China’s economic slowdown hits German companies
A total of 526 German companies operating in China participated in the business climate survey conducted by the German Chamber of Commerce in Beijing between July and September
The weakening of China’s economy clearly affects the businesses of German companies operating in the Asian giant, the German Chamber of Commerce (AHK) in Beijing reported today following the dissemination of the business climate survey it conducts every year to partners. “The expectations of German companies are the lowest in many years,” said AHK.
The survey shows that about a quarter of German companies, 27%, expect to reach their business goals in China this year. While particularly the automotive companies and manufacturers of machinery – the traditionally strongest sectors of the German economy – significantly reduced their commercial forecasts.
The German Chamber of Commerce also noted that the expectations of companies are affected by the slowdown of the economy in China, added to the effects of the trade conflict. 83% of German companies feel directly or indirectly affected by the trade war between China and the United States.
The AHK said the firms are seeing only shy signs of recovery for next year. “2020 will be a year probably marked by the uncertainties sown by the trade conflict and the weakening of global and Chinese economic growth,” said Jens Hildebrandt, director of the AHK in Beijing.
Hildebrandt stressed, however, that China continues to be an important market that offers valuable business opportunities to companies consulted by the camera.
However, he warned that the growth potential of German companies in China is still limited by restrictions on market access and complex regulatory frameworks.
One in two companies consulted said that the main challenges posed by the Asian country are legal insecurity and a diffuse legal framework, as well as technology transfer.
The lowest growth in the US and China for the trade war between the two main world economic powers slows the world economy and worsens the forecast for Germany. However, Beijing and Washington recently announced their intention to reach an agreement to dispel the conflict.
Source: dpa
