Flash Surveys
Our Flash Surveys are conducted among member companies of the German Chamber to capture business sentiment on current topics. These surveys complement our most comprehensive report, the Business Confidence Survey. With a focus on current events, the results of our Flash Surveys are highly relevant for German companies seeking current business intelligence.
Business Confidence & Overcapacities
Published on June 17, 2024
The Flash Survey reveals that although German companies operating in China are increasing their turnover expectations, optimism about the Chinese economy returns only slowly. Investment confidence took a setback with just over half of companies wanting to increase investment. German companies in China are most concerned about price pressure as a result of intense competition, which is magnified by weak demand in China and abroad. They need policymakers to take action towards establishing a level playing field and providing a transparent regulatory environment in China.
Key Findings:
- Optimism in the Chinese economy is slowly returning: 38% expect an improvement in the coming six months, while 16% expect the economy to weaken. 46% of respondents are not anticipating significant changes to China’s economic development in the coming six months compared to the previous six months.
- Business outlook is recovering at a low level: Just 38% of respondents anticipate a worsening situation for their industry compared to 2023, a significant decrease from 52% when asked the same question last year in September. Meanwhile, 29% expect their industry to improve compared to the previous year – a slight increase of 8 percentage points.
- Surging turnover, while profits remain stagnant: 39% of companies project their turnover to increase in 2024 compared to last year. When asked the same question last year, only 13 % were expecting increasing turnover. However, only 25% expect profits to increase by the end of 2024.
- Slim majority plans to keep investing: Only 53% of respondents are planning to increase their investment in China in the coming two years, down from 61% when asked the same question last year. 27% are not planning to invest further while 16% are planning to decrease investment.
- Price pressure dominates other challenges: Price pressure is cited by 61% of respondents as the biggest challenge they are facing at the moment. Weak demand in the Chinese market was also identified as a significant concern for 51% of respondents, while geopolitical tensions came in third with 37%.
- Majority observes overcapacities: 75% of German companies see overcapacities in their industry (little: 19%, medium: 36%, substantial: 20%). Nearly all (96%) of these companies state that overcapacities are affecting their business (slightly affected: 44%, strongly affected 49%, very strongly affected 3%). 49% indicate that they started observing overcapacities since last year (this year: 7%, 5 years ago: 35%, 10 years ago: 4%).
- Fair competitive environment must be a priority: 47% of respondents say that equal treatment of foreign and domestic companies should be addressed by the German government, followed by advocating for a more transparent regulatory environment (29%) and deepening cooperation formats in the area of green transformation (24%).
Download the press release (English)
Download the press release (German)
Competitiveness of German Companies in China
Published on April 10, 2024
Chinese and German companies are increasingly becoming close competitors - both in China itself and in global markets. This is the reality that German companies must prepare for. They strengthen their competitiveness through increased investment in their China business and cooperation with partners and customers. The sluggish development of the Chinese economy coupled with the emergence of local competitors has made the issue of unfair competition in China more pronounced. The German Chamber of Commerce in China has launched a survey among its member companies to establish the status quo of the competitiveness of German companies in China. The German Chamber is strongly advocating for fair competition conditions with the Chinese government. Especially against the background of increased entry of Chinese providers into the European market, a level playing field must be implemented.
Key findings:
- Two-thirds of the surveyed companies say they are affected by unfair competition.
- German companies consider themselves superior to their Chinese competitors in terms of product quality, technological leadership, and innovation strength.
- They rate their cost efficiency, time to market readiness, and innovation speed as weakest compared to Chinese competition.
- Competitive disadvantages are particularly seen in market access and access to networks (e.g., government, local authorities, access to public tenders, etc.).
- The heightened competition is expected to cause increased cost pressures, reduced profit margins, and lower market shares.
Download the advocacy paper in English
Download the advocacy paper in Chinese
Download the results in English
Flash Survey Cross-border Data Transfer Compliance
Published on February 21, 2024
Cross-border data transfer and data security regulations is a hot topic for our member companies. To gain a deeper understanding of the status and challenges in the compliance efforts, we recently conducted the flash survey “Cross-border Data Transfer Compliance”.
Key findings:
Several challenges lead to relatively slow progress of compliance:
Only 8% of companies which applied passed the review. 38 % of the survey respondent don't think that the law applies to them and more than 20% plan to fulfill their reporting obligations after the release of the “Draft Regulation" by the Cyberspace Administration of China.
Multiple application creates heavy workload for German companies:
Given that there is no restriction for each company choosing only one method of application, 42% try to make multiple compliance applications using several items.
Low transparency is the main challenge during the application process:
Half of the companies surveyed who applied see unclear regulatory requirements and the inability to keep up to date with the application progress as major concerns.
Multiple internal and external factors complicate data processing:
Vague definitions of important data (54%), unclear amount of data (50%) and heavy workload (50%) are the biggest challenges during the data processing for German companies.
Many companies are still in a wait-and-see-mode:
Two thirds of the companies that plan but have not yet started to apply think that they do not fall under the scope of the regulation and 56% wait for the release of the important data catalogue.
Companies suffer from heavy costs:
85 % of surveyed companies have already made some investment. The biggest impact of compliance with cross-border data transfer are additional compliance costs (70%) and increased communication costs & risks for communication with headquarters (57%).
Flash Survey: Business Outlook Restrained by Market Development & Geopolitics
Published on June 8, 2023
The results of a Flash Survey which indicate that German companies' business sentiment towards China post-COVID is not as optimistic as initially hoped. The slower-than-expected market development, as well as ongoing geopolitical tensions, have dashed hopes for a quick improvement in the business environment. Jens Hildebrandt, Executive Director & Board Member of the German Chamber of Commerce in China - North China summarizes: “Geopolitics have a profound impact on companies on the ground, prompting them to drive forward localization and diversification strategies as risk management measures”. He adds: “German companies will sustain investments in the Chinese market as a means of remaining competitive and leveraging its potential”.
German Companies’ Production Resumption Hampered & COVID-Strategy Prompts Foreign Employees to Leave China
Published on May 12, 2022
Several months into the recent round of anti-pandemic measures, only a small number of German companies can operate and resume production in China. Foreign employees are increasingly planning to leave the country due to China’s strict COVID-strategy. In areas affected by lockdowns, companies can only restart their operations under constraints. Currently, 19% of the surveyed German companies have permits to produce under adverse conditions in such areas. Of those allowed to run operations under lockdown, many only operate at less than half of their full production capacity. Logistics problems, low availability of staff and uncertainty caused by sudden changes in policies are the main reasons for hampering the increase of production capacity.