Beruflich Dokumente
Kultur Dokumente
in China
Business Confidence Survey
2015
Press Conference
China
Key Developments
After being resilient during the onset of the economic slowdown in 2014,
German companies are beginning to be affected by slower growth.
Compared to the previous year, when German business performed
extraordinarily well, the overall business sentiment has been revised
downward.
Overall, companies are expecting business to expand with growth easing to
slower levels rather than stalling.
The majority of companies remain positive about Chinas future investment
potential and remain committed to the Chinese market despite slower
future growth.
Economic reforms are still welcomed, but enthusiasm for them has fallen.
German companies are already engaging in modern manufacturing and in
R&D making them less reliant on low-end manufacturing and exports.
A shortage of skilled workers is a major constraint for companies.
Other key concerns pertain to the limitations of the internet and Chinas
regulatory framework.
Content
page
2
3
5
7
20
22
1|Page
Sino-German Trade
Relations
80%
60%
40%
20%
0%
10%
1990
47%
48%
2010
2014
21%
2000
China
Other Asia
154
160
131
140
120
100
80
60
28
40
20
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Trade
German exports
German imports
German exports
German imports
Source: Statistisches Bundesamt / German Chamber of Commerce in China analysis Note: Asia
excluding Arab nations.
Electronics
Machinery/mechanical goods
Clothing
Furniture
Shoes
Other
Vehicles
Machinery/mechanical goods
Electronics
Optics
Aircraft
Other
26.5%
22.8%
10.0%
4.1%
2.7%
33.9%
27.8%
23.8%
13.9%
6.9%
4.2%
23.4%
0%
5%
2|Page
German Investment in
China
5,000
2.1
2.1
2
1.5
1.2
1.1
5,200
5,000
4,800
4,350
4,000
3,000
2,600
2,486
2,454
2,224
2,000
1,000
0
2012
2013
GCC Members
2014
2015*
2011
2012
2013
2014
Source: Mofcom
West Other
Northeast 1.8% 5.2%
3.7%
Periphery YRD,
Bohai, PRD
6.4%
Pearl River Delta
(PRD)
12.9%
Yangtze River
Delta (YRD)
51.7%
Bohai
Economic Rim
18.3%
3|Page
General machinery
12%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
2014
10%
Special-purpose
machinery
Motor vehicles
8%
6%
4%
2014
Source: NBS
Apr
2015
May
Mar
Dec
Jan/Feb
Oct
Nov
Sep
Jul
Average
Aug
0%
Jun
Electric machinery
and equipment
May
2%
-2%
9
8
6
5
3
2
0
-2
30%
25%
20%
15%
10%
5%
0%
-5%
2015
German exports (in %)
5|Page
present, German investment activity to China has not been with pollution. At present, German industry 4.0 is at the
affected by slower economic growth.
center of the drive toward continuous modernization of
manufacturing.
Monthly development of German FDI to China in million
USD
Education has played an equally important role in
Germanys development. In addition to universities with a
450
410
strong focus on research and development, vocational
400
training is another cornerstone of its education system.
350
300
Some professions at vocational schools are the source of
280
300 260
240
highly technically skilled employees. Universities and
250
210
180
vocational schools focus on different but complementary
170
200
160
160
140
120
skill-sets, and are vital in providing companies with the
150
100
100
skilled employees they require.
50
50
2014
Apr
Mar
Jan/Feb
Dec
Nov
Oct
Sep
Aug
Jul
Jun
Mai
Apr
Mar
Jan/Feb
2015
Source: NBS
Using China as a source for cheap labor is not and has not
been the major motivation of German companies
operating in China. Consequently massive labor intensive
factories have not been a hallmark of German investment
in China. Instead, German companies operating here are
in need of highly qualified employees to operate high-tech
manufacturing as well as to provide sophisticated service.
With a focus on advanced industrial sectors German
companies provide excellent employment opportunities
for Chinese employees.
German industry will find a more advanced Chinese
economy much more compatible with its operations in the
future. In many cases German companies operating in
China are already pioneers in industrial upgrading and in
many aspects German companies are well positioned to be
a partner to China during its transformation. This
partnership can go beyond manufacturing, too. Improving
the environment is a key issue in China, and Germany is a
leader in the use of green technology and reducing its
reliance on fossil fuels. In dealing with the consequences
of an aging society, German companies are also leaders in
health care services and equipment. These are strategic
areas with high growth potential. As the Chinese economy
shifts to more moderate economic growth, it is being
confronted with new challenges, ranging from structural
adjustments to changes in society. There is, however,
ample room for opportunity to further strengthen and
deepen Sino-German cooperation.
6|Page
Business Outlook
The largest group of responding companies (39.2%)
anticipates that the growth of the Chinese economy will
not change while 33.8% think it will further cool in 2015.
This is the first time in two years that the general outlook
does not anticipate an upturn of the economy, reflecting
an adjustment of the companies perception following a
more optimistic outlook in 2013 and 2014. Companies
expectations for the economy have reached levels similar
to those of 2012 when GDP growth dropped from 9.3% in
2011 to 7.8% in 2012 and Chinas economic growth
departed from its period of high growth. While in 2013 and
2014 there was still hope for a return of higher growth
rates, companies are now adjusting to the new economic
realities in China, anticipating more moderate economic
growth in the future. The responses reflect a challenging
first six months which has seen a persistent cooling of key
economic indicators.
Q10a How do you evaluate the Chinese economy in 2015? 2012-2014 from Q10 How do you evaluate the Chinese economy and general outlook for
your industry in 2015?
previous surveys.
45%
40%
48.9%
47.7%
50%
42.6%
25%
39.2%
33.6%
33.8%
30.2%
27.2%
27.0%
20%
39.2%
34.1%
35%
38.3%
35%
30%
38.4%
40%
14.0%
27.5%
27.0%
25%
20%
15%
17.5%
15%
30%
33.8%
10%
10%
5%
5%
0%
0%
2012
2013
improving
2014
unchanged
2015
worsening
improving
neutral
economy
worsening
industry
7|Page
With 50.6% of companies expecting to either exceed or Share of companies expecting increases for key
achieve their business targets, the overall sentiment of business indicators 2012 to 2015
German companies remains positive. This is down by 10.5 Q12 Please indicate your expectations for 2015 to 2014 for your company in the
following areas (turnover/profit/investment/employment). 2012-2014 from
percentage points, reflecting an adjustment from 2014 previous surveys.
when German companies remained largely unaffected by
73.6%
80%
69.7%
a slowing market environment. For 2015 more companies
70%
64.8%
expect to mostly achieve (rather than exceed) their
64.5%
60.8%
59.8%
60%
58.0%
54.2%
business targets (+6 percentage points), while the share of
51.2%
52.6%
50.2%
companies expecting to only partly achieve or not achieve 50% 48.4%
45.3%
47.6%
45.3%
40%
38.7%
their targets has risen by 4.7 percentage points.
30%
20%
Q11 To what extent were you able to achieve your business targets in 2014, and
what are your expectations for 2015?
10%
38.8% 37.8%
40%
0%
2012
35%
turnover
30%
25%
profits
2014
investment
2015
employment
25.5%
22.3%
19.5%
17.6%
14.2%
20%
15%
2013
12.8%
10%
5%
Q12 Please indicate your expectations for 2015 to 2014 for your company in the
following areas (turnover, profit, investment, employment).
100%
0%
exceed
achieve
mostly
achieve
90%
80%
70%
2014
2015
60%
14.7%
17.5%
15.5%
16.6%
45.9%
38.1%
20.8%
31.4%
50%
40%
8|Page
83.3%
85.5%
84.4%
79.2%
80%
70%
69.4%
60%
59.3%
63.2%
65.9%
60.2%
50%
77.6%
77.3%
57.8%
40%
30%
20%
10%
0%
2012
2013
2014
automotive
machinery
2015
services
Q14 How important are the following reasons for your companys presence in China?
61.2%
35%
Sales potential
Market Conditions
40%
30.3%
29.7%
31.7%
30.7%
25.5%
38.4%
17.0%
13.8%
33.3%
26.7%
14.5%
31.8%
28.9%
14.0%
0%
very important
important
26.2%
24.7%
27.5%
30.1%
40%
neutral
60%
10.5%
19.1%
29.4%
24.8%
20%
18.8% 10.6%
30.1%
Proximity to suppliers
29.1%
11.3% 2.6%
25.5%
33.8%
R&D 11.6%
5.0% 2.4%
40.1%
39.9%
31.5%
46.1%
33.5%
80%
100%
not important
30%
25%
20%
15%
12.0%
8.7%
11.8% 11.5%
10%
13.2% 14.5%
5%
0%
top 1 market among top 3
markets
low priority
turnover
profits
9|Page
Main markets
Q15 Please indicate the most important market in terms of revenue generation for Q16 Which regions are the most important for your business? (multiple answers
your companys local operation.
possible)
80%
75.3%
Yangtze Delta
81.7%
70%
Bohai Rim
53.8%
60%
Pearl River Delta
45.9%
50%
Southwest
20.7%
40%
Central
15.5%
North
14.8%
30%
16.8%
20%
7.9%
10%
Other South
7.2%
West
6.6%
0%
China
EU
Other exports
0%
20%
40%
60%
80%
100%
Note on regions: Yangtze Delta (Shanghai, Zhejiang, Jiangsu), Bohai Rim (Beijing,
Tianjin, Shandong, Hebei, Liaoning), Pearl River Delta (Guangdong), North
(Heilongjiang, Jilin), Central (Shanxi, Anhui, Jiangxi, Henan, Hunan), Other South
(Fujian, Hainan), Southwest (Sichuan, Chongqing, Guizhou, Yunnan, Guangxi), West
(Inner Mongolia, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang).
6.6%
4.4%
3.8%
52.0%
49.5%
73.6%
50.8%
55.5%
54.1%
5.7%
49.5%
1.6%
48.4%
30.4%
China
Europe
increasing
16.3%
15.6%
15.3%
10.7%
9.5%
7.9%
Japan
Korea
US
Taiwan
Hong
Kong
Other
unchanged
decreasing
not a competitor
10 | P a g e
very unlikely
11.2%
Germany
Other EU
Malaysia
Thailand
Indonesia
Philippines
likely
25.4%
Vietnam
Other ASEAN
unlikely
36.0%
0%
10%
20%
30%
40%
50%
60%
70%
strongly increasing
increasing
unchanged
decreasing
strongly decreasing
not used
80%
90%
100%
neutral
23.0%
11 | P a g e
Business challenges
Human resource related issues remain the biggest
challenge for German companies operating in China.
Finding qualified staff was reported as a problem or major
problem for 82.4% of companies, an increase of 8.3
percentage points. Finding qualified staff has replaced
increasing labor costs, which has not increased
significantly as a problem since 2014, as the biggest
challenge facing German companies. These issues were
followed by problems with retaining qualified staff, which
eased slightly amid higher uncertainty in the labor market
as the economy cools. The prominence of challenges
related to finding and retaining qualified staff is an
indication of the shortage of skilled professionals and
workers in China, which can be identified as a key obstacle
in transforming the Chinese economy. Perceived currency
risks are named as a challenge by 59.1%. Challenges
pertaining to administrative hurdles (57.2%), domestic
protectionism (42.8%), legal insecurity (48.1%) and
protection of intellectual property (48.1%) underline the
fact that the regulatory environment in China still remains
a major challenge for German companies. Internet speed
(56.6%) and internet censorship (51.6%), which was added
this year, have established themselves as another area of
concern. The anti-corruption campaign seems to have
made an impact: corruption has dropped out of the top 10
business challenges for the first time since the German
Chamber began conducting its business confidence survey.
On the upside, with few exceptions, a lower share of
companies are reporting any of the 23 items monitored
business challenges as being a major problem or problem.
Whereas in 2013 all items in the top 10 had values greater
than 50%, in 2015 it was only 7. This reflects a trend
suggesting that German companies are increasing their
ability in dealing with business challenges in China as well
as improvements in the market environment.
75.8%
62.2%
59.1%
Currency risks
Bureaucracy/administrative hurdles
57.2%
56.6%
51.6%
Internet censorship
Domestic protectionism
48.2%
Legal insecurity
48.1%
48.1%
0%
2015
20%
40%
60%
80%
100%
2014
Reforms
Generally, the announced reforms continue to be largely
welcomed by German companies for their very positive or
positive impact. However, the initial enthusiasm recorded
in 2014 has been scaled back due to a lack of noticeable
progress. The continued anti-corruption drive (60.3%) was
identified as having had a noticeable positive impact, but
it was also the only item which was evaluated more
positively compared to last year. The most welcomed area
of reform continues to be plans to boost domestic
consumption (61.0%) which also relates to increased
urbanization (49.7%). A sharp drop has been recorded in
the impact of improved environmental protection,
decreasing by 19 percentage points. Areas pertaining to
the financial regulations where reforms have been making
the biggest advances are of less relevance to German
companies.
Evaluation of reform items
Q18 Please evaluate the impact of the central governments economic policies on
your company.
Expanding domestic consumption
61.0%
Anti-corruption drive
60.3%
52.1%
49.7%
Increased urbanization
49.4%
46.7%
40.8%
Reduction of red-tape
37.6%
31.4%
24.1%
12 | P a g e
Investment climate
Business friendliness
Q19 How friendly do you consider local authorities towards your business operation?
Sourcing/Procurement
25.4%
39.6%
16.0%
Trading
21.1%
33.7%
34.5%
36.9%
R&D
17.6%
31.5%
Production
16.8%
31.8%
0%
40.3%
20%
40%
very attractive
attractive
8.3% 1.7%
35.6%
7.0% 1.8%
36.9%
32.6%
27.3%
60%
10.6% 3.2%
11.1% 7.2%
18.5%
80%
5.6%
100%
neutral
13 | P a g e
The share of companies planning to invest in new locations Type of investment considered
in China has remained stable at around 30%. A nearly equal Q25 What types of investment are you considering? (multiple answers possible)
share of companies are considering new investments 60%
55.7%
(29.1%), gaining slightly over 2014. The highest percentage
(40.5%) stated that they do not have any intention to 50%
42.3%
invest in new locations within China, but this figure has
40%
33.5%
fallen from 45.7% in 2014. The figures are consistent with
other findings of this years study, indicating that 30%
hesitation to further expand investment in China has
19.1%
20%
increased amid the shift to more moderate growth.
Investment intentions in new locations in China
Q22 Is your local business operation planning any new investments at new locations
in China within the next 2 years?
10%
0%
50%
47.5%
45.7%
35.3%
30.4%
Production
Sales/Marketing
R&D
40.5%
40%
30.5%
30%
29.1%
20%
Services
23.9%
17.2%
10%
0%
2013
2014
yes
2015
no
maybe
60.3%
Regional diversification
34.0%
Cost reduction
33.0%
Investment incentives
12.9%
11.9%
6.7%
Other
10.3%
0%
10%
20%
30%
40%
50%
60%
70%
14 | P a g e
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
yes
10.0%
maybe
21.2%
no
68.8%
80%
Q27 If you are considering to shift investment, what is your major motivation for
investments in ASEAN countries? (multiple answers possible)
70%
no
50.4%
60%
Following key customers
51.0%
50%
40%
Regional diversification
48.1%
Cost reduction
maybe
8.8%
30%
20%
45.2%
yes
40.8%
10%
Investment incentives
22.1%
0%
20.2%
9.6%
0%
10%
20%
30%
40%
50%
60%
15 | P a g e
Q33 Please evaluate your decisions not to engage in R&D in China. (multiple answers
possible)
100%
focus on German R&D
90%
80%
yes
47.1%
70%
72.2%
70.0%
60%
63.8%
50%
40%
30%
no
52.9%
20%
56.3%
HQ restrictions
55.1%
10%
0%
47.5%
0%
20%
40%
60%
80%
100%
89.8%
76.5%
competitive environment
74.1%
cost reductions
64.3%
legal requirements
37.8%
0%
20%
40%
60%
80%
100%
16 | P a g e
Shanghai
41.9%
Other North
10.6%
49.1%
45%
40%
35%
27.2%
30%
22.1%
25%
20%
16.6%
15%
10%
3.2%
5%
0%
China
Hong Kong
Taiwan
Macau
None
Beijing
14.6%
40%
36.4%
35%
Other East
15.4%
30%
25%
20%
16.2%
14.6%
Nearly half of respondents maintain multiple operations 15%
12.4%
11.1%
throughout mainland China. The diversification within 10%
4.8%
China is mostly concentrated in the established economic
2.3%
2.3%
5%
centers, while companies are only slowly progressing to 0%
central and western regions. Over a quarter of companies
maintain offices in Hong Kong, while 16.6% have an
additional presence in Taiwan. Only a small fraction of
companies have an additional presence in Macau. The
share of companies with only one operation throughout the
Wholly foreign owned enterprises (WFOE) are the most
Greater China region has, however, fallen from 26% in 2013
common legal form for German companies following a
to 22% in 2015.
relaxation of the regulatory framework in China. The share
of companies registered as WFOEs (69.9%) has increased
progressively since 2007, when only 52.0% were registered
as such and a higher share of companies were registered
as representative offices (27.1%). After the shift in recent
years the distribution of types of legal forms has remained
relatively steady since 2013.
17 | P a g e
Legal form
Turnover
Q6 Please indicate your local operations annual turnover for 2014 in RMB.
100%
>999 million
15.2%
Other, 4.3%
Rep Office, 6.3%
Holding, 7.1%
Joint Venture,
12.4%
90%
80%
70%
501-999
million
7.6%
60%
50%
5-50 million
25.3%
251-500
million
10.9%
40%
WOFE, 69.9%
30%
<5 million
15.7%
20%
10%
51-250 million
25.5%
0%
1000-2999
5.8%
>2999
8.1%
<50
36.6%
251-999
21.5%
50-250
28.0%
Machinery/Industrial Equipment
Automotive
Consulting/Legal Services
Consumer Goods
Chemicals
Electronics
Plastic/Metal Products
Construction
Finance/Insurance
Tourism
Environmental Products/Services
Medical Supplies
Logistics
IT/Telecommunications
Aerospace
Pharmaceuticals
Other
25.8%
14.9%
13.4%
7.1%
6.3%
4.3%
4.0%
4.0%
3.5%
2.5%
2.5%
2.3%
1.8%
1.8%
1.3%
0.8%
3.8%
0%
5%
10%
15%
20%
25%
30%
18 | P a g e
10-15 years
26.1%
60%
50%
49.2%
48.5%
41.7%
40%
30%
17.4%
16.2%
15.9%
15.7%
10%
19 | P a g e
Africa
2.1%
Oceania
0.6%
France
The Netherlands
China
USA
UK
Italy
Austria
Poland
Switzerland
Belgium
Czech Republic
China
7.5%
Americas (ex. USA)
3.2%
EU
58.2%
USA
7.1%
68
102
88
79
49
73
75
96
84
20
42
48
36
40
39
40
54
56
48
46
42
34
37
40
60
80
German exports
100
120
140
160
180
German imports
China
17
South Korea
16
India
North Rhine-Westphalia
10.5
Bavaria
16.4
Baden-Wrttemberg
14.1
Hamburg
4.2
6.7
Hesse 2.8
7.4
Lower Saxony
3.7
5.6
Saxony
6.4
0.9
Rhineland-Palatinate 1.9 2.0
Schleswig-Holstein 1.0 2.4
Bremen 0.7 1.4
Saxony-Anhalt 0.6 1.4
Thuringia 0.8 0.9
Berlin 0.6 0.8
Saarland 0.6 0.4
Brandenburg 0.2 0.6
Mecklenburg-Vorpommern 0.3 0.3
79
75
Japan
19
8
9 7
Taiwan
7 7
Singapore
6 5
Malaysia
5 6
Thailand 4 5
Vietnam 2 6
Hong Kong
62
0
20
40
60
80
German exports
100
120
140
160
German imports
23.1
12.1
9.4
10
Exports to China
15
20
25
30
35
13.1
Vehicle components
Measuring instruments
Specialized machinery
General machinery
2.6
Shoes
2.2
2.3
Houshold appliances
2.0
2.3
1.9
Electronic components
1.8
2.7
3.5
Consumer electronics
3.3
11.7
7.4
Outer garments
3.6
Aircraft
Computers
Telecommunication equipment
8.2
1.7
1.6
Lamps
1.8
Electronic components
1.5
Clothing
1.6
0
Source: Statistisches Bundesamt
10
12
14
10
12
14
20 | P a g e
300
12%
10.2%
250
200
10%
114
168
8%
190
58
32
38
75
77
69
130
50
8.8%
8.1%
44
150
100
8.9%
21
16
53
6%
4%
2%
Greenfield
0%
M&A
2012
2013
2014
2015
1.5
1.47
120,000
110,284
135.9
per 100,000
1.0
0.82
0.79
100,000
0.76
0.68
80,000
0.5
0.28
0.15
0.13
60,000
0.0
40,000
21,700
20,000
2013
Source: Statistisches Bundesamt
2014
1.6
per 100,000
0
Chinese in Germany
Germans in China
21 | P a g e
2011
2012
2013
2014
Q1 2015
in %
10.4
9.3
7.7
7.7
7.4
Q1
in %
11.9
9.7
8.1
7.7
7.4
7.0
Q2
in %
10.3
9.5
7.6
7.5
7.5
Q3
in %
9.6
9.1
7.4
7.8
7.3
Q4
in %
9.8
8.9
7.9
7.7
7.3
40.1
47.2
52.0
56.9
63.6
14.1
29,992
35,000
38,354
41,838
GDP growth
GDP
in trillion RMB
in RMB
Primary sector
share in %
10.1
10.2
10.1
10.0
9.2
5.5
Secondary sector
share in %
46.7
46.8
45.3
43.6
42.6
42.9
Tertiary sector
share in %
43.2
43.0
44.6
46.0
48.2
51.6
Industrial production
growth in %
15.7
13.9
10.0
9.7
8.3
6.4
Retail
growth in %
18.4
17.1
14.3
13.1
12.0
10.6
Fixed-asset investment
growth in %
23.8
24.0
20.6
19.6
15.7
13.5
growth in %
17.4
9.7
-3.7
5.3
1.7
11.3
Investment
Price Levels
CPI (consumer)
in %
3.3
5.4
2.6
2.6
2.0
1.2
PPI (producers)
in %
5.5
6.0
-1.7
-1.9
-1.9
-4.6
Foreign Trade
Imports
growth in %
38.7
24.9
4.3
7.3
0.4
-17.6
Exports
growth in %
31.3
20.3
7.9
7.9
6.1
4.7
Trade volume
growth in %
39.6
10.1
0.5
-2.6
8.8
growth in %
44.2
19.8
2.9
0.2
11.3
5.3
growth in %
36.3
2.8
-1.3
-5.1
6.4
21.8
German FDI
in billion USD
1.2
1.1
1.5
2.1
2.1
0.6
22 | P a g e
2015
Contact Person
Mr. Max J. Zenglein
Economic Analyst China
Survey Design and Analysis
German Chamber of Commerce
in China North China
Tel. +86 10 6539 6665
zenglein.max@bj.china.ahk.de
www.china.ahk.de