Advanced Manufacturing: How Should German Companies in China Position Themselves?

Recent policy updates suggest a more targeted steering of foreign participation toward sectors aligned with China’s structural priorities.

Three key policy developments deserve attention:

1. The 2025 Catalogue on Industries Encouraged for Foreign Investment, which expands incentives in advanced manufacturing and high-tech equipment. 
2. The updated Catalogue of Encouraged Import Services, encouraging imports of R&D, AI-based design, and other innovation-driven services that support green and productivity upgrading. 
3. The Implementation Opinions on the Special Action for “AI + Manufacturing”, which promote deeper integration of AI across manufacturing and industrial value chains. 
   For German companies, these developments present both new opportunities and rising competitive pressure. The key question is how to position strategically in China’s next phase of industrial transformation.

In our latest Action Tracker, we provide an overview of the policy developments and outline their practical implications for German businesses:

With the annual Two Sessions taking place this week, advanced manufacturing is set to take center stage in the upcoming Government Work Report. Stay tuned for our in-depth analysis as we break down the key signals and what they mean for German businesses.