China as A Growing Strategic Market for German Business

German Companies view China as a more strategically important market， despite their concerns over China’s regulatory environment， according to a report from the German Chamber of Commerce in China.German Companies in China have seen improvements in their financial results upon pre-2008 economic crisis and are optimistic about their further growth.For German business， the importance of China’s market has increased. Over the last two years， the number of German companies in China registered with the German Chamber Network has grown by about 700 totaling up to currently roughly 4，300 across Greater China.In 2010， China became the biggest target for German foreign investment according to a study released by the Association of German Chambers of Industry and Commerce (DIHK). 85 percent of these companies invest in China with the goal to develop in the market and expand sales.“Business requests reaching us here in Greater China significantly shifted from production related topics to requests focusing on China as a sales market. Also requests for qualified personnel went up steeply，” said Alexandra Voss， Delegate Chief Representative of German Industry Commerce in Beijing.Though German companies have more expectations for their future performance in China， they find themselves in a more competitive environment， facing increased competition from both international and Chinese competitors.China’s booming economy and its focus on promoting its domestic market make it an attractive investment destination for foreign and local companies alike. This is leading to increased competition across industries and markets in China.Meanwhile， Chinese companies are catching up with their foreign competitors， improving in brand recognition， marketing and sales capabilities， and product quality.Although the growing Chinese competition constitutes a visible challenge to German business， the ambitious goals of the recently released 12th Five Year Plan can hardly be reached without foreign expertise.The rising demand for high technology and the promotion of green industry solutions are key components of Chinas economic future. German companies with their traditionally strong portfolio in these sectors are most likely to profit from this.Various projects have been conducted jointly by the German Chamber Network in Greater China with the Chinese government， in order to promote a sustainable economic development while making use of German experience and expertise.While， compared with last year， German companies have more concerns over a perceived unfair playing field and regulatory environment. This raises questions about China’s claim to be an equal opportunity market and the attractiveness of China in the longer term as a place to do business for some companies.The Transparent definition and subsequent implementation of regulations is one of the main concerns for German companies at present. In close cooperation with the European Chamber and other National Chambers of Commerce， the German Chamber Network is in continuous and consistent dialogue with the Chinese government on these concerns.The Sino-German talks on Economic and Technical Cooperation in July this year will also offer an opportunity to address present regulatory issues of German companies in China.