German firms upbeat on 2023 prospects in China
German firms showed optimism for their business performance prospects in China in 2023 after the world's second-largest economy optimized its COVID-19 response and vowed stronger support for economic growth.
Half of the polled 593 China-based German companies expected a rise in turnover in 2023 compared to 2022, according to the latest business confidence survey from the German Chamber of Commerce in China.
Among the respondents, 37 percent forecast higher profits next year.
Meanwhile, 77 percent of the surveyed German enterprises expected increasing annual growth in their industries for the next five years.
Earlier this month, China announced a string of measures to optimize its COVID-19 response in order to better coordinate it with economic and social development needs — marking the shift into a new phase of the country's COVID-19 prevention and control.
China's recent adjustment of its COVID-19 response is a much-welcomed development and helps restore business confidence in the medium and long term, the report said.
German firms have been investing heavily in China this year. Data from the Ministry of Commerce showed that in the first 10 months of 2022, foreign direct investment from Germany soared 95.8 percent year-on-year.
Many of the German investments in China targeted manufacturing, especially the automobile sector.
BMW Group's joint venture in China, BMW Brilliance Automotive Ltd, said in November that it will invest 10 billion yuan ($1.43 billion) in a new battery production project in Northeast China's Liaoning province.
The new investment follows a phase of extensive upgrading at the BMW production base in the province, including a 15-billion-yuan plant which opened in June 2022.
Last week, domestically produced heavy-duty trucks of German automaker Mercedes-Benz Trucks hit the Chinese market. These trucks are produced in a factory owned by a Sino-German joint venture, which is capable of producing 60,000 trucks each year.
The official launch of the made-in-China Mercedes-Benz trucks was another milestone of the company's long-term development in China, said Karl Deppen, member of the board of management of Daimler Truck Holding AG.
"Despite all odds and challenges, China remains unrivaled in terms of market size and market growth opportunities for many German companies. The large majority will stay committed to the Chinese market," said Clas Neumann, chairman of the German Chamber of Commerce in China.