German companies are bucking the trend of rising protectionism in the European Union by deepening their investments and expanding their presence in the Chinese market. This strategic pivot highlights the pivotal role China continues to play in Europe's economic landscape.
Mercedes-Benz CEO Ola Kaellenius has voiced strong opposition to any EU moves that could increase protectionism against China. Speaking on Thursday, Kaellenius emphasized that such measures would be detrimental to the interconnected European economy, especially in light of the carmaker’s recent strong quarterly results.
Echoing Kaellenius's sentiments, a survey conducted by the German Chamber of Commerce in China revealed that 78 percent of German firms anticipate consistent growth in China over the next five years. Nearly half of the respondents project an annual expansion rate of 5 to 20 percent in their Chinese operations, with larger enterprises showing even greater optimism—90 percent of big companies expect continued growth.
Bosch Group stands out as a prime example of German success in China. Xu Daquan, president of Bosch China, highlighted that China remains a critical hub for innovation and research. Despite facing various challenges, Bosch China achieved sustained and robust growth in 2023, with sales reaching 139.1 billion yuan (approximately $19.5 billion), marking a 5.2 percent year-on-year increase. The company now employs nearly 58,000 people in China.
Looking ahead, Bosch plans to strengthen its foothold in the Chinese market by making ongoing investments, enhancing local manufacturing and R&D capabilities, building deeper local partnerships, and improving customer and market services. These efforts are part of Bosch's broader strategy to foster company expansion and maintain its competitive edge.
The broader trend is reflected in a study by the German Economic Institute, which found that Germany's direct investment in China reached a record high of 11.9 billion euros (about $12.7 billion) last year, a 4 percent increase from the previous year. German direct investments now account for 10 percent of Germany's total foreign investment, a significant surge that underscores the growing economic ties between Germany and China. Notably, cumulative investments over the past three years have matched the total investments made from 2015 to 2020.
This robust investment climate illustrates the strong confidence German businesses have in China's market potential, even as the EU grapples with rising protectionist sentiments. As German firms continue to innovate and expand in China, the economic symbiosis between the two regions appears poised for further growth.
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German companies embrace Chinese market amid EU protectionism concerns
cgtn.com
