Xinhua News Agency, Beijing, Feb. 24 (Xinhua) -- Why don't German companies believe in the "de-risking" preaching?
Xinhua News Agency reporter Zhang Yuan.
Kang Linsong, chairman of the board of directors of Mercedes-Benz Group AG in Germany, said in the release of the company's quarterly results a few days ago that any protectionist measures taken by the EU against China will have a devastating impact on economies like Europe.
Kang Linsson's statement represents a wide range of sentiments in the German and European business community. Judging from a series of recent reports and data released by Germany**, think tanks and chambers of commerce, Sino-German investment cooperation has not been affected by external noise. At a time when US and Western politicians are clamoring for "de-risking" China, German companies continue to increase investment in China and continue to deploy in the Chinese market. What are the unique attractions of the Chinese market? Why can't you eat the clamor for "de-risking"?
German companies are investing more in China.
The German Institute for Economic Research recently pointed out in a report based on Bundesbank data that the total amount of German direct investment in China in 2023 reached a record 11.9 billion euros, an increase of 43%。According to the report, German companies have invested roughly as much as they invested in China in the past three years from 2015 to 2020. In addition, German investment in China accounted for 10 percent of Germany's total overseas investment in 20233%, the highest level since 2014.
Data released by the German Federal Statistical Office in the middle of this month also showed that in 2023, the amount of Germany and China will be 253.1 billion euros, and China will become Germany's largest partner for the eighth consecutive year.
Jörgen Mattis, author of the report of the German Institute for Economic Research, believes that the data shows that large German companies still see China as a huge growing market and plan to put more business in China to hedge against the risks of rising global tensions.
In January this year, the German Chamber of Commerce in China released the 2023 24 German Business Confidence Survey, to which 566 member companies responded. According to the report, more than nine out of ten companies surveyed plan to continue to establish roots in the Chinese market, and more than half plan to increase investment in China in the next two years. According to the report, China's "significance to the German economy remains unique". With its huge consumer market, advanced chain infrastructure and growing innovation capabilities, China continues to be one of the most important markets for German companies.
What is the unique attraction of the Chinese market?
Analysts pointed out that the increase in Sino-German economic and trade exchanges and enterprise cooperation is a rational choice based on industrial experience. China's innovation leadership in new energy vehicles and green energy is gradually increasing, while Germany still has advantages in traditional industries such as automobiles and chemicals, and the cooperation between the two sides is conducive to jointly improving industrial capabilities.
Volkswagen and Xpeng Motors jointly developed the best electric vehicles, BMW's sixth-generation power battery project started in Shenyang, and Siemens invested in the ...... of Chengdu Intelligent Manufacturing BaseThese are vivid examples of German companies optimistic about China's future competitiveness.
In 2023, the Volkswagen Group will locate its largest R&D center outside the German headquarters in Hefei. Volkswagen Group China's Chairman and CEO Bratt said that Volkswagen is fully integrating into China's industrial ecosystem. In a dynamic market environment, rapid development is the key to maintaining competitiveness.
Wu Huiping, a professor at the Center for German Studies at Tongji University, believes that the Chinese market has an attraction in the eyes of German companies that is difficult to find in other markets. She pointed out that after the escalation of the Ukraine crisis, the operating costs of German enterprises have risen significantly, and they are facing many problems such as energy fluctuations and shortage of skilled workers in the labor market, which has weakened the attractiveness of investing in Germany. In contrast, China's complete production factors, complete chains, and abundant labor force with industrial experience are favored by many German companies.
Why can't you eat the clamor for "de-risking"?
Analysts pointed out that under the conditions of a market economy, as long as you do business, you will definitely face and bear risks, that is, uncertainties in economic activities. The concept of "de-risking" is inherently anti-market economy. Many data and examples show that German companies are actively embracing the Chinese market, and "voting with their feet" proves that "de-risking" and "decoupling and breaking the chain" are unpopular.
According to the Global Business Expectations Report of the Alliance of German Chambers of Commerce and Industry released by the German Chamber of Commerce and Industry, "de-risking" will cause a huge burden on German overseas enterprises, and nearly half of the enterprises will find it difficult to find suitable business partners or business partners.
A number of experts from the Deutsche Bundesbank recently wrote that in the long run, leaving China will bring significant commercial and economic costs to German companies. German companies will miss out on China, the "main sales market", and many of the best chains can only be restructured at the expense of efficiency.
Michael Schumann, chairman of the German Federal Association for Economic Development and Foreign Affairs, said that at present, many Westerners are keen to exaggerate ideological and geopolitical confrontation and warn of investment risks. He suggested that companies go to China to investigate their feelings and talk to the locals more, and they will come to different feelings and conclusions.
Analysts pointed out that the so-called "de-risking" is essentially politicizing and ideologizing economic and trade issues, which not only impacts the authoritative effectiveness of the multilateral system, but also violates economic laws and will ultimately hinder the process of world economic recovery. Trying to reduce political risk through ** barriers is a risk in itself. (ENDS).