According to a Wednesday report from the German Chamber of Commerce in China, nearly two-thirds of German companies believe they face unequal competition with Chinese firms, feeling at a disadvantage when it comes to connecting with local authorities, obtaining information, and securing licences.
German firms feel they still have the edge when it comes to the quality of their products and the ability to innovate, but feel under price pressure from their Chinese rivals in a way that eats into their profits, the survey said.
Only 7% of German firms felt they had better access to local authorities, compared to 58% believing that Chinese firms had better access. Some 8% felt they had better access to obtaining licences while 30% thought Chinese firms had better access.
The survey was published ahead of Chancellor Olaf Scholz’s trip to China this week, with companies pressing for what they characterise as fairer access to the Chinese market and Europe worried about Chinese excess capacity flooding its market.
The trip is Scholz’s first to China since Berlin drew up a China strategy last year that urged a “de-risking” to reduce economic exposure to the world’s second-largest economy.
Beijing in March made a renewed pledge to treat foreign companies in the same way as their domestic peers in a bid to attract more investment, but the move was treated sceptically by German businesses who said they wanted to see concrete steps.
Germany has become increasingly wary of tethering itself to a country it has described as both a partner and a systemic rival, in particular after Russia’s invasion of Ukraine in 2022 laid bare Europe’s reliance on Russian gas shipments.
Scholz will take with him chief executives from the likes of Siemens and Mercedes, underscoring Beijing’s continued importance.
The survey from Wednesday also found that 95% of German companies think the rising competition from Chinese businesses is impacting them. This includes 70% who believe they are losing part of their market to these companies. Another survey from this week revealed that despite trying to branch out, the German economy still relies a lot on China for various products and materials.
With Inputs from Reuters
