Despite concerns, German FDI to China grows: MOFCOM

By Chu Daye Source:Global Times Published: 2016/12/2 16:03:39 Last Updated: 2016/12/2 17:53:39

Difficulties spark complaints, but opportunities attract rising investment

China's status as one of the world's top investment destinations remains unchanged, an official with the Ministry of Commerce said on Friday, in response to a survey conducted in China by the German Chamber of Commerce that said German companies feel less welcome in China than in the past.

One-third of the 426 respondents felt less welcome in China than before, and their intentions to invest in new locations within the country have reached a three-year low, the German Chamber of Commerce said on Tuesday.

"We noticed that many of the surveyed companies are from the mechanical, engineering, automobile, and tertiary industries," Shen Danyang, a Ministry of Commerce spokesman, told a press conference on Friday.

"Some of these companies' operations have been negatively affected by rising labor costs, a shortage of talent, and strong competition from Chinese firms," Shen said, adding that it is understandable that some of these companies lost confidence in their Chinese operations and developed a more pessimistic view.

Shen said despite the complaints, data has shown the opposite phenomenon at work, with most German companies still maintaining confidence in the Chinese market.

China's attractiveness for foreign investment has also been increasing, as it continues to push for reforms to better its investment environment, Shen said.

Shen noted that the same German report found over 70 percent of the respondents believed their performance in 2016 would equal or surpass their 2015 levels, and nearly 90 percent of the German companies surveyed said they had no plans to leave China.

In the first 10 months of this year, foreign direct investment (FDI) from the 28 members of the EU increased by 41.5 percent from the same period last year, Shen said.

"FDI from German firms to China increased by 86 percent year-on-year, including some big projects that are capital- and technology-intensive, led by German industrial champions including Volkswagen AG and German chemical giant BASF," noted Shen.

Zheng Chunrong, a professor of German Studies at Tongji University in Shanghai, said growing dissatisfaction and rising investment is indeed a paradox in Sino-German economic ties.

"As the two nations begin to cooperate on an even wider scale, naturally more issues emerge. But the big trend, which is the ever-deepening economic ties, remains unchanged," Zheng told the Global Times on Friday.

"The results of a survey are largely dependent on how the survey is designed. And surveys tend to expose problems rather than attract compliments," Zheng said. "However, it is still a good method of communication."

"We hope that foreign companies can view China's investment environment via an objective lens, and snatch opportunities during the transformation and upgrading of the Chinese economy," Shen said.

Nearly half of all EU companies in China have plans to expand their Chinese operations, according to a separate report by the European Union Chamber of Commerce in June.

A report by the American Chamber of Commerce in April further showed that 60 percent of the member companies listed China as a top three global investment destination.

Posted in: ECONOMY

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