38%

no, do not source17.16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Other ASEAN

Vietnam

Philippines

Indonesia

Thailand

Malaysia

Other EU

Germany

strongly increasing increasing unchanged

decreasing strongly decreasing not used


12 | P a g e

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.

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.

48.1%

48.1%

48.2%

51.6%

56.6%

57.2%

59.1%

62.2%

75.8%

82.4%

0% 20% 40% 60% 80% 100%

Protection of intellectual property

Legal insecurity

Domestic protectionism

Internet censorship

Slow internet speed

Bureaucracy/administrative hurdles

Currency risks

Retaining qualified staff

Increasing labour costs

Finding qualified staff

2015 2014

24.1%

31.4%

37.6%

40.8%

46.7%

49.4%

49.7%

52.1%

60.3%

61.0%

0% 10% 20% 30% 40% 50% 60% 70%

Reducing industrial over capacities

Interest rate liberalization

RMB exchange rate liberalization

Reduction of red-tape

Improved environmental protection

Increased role of markets

Increased urbanization

Improved rule of law

Anti-corruption drive

Expanding domestic consumption

2015 2014


13 | P a g e

Investment climate

Despite lower enthusiasm, the reform agenda is widely

seen as contributing to a more positive investment climate

(50.3%), just behind growth of companies’ respective industries (57.8%) and economic growth (57.6%). This

means that, as China leaves its period of high growth,

companies are adjusting their expectations accordingly

and still view the evolving economic conditions with

moderate growth as largely positive. Items pertaining to

internet and modern IT infrastructure, however, are

largely regarded as having a negative impact. Another area

of concern is foreign companies being targeted by

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.

Effect on investment climate Q21 Please evaluate how the following have affected the investment climate.

Despite shortcoming in the regulatory framework German

businesses report that the local governments they deal

with create a general business friendly environment. The

vast majority (51.4%) of responding companies consider

local authorities to be generally business friendly. Only

7.0% consider local authorities as being unfriendly towards

their business. This perception has remained largely

unchanged over the past two years.

Business friendliness Q19 How friendly do you consider local authorities towards your business operation?

Companies generally evaluate the future attractiveness of

their current location positively for all fields of business.

Sales (73.4%) and services (65.0%) are evaluated the most

positively. When considering the future attractiveness for

production and R&D, a simple look at the aggregated data

may leave a distorted impression, as it discounts the

relative attractiveness found in first-tier and lower tier

cities. More than 50% of companies located in first-tier

cities consider their location very attractive or attractive

for R&D in the future, as their locations attract the talent

required. The view of companies in lower-tier cities on the

attractiveness for conducting R&D is more mixed.

Compared to companies in first-tier cities slightly fewer

hold a positive view (45.9%), while nearly a quarter hold a

negative view compared to 15.8% in first-tier cities. In

contrast, 69.6% of companies in second-tier cities find

their location attractive for manufacturing in the future

while only 36.2% of companies in first-tier cities say the

same for their location.

Future attractiveness of current location Q20 Please rate how attractive your current location will be in the future to your

company for the following business fields.

4.3%

8.1%

8.5%

8.7%

9.7%

14.5%

50.3%

53.6%

57.6%

39.1%

33.6%

43.6%

32.5%

41.1%

41.4%

44.4%

25.2%

27.4%

56.5%

58.3%

48.0%

58.8%

49.3%

44.1%

5.3%

21.2%

15.0%

0% 20% 40% 60% 80% 100%

Internet restrictions

Internet speed

Taxation issues targeting foreign companies

Air quality

Regulators targeting foreign companies

Access to cloud computing

Economic reforms

Economic growth

Growth of your main industry

positive neutral / no impact negative

8.5%

42.9% 41.7%

5.8%

1.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

very friendly friendly neutral unfriendly veryunfriendly

16.8%

17.6%

12.4%

21.1%

16.0%

25.4%

33.9%

31.8%

31.5%

36.9%

34.5%

40.3%

39.6%

39.5%

27.3%

32.6%

36.9%

35.6%

33.7%

25.7%

16.5%

18.5%

11.1%

10.6%

7.0%

8.3%

7.9%

8.0%

5.6%

7.2%

3.2%

1.8%

1.7%

1.5%

2.1%

0% 20% 40% 60% 80% 100%

Production

R&D

Production related engineering

Trading

Sourcing/Procurement

Services

Sales/Marketing

very attractive attractive neutral

not very attractive not attractive at all


14 | P a g e

The share of companies planning to invest in new locations

in China has remained stable at around 30%. A nearly equal

share of companies are considering new investments

(29.1%), gaining slightly over 2014. The highest percentage

(40.5%) stated that they do not have any intention to

invest in new locations within China, but this figure has

fallen from 45.7% in 2014. The figures are consistent with

other findings of this year’s study, indicating that

hesitation to further expand investment in China has

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?

The most common motivation for investing in new

locations is following key customers (60.3%), while

regional diversification (34.0%) and cost reduction (33.0%)

are considered major motivational factors for considerably

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)

Type of investment considered Q25 What types of investment are you considering? (multiple answers possible)

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.

Top 10 investment locations Q23 If you are planning any new investments within the next 2 years, please specify

the top 3 cities you consider to be the most likely locations.

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

47.5%

30.4%

30.5%

35.3%

45.7%

40.5%

17.2%23.9%

29.1%

0%

10%

20%

30%

40%

50%

2013 2014 2015

yes no maybe

10.3%

6.7%

11.9%

12.9%

33.0%

34.0%

60.3%

0% 10% 20% 30% 40% 50% 60% 70%

Other

Following key suppliers

Better qualified staff

Investment incentives

Cost reduction

Regional diversification

Following key customers

55.7%

42.3%

33.5%

19.1%

0%

10%

20%

30%

40%

50%

60%

Production Services Sales/Marketing R&D


15 | P a g e

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?

Intentions of shifting investments to ASEAN countries Q27 If you are considering to shift investment, what is your major motivation for

investments in ASEAN countries? (multiple answers possible)

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?

no68.8%

maybe21.2%

yes10.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

9.6%

20.2%

22.1%

45.2%

48.1%

51.0%

0% 10% 20% 30% 40% 50% 60%

Following key suppliers

Better qualified staff

Investment incentives

Cost reduction

Regional diversification

Following key customers

yes40.8%

maybe8.8%

no50.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


16 | P a g e

Motivation for R&D activities Q32 Does your company engage in R&D at other global locations?

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)

Reasons for not engaging in R&D activities Q33 Please evaluate your decisions not to engage in R&D in China. (multiple answers

possible)

no52.9%

yes47.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

37.8%

64.3%

74.1%

76.5%

89.8%

0% 20% 40% 60% 80% 100%

legal requirements

cost reductions

competitive environment

need for local innovation

need for local adaptation

47.5%

55.1%

56.3%

63.8%

70.0%

72.2%

0% 20% 40% 60% 80% 100%

unfavorable research environment

HQ restrictions

no need for local R&D

lack of local technical expertise

intellectual property concerns

focus on German R&D


17 | P a g e

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?

Nearly half of respondents maintain multiple operations

throughout mainland China. The diversification within

China is mostly concentrated in the established economic

centers, while companies are only slowly progressing to

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

Greater China region has, however, fallen from 26% in 2013

to 22% in 2015.

Greater China presence Q2 Where in Greater China does your company have additional branches?

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?

Wholly foreign owned enterprises (WFOE) are the most

common legal form for German companies following a

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.

Shanghai41.9%

Other East15.4%

Beijing14.6%

Other North10.6%

Shenzhen/Guangzhou10.4%

Other South7.1%

49.1%

27.2%

16.6%

3.2%

22.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

China Hong Kong Taiwan Macau None

36.4%

12.4% 11.1%

4.8%2.3% 2.3%

16.2%14.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%


18 | P a g e

Legal form Q4 Please describe the legal status of your company.

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.

Turnover Q6 Please indicate your local operation’s annual turnover for 2014 in RMB.

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 Q7 Please specify the main industry of your company.

WOFE, 69.9%

Joint Venture, 12.4%

Holding, 7.1%

Rep Office, 6.3%Other, 4.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<5036.6%

50-25028.0%

251-99921.5%

1000-29995.8%

>29998.1%

<5 million15.7%

5-50 million25.3%

51-250 million25.5%

251-500 million10.9%

501-999 million7.6%

>999 million15.2%

3.8%0.8%1.3%1.8%1.8%2.3%2.5%2.5%

3.5%4.0%4.0%4.3%

6.3%7.1%

13.4%14.9%

25.8%

0% 5% 10% 15% 20% 25% 30%

OtherPharmaceuticals

AerospaceIT/Telecommunications

LogisticsMedical Supplies

Environmental Products/ServicesTourism

Finance/InsuranceConstruction

Plastic/Metal ProductsElectronicsChemicals

Consumer GoodsConsulting/Legal Services

AutomotiveMachinery/Industrial Equipment


19 | P a g e

The largest percentage of companies, 49.2%, maintains

production facilities. This has slightly increased over the

years despite continuous worries of China losing its

competitive edge in manufacturing. Services (48.5%) and

sales (41.7%) are the other main fields of business in which

the responding German companies are active. Other areas

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.

Main field of business Q8 Please indicate your local entity’s main field of business (multiple answers

possible).

China is maturing as an investment destination for German

companies, with most companies (59.8%) having already

been operating in the country for over 10 years. This

reflects the tremendous importance of China’s market for

German companies, with the majority of companies

moving into the market as its economy increasingly opened

up to foreign investment. However, the 14.2% of

companies which have operated at their location for less

than 3 years reflects that there is a steady influx of new

investments throughout China. Overall, the majority of

German companies have gained significant experience in

the market and have been able to position themselves

accordingly.

Years in China Q9 For how many years has your company been physically present in China?

About the survey

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

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.

The survey was conducted online among our member

companies. After controlling the dataset for quality, valid

responses from 439 member companies were collected.

In order to be representative of the total of 5,200 German

companies in China at a 95% confidence level with a

tolerated margin of error of 5%, a minimum required

sample of 358 respondents was required. The sample also

satisfies the distribution of region, company size, and

industry resulting in a representative and statistically

significant sample for the analysis of the German

companies in China.

49.2% 48.5%41.7%

17.4% 16.2% 15.9% 15.7%

0%

10%

20%

30%

40%

50%

60%

>15 years33.7%

10-15 years26.1%

7-10 years17.2%

4-6 years8.9%

2-3 years9.1%

< 2 years5.1%


20 | P a g e

Facts and Figures of Sino-German

Relations

EU58.2%

Europe (ex. EU)11.3%

USA7.1%

Americas (ex. USA)3.2%

China7.5%

Asia (ex. China)10.1%

Africa2.1%

Oceania0.6%

Share of German foreign trade by region 2014 Top 10 German trading partners 2014 in bn EUR

6

2

4

5

6

7

9

16

17

75

2

6

5

6

5

7

7

8

19

79

0 20 40 60 80 100 120 140 160

Hong Kong

Vietnam

Thailand

Malaysia

Singapore

Taiwan

India

South Korea

Japan

China

German exports 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

34

42

46

48

56

54

84

96

75

73

102

37

40

39

40

36

48

42

49

79

88

68

0 20 40 60 80 100 120 140 160 180

Czech Republic

Belgium

Switzerland

Poland

Austria

Italy

UK

USA

China

The Netherlands

France

German exports German imports

Chinese trade relations by state 2014 in bn EUR

0.30.20.60.60.80.60.71.01.9

6.43.7

2.84.2

14.116.4

10.5

0.30.60.40.80.91.41.42.4

2.00.9

5.67.4

6.79.4

12.123.1

0 5 10 15 20 25 30 35

Mecklenburg-Vorpommern

Brandenburg

Saarland

Berlin

Thuringia

Saxony-Anhalt

Bremen

Schleswig-Holstein

Rhineland-Palatinate

Saxony

Lower Saxony

Hesse

Hamburg

Baden-Württemberg

Bavaria

North Rhine-Westphalia

Exports to China 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


1.5

1.6

1.7

2.3

2.3

2.7

3.3

3.6

8.2

13.1

0 2 4 6 8 10 12 14

Electronic components

Electric motors and generators

General machinery

Specialized machinery

Tool making machinery

Electricity controll equipment

Aircraft

Measuring instruments

Vehicle components

Vehicles and engines

1.6

1.8

1.8

1.9

2.0

2.2

2.6

3.5

7.4

11.7

0 2 4 6 8 10 12 14

Clothing

Lamps

Electronic components

Electric motors and generators

Houshold appliances

Shoes

Consumer electronics

Outer garments

Telecommunication equipment

Computers


21 | P a g e

Facts and Figures of Sino-German Relations

Number of new investment projects in

Germany by country of origin 2014

168 190

13075 77 69 53

11421

44

58 32 3816

0

50

100

150

200

250

300

Greenfield M&A

Source: Germany Trade and Invest

Average expected wage increases at German

companies in China

10.2%

8.9% 8.8%8.1%

0%

2%

4%

6%

8%

10%

12%

2012 2013 2014 2015

Source: German Chamber of Commerce in China

1.47

0.82 0.79 0.760.68

0.280.15 0.13

0.0

0.5

1.0

1.5

2013 2014

Top Asian destinations by German airline

passengers in mn passengers


Number of Chinese residents in Germany and

Germans in China 2014

110,284

21,700

0

20,000

40,000

60,000

80,000

100,000

120,000

Chinese in Germany Germans in China

Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis

135.9 per 100,000

1.6 per 100,000


22 | P a g e

Overview of Key Economic Figures

GDP Growth and Composition

2010 2011 2012 2013 2014

Q1 2015

GDP growth 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 -

GDP in trillion RMB 40.1 47.2 52.0 56.9 63.6 14.1

GDP per capita in RMB 29,992 35,000 38,354 41,838 - -

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

Production and Retail

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

Investment

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

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

Sino-German Trade Relations

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

Source: NBS, Statistisches Bundesamt.

The German Chamber of Commerce in China

The German Chamber of Commerce in China supports German

companies in their activit ies in China. Divided into the

regional centers of Beijing, Shanghai and South & South-

West 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

(AHK) Greater China

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.

www.china.ahk.de

German Business in China

Business Confidence Survey 2015

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]


in China • North China

Landmark Tower 2, Unit 0818

8 North Dongsanhuan Road,

Chaoyang District, Bejing 100004

Tel. +86 10 6539 6688

[email protected]


in China • Shanghai

25 F, China Fortune Tower

1568 Century Avenue

Pudong District, Shanghai 200122

Tel. +86 21 5081 2266

[email protected]


in China • South & Southwest China

Room 1903, Leatop Plaza

32 Zhu Jiang East Road

Tianhe District, Guangzhou 510620

Tel. +86 20 8755 2353

[email protected]

german business in china 2015 - ahk greater...

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