Positions

Challenging market conditions, fierce competition, pricing pressures, and sluggish economic growth have heightened concerns regarding the unequal treatment and unfair competition faced by German companies.

German businesses welcome competition. However, German companies in China can only fully unfold their high-quality, innovative, and green potential in a fair and healthy business environment. We therefore advocate for creating a true level playing field that allows German and Chinese companies to act on equal footing.

The "Buy China" trend has emerged as the primary regulatory and market challenge for German companies operating in China. Moreover, preferential treatment of local firms is another significant challenge they face.

We advocate for implementing equal treatment policies, especially in public procurement and to ensure a zero tolerance to unequal treatment cases of German companies in China by engaging Chinese governments on all levels.

Legal uncertainty has been a major problem for German companies in China for a long time, for example through vague clauses in various laws. Especially how policies are implemented and executed remains a challenge.

We advocate for establishing a clear wording in Chinese policies with concrete definitions, communicating actual requirements more clearly and giving guidance how companies can fulfill them.

Two-thirds of German companies in China report intellectual property challenges, especially increasing counterfeiting and fake products, leakage of company and business secrets as well as long and challenging processes when prosecuting IP infringements in court.

We observe that wrongful accusations of infringement against foreign companies are on the rise. To address all issues related to IP protection, we advocate for improved enforcement of IP rights, stronger measures against infringers and attackers, as well as the removal of barriers that hinder the prosecution of infringement cases in court in China.

Chinese cyber and data security regulations have been a longstanding concern for German companies. Especially compliance with cross-border data transfer regulations is challenging.

To enhance transparency and certainty in cross-border data transfers, we advocate for a clear definition of what constitutes "important data" across various industries, as well as increased dialogue with Chinese authorities on central and local levels.

In response to increasing market competition from local companies, German companies in China are ramping up their localization efforts of research & development and innovation activities. However, challenges such as unequal access to Chinese innovation programs are barriers for innovation today.

We advocate for easier access to local financing resources and local innovation programs in China for German companies. This will help them to better localize and expand their research & development and innovation activities in China.

While there are initiatives aimed at opening up markets in China, unofficial barriers continue to persist alongside the formal regulations, such as the verbal rejection of product licenses, non-publicly available documents related to local protectionism, or challenges in obtaining licenses.

We urge Chinese authorities to ensure the effective enforcement of market entry policies at the local level and to provide training to local officials on this matter.

German companies expect greater impact from most policy initiatives in China. While companies appreciate the efforts on decarbonization and green transitions, they note less efforts in relaxing cross-border data transfer regulations, implementing centralized regulations locally, strengthening the private sector, and ensuring equal access to public procurement.

We encourage the Chinese government not only to improve the policy frameworks in policy areas, but to more deeply implement them on the ground and to support local level authorities in this endeavor.

German companies in China find the deteriorating perceptions of China in Germany/EU particularly challenging for their business. Especially in times characterized by growing geopolitical and trade tensions, a more informed picture and more profound knowledge of China has become increasingly vital.

Fostering a more nuanced understanding of China in Germany and investing more in developing China-related expertise across economic, political, and social domains would be helpful for German companies doing business in China.

German companies in China would appreciate a stronger emphasis from the German government on China as a partner. Despite increasing systemic differences, China remains a crucial global growth market and innovation driver for the coming years.

German companies’ engagement in China is needed to strengthen their innovative power and global competitiveness.  A more balanced relationship with China, focusing on China as a partner, is needed. We recommend establishing more regular formats focusing on economic exchange to support German companies on the ground.