Chinese firms in Germany face growing coronavirus headwinds

By Zhang Dan Source:Global Times Published: 2020/3/19 17:35:36

A German police officer wearing a protective mask checks a driver at the border with Austria, near the German village of Oberaudorf as Germany imposed border controls with five countries in a viral fightback, on Monday. Germany introduced border controls with Austria, Denmark, France, Luxembourg and Switzerland in a bid to stem the coronavirus outbreak. Photo: AFP

An increasing number of Chinese firms in Germany have reported revenue losses and fear for their business prospects, and some of them say they may leave because of growing uncertainties, a survey conducted by the Chinese Chamber of Commerce in Germany found.

How long will the novel coronavirus persist in the country or how long Germany's restrictive policies to curb the virus will remain, is the biggest uncertainty weighing on Chinese firms, Duan Wei, the Chamber's chief executive officer, said in an interview with the Global Times. 

Some German partners have halted their cooperation with Chinese firms, and many projects have been delayed or canceled due to the spreading coronavirus pandemic, he noted. 

About 20 percent of Chinese companies in Germany are involved in the country's renowned auto industry, with the majority providing spare parts to large auto plants there.

Volkswagen, the world's biggest automaker, recently announced its European factories are suspending production. Another German auto titan BMW said on Wednesday it will close its European and South African factories which account for half of its monthly output, while its competitor Daimler reported production interruptions in its German and European plants.

"If auto plants in Germany suspend production and no longer require spare parts from Chinese companies, there is a possibility some will shift business elsewhere," Duan said.

The German government provided 1 billion euros ($1.1 billion) of credit for companies and announced a series of tax reductions to ensure their cash flow. But Duan warned that many private Chinese merchants would still feel great pain. 

Chinese companies in German services industry, including those in tourism and exhibition sectors will operate at a low level in the first half of the year. Hanover Messe, an industrial technology trade fair, has been postponed due to the virus. 

In 2019, bilateral trade between China and Germany hit 205.7 billion euros ($224 billion), the Xinhua News Agency reported. China has remained Germany's most important trading partner for four consecutive years, and is of particular importance to the country's machinery, auto and chemical engineering sectors. 

According to Duan, Germany is making efforts to delay the peak of the outbreak so that its health care system is not overburdened, and beds in hospitals are sufficient for numbers of incoming coronavirus patients in serious conditions. 

Now, the country's 16 regions have shuttered schools and daycare facilities. Though the federal government has advised people to reduce their movements. 

"The situation is serious. Take it seriously," said German Chancellor Angela Merkel during a televised speech to the nation on Wednesday. "Not since German reunification, actually, not since World War Two, has our country faced a challenge that has required such a high degree of common and united action."

Merkel urged all Germans to follow the rules and warned that a lockdown was still possible, the likes of which has already been implemented in Italy, France, Spain and Belgium.

"Some say the virus will not be eliminated in Germany within a short timeframe and may even persist for one to two years," Duan said. "If so, it would pose great challenges to all firms in Germany, including those from China."

Germany now has the fifth-highest number of confirmed coronavirus cases in the world, according to the Johns Hopkins Coronavirus Resource Center, with 12,327 cases and 28 deaths. 

It is notable that Germany has so far succeeded in keeping its coronavirus mortality rate low compared to other countries, partly due to its strong healthcare system, Duan said.

He added that the potential for cooperation between China and Germany is huge due to Germany's world-leading pharmaceutical industry and biomedicine development and China's established experience and research in fighting the new coronavirus. 



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