BIT to provide security for German firms in China

By Huang Ge Source:Global Times Published: 2020/5/28 17:13:40

Visitors are seen at the 5G Arena during the 2019 Hanover Fair in Hanover, Germany, April 1, 2019.Photo:Xinhua


German companies have confidence in the Chinese market and will not leave as they still see great growth potential, and a widely anticipated bilateral investment treaty (BIT) between China and the EU, expected to be signed by 2020, will provide them with investment security, a German business representative said.

German companies "are here in China and here for China", as about 90 percent of them produce for the Chinese market, while only a limited number are focused on exports, Jens Hildebrandt, executive director of the German Chamber of Commerce in China- North China, told the Global Times.

"That means the Chinese market will be important for German firms in the future," he said.

"There might be considerations about the distribution of management risk. So what we've seen for a couple of years is that additional capacities will be or have been built up in Southeast Asia with the 'China plus one' strategy," Hildebrandt noted.

Many companies in China are looking to diversify their operations by adding another location in Asia, a strategy known as the "China plus one" model, according to media reports.

"German companies are following that, but it never means German companies are leaving China," Hildebrandt said. "It just means they have additional capacities in Southeast Asia."

The pandemic will still lead companies to take a closer look at supply chains, and it is still very important that the Chinese government makes strong efforts to advance reform and opening-up, said the business representative.

"German companies are still very positive toward the Chinese market," he said. "They believe the Chinese market will be one of the most important growth markets of the future and this confidence stays with German companies." 

Germany is the EU country with the largest amount of investment and number of projects in China. There are more than 5,000 German companies seeking growth in China and about 60 percent of them are located in Shanghai, 30 percent in North China and 10 percent in South and Southwest China.

The number of projects with German capital investment was about 10,000 as of the end of 2019, with a total investment of $90 billion, according to China's Ministry of Commerce.

"It is important that we can create better investment security for German companies… It would be really fantastic… if a China-EU investment agreement - a high-quality one - can get signed this year," noted Hildebrandt. 

That would ensure China-Germany economic and trade cooperation could advance to a much more secure level, he said.

China and the EU will strive to complete the BIT by the end of 2020 as both sides strengthen reciprocal cooperation in sectors like interconnectivity, environmental protection, the digital economy and artificial intelligence, Chinese State Councilor and Foreign Minister Wang Yi said on Sunday during a press meeting on the sidelines of the National People's Congress.

German Chancellor Angela Merkel said in a speech on Wednesday in Berlin that the EU has great strategic interest in maintaining cooperation with China.

Merkel reiterated her aim to complete an investment accord with China and find common ground in fighting climate change and global health challenges, according to media reports.



Posted in: ECONOMY,COMPANIES,FOCUS右

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