AHK Policy Barometer
The Government Affairs & Advocacy team creates the quarterly Policy Barometer, which provides updates on current economic policies. It highlights the status quo of relevant policies, such as the State Council's 24-point-paper and cross-border data transfer, while also offering AHK Greater China's perspective. The Policy Barometer also outlines essential tools and additional resources that German companies should be aware of and provides updates on AHK Greater China's advocacy efforts regarding China's economic policies. The Policy Barometer is shared via email with members of the German Chamber of Commerce in China.
AHK Policy Barometer
The Policy Barometer gives quarterly updates on current economic policy topics. It checks in with the sentiment of German companies, shares AHK's perspective on it, highlights our advocacy efforts with the German and Chinese governments and introduces our practical tools.
AHK Greater China Policy Barometer vol. 4/2023
Read our quarterly Policy Barometer for insights on how German companies deal with economic policy issues and discover practical tools. This is a shortened version; members receive the full version via email.
Central Economic Work Conference
Status Quo: The annual central economic work conference just took place this week. This conference sets guidelines for the direction of the government’s economic work in the coming year. In 2024, as compared to 2023, technological progress will be prioritized over domestic consumption and progress over stability.
Pulse Check: Strengthening domestic consumption tops the wishlist of German companies towards the Chinese government. While consumption is still high on the agenda, the focus is even more on strengthening China’s technological edge. In an ever more competitive environment with stronger support for domestic technology companies, a level playing field becomes even more important for foreign companies operating in the Chinese market.
24-Points Policy Check-up
Status Quo: In August, the State Council released the 24-points policy for foreign investment. Since then, we have seen some action from different ministries and administrations, such as a document on unequal treatment, an extension of the IIT allowance for foreigners, exceptions on cross-border data transfer management (draft), Q&As on standardization and more.
Pulse Check: The documents released after the 24-points policy has been well received by quite some companies, especially the rather specific examples in the unequal treatment document and the cross-border data transfer management draft. However, companies remain sceptical about real outcomes.
Status Quo: The first in-person high level meeting since 2019 took place in the year of the 20th anniversary of the comprehensive strategic partnership between China and the EU. Beijing appears not to have deviated from this standpoint while the EU refers to the three-fold concept of partner, competitor, and systematic rival, and emphasizes “De-risking”.
Pulse Check: Mainly in response to geopolitical tensions, approximately 50% of companies have taken steps to mitigate their risk associated with their China business. Building up China independent supply chains serving different markets and additional operations in other countries are one of the main “De-risking” strategies.
Cross-Border Data Transfer
Status Quo: CAC has opened a public consultation on the regulations for standardizing and promoting cross-border data transfer which ended on October 15. The draft regulation proposes further clarifications and refinements of the existing policies on cross-border data transfer, e.g. the exemptions regarding the transfer of HR data, more information about the usage of the term “important data”.
Pulse Check: German companies still encounter uncertainties in cross-border data transfer as the final draft is not released yet. As a result, some companies have filed too many data while others are left uncertain on how to proceed.
Supply Chain Law
Status Quo: On January 1st, 2024, the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG) will come into full force. From then on, also companies with more than 1,000 employees in Germany need to fulfil due diligence obligations. On EU-level, the ‘trialogue negotiations’ between the EU Parliament, the Member States and the Commission are continuing. Originally it was planned to finish the negotiations in 2023. After it comes into force, member states have two years to implement the directive into national law.
Pulse Check: More than one third of German companies still face challenges when implementing the law. Often there are unclarities of the requirements coming from the Headquarters or challenges with on-site checkups at suppliers.