“SHANGHAI. Fan manufacturer EBM Papst is expanding its plant in the ancient imperial city of Xi'an to become more innovative and supply Chinese data centers. The German robotics startup Neura Robotics is opening a center for humanoid robots in Hangzhou. And Volkswagen is building a kind of Wolfsburg near Shanghai to serve China and the Global South from there.
All these news items are just a few weeks old. This is not a random cluster, but rather a trend, as revealed by a business climate survey published by the German Chamber of Commerce in China on Tuesday.
More than half of the companies intend to invest more in the People's Republic in the next two years.
Four out of five companies stated that this is necessary to remain competitive.
627 member companies of the Chamber participated in the survey.
Like Volkswagen and EBM Papst, companies are increasingly establishing research facilities in China. “Localization is the most important strategic response,” said Martin Hofmann, Chairman of the Board of the Chamber of Commerce for North China. Essentially, this means that companies are becoming more Chinese and relying more heavily on Chinese developers, managers, and suppliers. Two out of five companies are relocating departments, and a third are shifting supply chains and investments to China. This applies particularly to the automotive and mechanical engineering sectors, said Hofmann, who works full-time for Volkswagen.
With these investments, companies are trying to keep pace with their Chinese competitors. Three out of five respondents expect their Chinese competitors to become innovation leaders in the next five years, while only a fifth consider this unlikely. In the automotive sector, one in five companies already considers China to be a leader, Hofmann said.
There is no question of a complete or partial withdrawal, as demanded by German politicians. Less than one percent of companies plan to leave China entirely or partially. Only six percent are considering this step. This is almost the same number as last year, but a few percentage points lower than in 2022, before the German government adopted its China strategy. Generally, according to the survey, companies are less concerned with geopolitical aspects than with price competition and innovation in China.
Instead, the companies see the international expansion of Chinese corporations as an opportunity. Two-thirds stated that they are involved in their global expansion, primarily as suppliers, while a quarter also contribute by sharing international standards and experience. The companies would like to see less confrontation from the German government. Two-thirds even demand that the German government improve the image of China in Germany, half advocate for active exchange with China, and a third call for strengthening China expertise in Germany.” [1]
1. Deutsche Unternehmen wollen chinesischer werden: Weitere Investitionen und Verlagerungen geplant / Betriebe sehen sich als Partner von Konzernen in China. Frankfurter Allgemeine Zeitung; Frankfurt. 03 Dec 2025: 15.
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