China creating ‘unfair competition’ for foreign players, German firms say in survey

Name: ‘Overtaking on a bend’: how China’s EV industry charged ahead to dominate the global market
Uploaded: 2024-04-10T09:01:24.000Z
Duration: 12 min 53 s
Description: ‘Overtaking on a bend’: how China’s EV industry charged ahead to dominate the global market

A survey released by the German Chamber of Commerce in China has found a two-thirds majority of businesses believes it faces ‘unfair competition’

Lack of market access and other disadvantages could depress enthusiasm, weighing down an already fraught trade relationship in run-up to chancellor’s visit

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Discontent expressed by German businesses in China shows the tensions inherent in a relationship characterised by high levels of trade as well as fierce competition. Photo: EPA-EFE

Kinling Loin Beijing

Published: 5:01pm, 10 Apr 2024Updated: 6:44pm, 10 Apr 2024

German businesses in China have reiterated their calls for a level playing field, with two-thirds of those surveyed seeing themselves in “unfair competition” when operating there – findings which add to pressures on Beijing from foreign investors over persistent struggles related to market access and overcapacity.

The survey, conducted by the German Chamber of Commerce in China, was released ahead of German Chancellor Olaf Scholz’s visit to China next week. It comes at a time when the two countries have continued to stress the importance of economic ties, despite Berlin’s overtures towards de-risking and complaints from the West over the Chinese state subsidies it has claimed create an overcapacity of industrial products.

“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,” said the report, released on Wednesday afternoon.

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‘Overtaking on a bend’: how China’s EV industry charged ahead to dominate the global market

“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.”

Two-thirds of the 150 companies surveyed from February 22 to March 6 said they face “unfair competition” operating in China, Germany’s largest trading partner, reflecting the latest difficulties perceived by foreign businesses in the country – a topic likely to take precedence in the German leader’s meetings next week.

The German businesses surveyed – 29 per cent from the manufacturing sector and 20 per cent from carmakers – said they are most confident in their product quality, technological leadership and strength in innovation compared to Chinese competitors. However, they see weaknesses in cost efficiency, time to market readiness, and innovation speed when measured against local firms.

Market access – particularly access to lucrative networks like government authorities, universities, and public tenderers – were seen by respondents as the most pressing competitive disadvantages.