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As
Geopolitical tensions between
The bottom line: German companies remain focused on a growing Chinese market. A whopping 71 percent of companies plan to expand their investments in
Volkswagen , with more than 40 factories inChina , announced additional efforts to satisfy the Chinese consumer market. So writes .-
The company plans billions in investments in local partnerships and production sites. This falls within the theme the automaker announced last year, "In
China forChina .
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The company plans billions in investments in local partnerships and production sites. This falls within the theme the automaker announced last year, "In
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Another German giant, chemical giant
BASF , with 30 plants inChina , is taking flight ahead.BASF will invest some$10.9 billion by 2030 in a new chemical production complex that will be the same size as its Ludwigshafen headquarters (about 25.74 km² in area). This is the chemical giant's largest investment inChina to date.
Continuing to invest
Underlying: German business leaders are aware that their plans run directly counter to
BASF CEOMartin Brudermüller defends choosingChina because it compensates forEurope's high energy costs and strict environmental regulations. "WithoutChina , the necessary restructuring inEurope would not be possible," he explained.- Just last year, German companies pumped record amounts of investment into
China in the first half of 2022. Tens of billions of euros were awarded to projects all overChina in various fields.
Scholz's new
Notable: After a difficult year in 2020 during the lockdowns of the corona pandemic, German companies in
- However, German
Chancellor Olaf Scholz announced a change of course towardChina . Just he Chinese PresidentXi Jinping and also discussed further bilateral economic cooperation there. Scholz is now much more critical of trade ties. Germany still remembers how dependent it was onRussia during the energy crisis.China is currentlyGermany's most important trading partner for seven years in a row and the latter does not want to experience the same scenario again where it becomes too dependent on trade with one country.- Certain key products such as smartphones, LEDs and rare raw materials such as lithium are essential for German industry and for climate goals. For that,
Germany still leans too much onChina .
- Scholz therefore wants companies to strategically diversify trade ties in
Asia .
- Certain key products such as smartphones, LEDs and rare raw materials such as lithium are essential for German industry and for climate goals. For that,
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Research showed that as many as 96 percent of German companies in
China plan to maintain a presence there and plan expansions over the next two years.
(fjc)
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