中国德国商会-2017-2018年德国在华企业商业信心调查（英文）-40页-1mb

Summary of the German Business Confidence Survey in China (2017/18)

Core Content

The German Chamber of Commerce in China conducted its annual business confidence survey in 2017/18, collecting 423 valid responses from its 2,400 member companies, which represent about 50% of all German companies operating in China. The survey focuses on business sentiment, market conditions, investment climate, and the impact of the Belt and Road Initiative (BRI).

Main Findings

Economic and Business Outlook

• German companies' economic outlook has improved from 2016, with a strong year in 2017 and positive expectations for 2018.
• Machinery/industrial equipment and automotive sectors remain optimistic, while business services also maintain a positive outlook.
• Nearly two-thirds of companies expect to exceed or achieve their business targets in 2017, with similar optimism for 2018.
• Turnover growth has rebounded significantly, but profit, employment, and investment growth have not reached the high levels seen in 2014 or earlier.
• Investment increases are primarily driven by the automotive industry.

Market Environment, Reforms and Policies

• The Chinese market is still important for German companies, though its significance has decreased slightly from previous years.
• Over 40% of German companies feel less welcome in China than before, with only 6.2% feeling more welcome.
• The majority of German companies do not see a significant impact from the reforms initiated after the Third Plenum in 2013.
• The expansion of domestic consumption is seen as a positive reform, while capital flow restrictions are viewed negatively.
• The Made in China 2025 strategy is expected to have a positive impact on German companies' operations in China over the next five and ten years.
• Bilateral relations between Germany and China are considered extremely or very relevant by 58% of respondents, and market access and a level playing field are seen as urgent issues for the new German government.

Business Challenges

• The top business challenges are human resources and internet issues.
• Nearly 80% of companies face problems with finding qualified staff and increasing labor costs.
• Two-thirds of companies struggle with slow cross-border internet speed and access restrictions.
• Domestic competition remains a key challenge, with over 40% expecting Chinese competitors to become innovation leaders within five years.
• Regulatory hurdles, legal uncertainty, and protectionism are among the top challenges, with over half of companies indicating these as major problems.
• Customs issues and capital transfer problems are the most common regulatory obstacles reported.

Investment Prospects

• German companies remain cautious about new investments in China, with only a quarter planning to invest at new locations within the next two years.
• The most common investment locations are Jiangsu, Guangdong, and Sichuan/Chongqing.
• Over half of new investments in 2018 are expected to be in new manufacturing facilities and staff development.
• Market growth expectations and strategic considerations are the main reasons for not investing, while regulatory concerns are cited by one in four companies.
• Only 40% of companies feel optimistic about the further opening of China's market, with over 99% not being aware of or experiencing the effects of the State Council's Document No. 5.

Research and Development

• Over 40% of German companies in China conduct R&D locally.
• Concerns about intellectual property and technology transfer are the main reasons for not engaging in R&D in China.
• However, these concerns have decreased slightly over the years, with China becoming a more attractive R&D location due to improved technical expertise and research environment.

Belt and Road Initiative (BRI)

• Over one-third of German companies see a positive effect of the BRI on their future business, while more than half report no significant effect or no opinion.
• 30% of companies are active in or considering BRI projects, with a lack of suitable projects and insufficient information as the main reasons for non-participation.
• Nearly half of those involved in or considering BRI are already implementing or planning concrete projects.
• The main areas of involvement are automotive, construction, and logistics, together accounting for over 50% of BRI activities.

Key Information

• Company Profile: German businesses in China are concentrated in the Yangtze Delta, Bohai Economic Rim, and Pearl River Delta. Most are Wholly Foreign-Owned Enterprises (WFOEs), with over 70% employing 250 or fewer individuals and two-thirds having a turnover of less than RMB 250 million.
• Confidence in Market Opening: Only 40% of companies feel optimistic about the further opening of China's market in the medium term.
• Cybersecurity Law Impact: One in five companies expects a negative impact from the new Cybersecurity Law, with one in three unsure about its implications.
• Visa/Working Permit Issues: Over a third of companies find it more difficult to obtain visas and working permits for foreign employees, citing higher qualification requirements and unclear regulations as the main issues.

Conclusion

The survey highlights a generally positive business outlook for German companies in China, with confidence in the economy and industry growth. However, challenges such as regulatory uncertainty, labor costs, and internet access persist. While investment remains cautious, R&D activities are increasing, and the BRI is seen as a potential opportunity by some companies.