German companies welcome to invest in China: MOFCOM
Published: May 25, 2023 09:59 PM
China Germany: Xinhua

China Germany: Xinhua

China welcomes more German companies to invest in China and also hopes that Germany will provide a fair environment to facilitate the bilateral cooperation, said Shu Jueting, spokesperson of the Ministry of Commerce (MOFCOM) on Thursday.

Experts said that the idea of decoupling from China is unrealistic, considering the highly integrated economies of the two countries.

China remained Germany's most important trading partner for the seventh consecutive year in 2022, according to Germany’s Federal Statistical Office. Imports of goods from China to Europe's largest economy saw a year-on-year increase of 33.6 percent, reaching 191.1 billion euros ($204.4 billion). Simultaneously, German exports to China rose by 3.1 percent, amounting to 106.8 billion euros.

Germany is China's largest trading partner, the largest source of foreign investment and an important investment destination in Europe. Chinese statistics reveal that German investment in China soared by 52.8 percent in 2022, reaching $2.57 billion.

A number of German companies have expanded their presence in the Chinese market in recent years, despite the pressure on them to diversify away from China as certain politicians are trying to reduce its dependency on China.

Siemens' chief executive, Roland Busch, emphasized the company's commitment to expanding its market share in China, considering it a crucial market for innovation and growth. 

In an interview with the Financial Times on Wednesday, Siemens CEO Roland Busch said that it was “not an option” to pull out of the market, which accounts for 13 per cent of company revenues.

“I will defend my market share, and if I can, I will expand it,” said Busch. 

The chief executive of luxury carmaker Mercedes-Benz also said in an interview with German media that cutting economic ties with China is unrealistic and attempting to do so would put most of Germany's industry at risk.

"The major players in the global economy, Europe, the US and China, are so closely intertwined that decoupling from China makes no sense," he was quoted as saying.

China accounted for 18 percent of revenues and 37 percent of car sales at Mercedes-Benz in 2022, Reuters reported.

In recent years German car maker BMW has increased its investment in its Chinese joint venture, German chemicals company BASF has planned an integrated production base in Zhanjiang, South China’s Guangdong Province while Audi has announced its first battery-electric vehicle-dedicated factory in Changchun, Northeast China’s Jilin Province.

“All these cases fully demonstrate German enterprises’ optimism about the long-term development prospects in China,” Shu said.

Chen Jia, an independent research fellow on international strategy told the Global Times that it is unrealistic and irrational for Germany to decouple from China.

Forced decoupling would significantly impact Germany's currently weak economic foundation and further deepen the risk of stagnation, Chen cautioned.

According to Germany's Federal Statistical Office, the German economy faced a challenging situation as its GDP contracted by 0.3 percent quarter-on-quarter in the first quarter of 2023. This decline follows a 0.5 percent drop in the fourth quarter of the previous year. The consecutive contractions in these two quarters have pushed the German economy into a state of technical recession.
Shu emphasized that given the lack of impetus for global economic recovery, deepening economic and trade cooperation between China and Germany is in the fundamental interests of both countries and their people.

China is committed to enhancing high-level openness, providing a market-oriented, law-based, and international business environment for international investments, Shu stated. 

The spokesperson expressed the hope that Germany would provide a fair, just, and non-discriminatory business environment for Chinese enterprises and promote open and practical cooperation between the two countries.