Nearly one-quarter of German companies operating in China are planning to relocate all or part of their business out of the country, according to a study released yesterday, with many blaming rising costs.
The German Chamber of Commerce’s annual survey of 526 member firms in China found that 23 percent have either already decided to withdraw production capacity in the country or are considering it.
One-third of those companies have planned to leave China entirely.
The rest would transfer part of their business and production overseas, largely to lower-cost countries such as India or in Southeast Asia.
Operating costs in China have been rising as the country seeks to rebalance its economy from an export and investment-led model to one driven by consumer spending.
Of the 104 companies that have decided to leave or are considering to, 71 percent cited the rise in production costs — particularly for labor. One-third blamed an unfavorable public policy environment and one in four said the China-US trade dispute is having an impact.
“Business expectations have dropped to their lowest level in years,” the study warned, with only a quarter of companies surveyed expecting to meet or exceed their goals this year.
More than one-third said Beijing’s efforts to “level the playing field” for foreign companies are “insufficient.”
“Competition has to be fair,” German Ambassador Clemens von Goetze said at the launch of the study. “Foreign companies, including German companies, and Chinese companies should play on a level field.”
Von Goetze also said German companies had been “not so well informed” about China’s huge Belt and Road Initiative — a US$1 trillion global investment drive — and said they had not been able to benefit from the economic potential of the project.
Beijing’s initiative “is mainly Chinese-financed and implemented by Chinese companies,” the ambassador said.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
It is challenging to build infrastructure in much of Europe. Constrained budgets and polarized politics tend to undermine long-term projects, forcing officials to react to emergencies rather than plan for the future. Not in Austria. Today, the country is to officially open its Koralmbahn tunnel, the 5.9 billion euro (US$6.9 billion) centerpiece of a groundbreaking new railway that will eventually run from Poland’s Baltic coast to the Adriatic Sea, transforming travel within Austria and positioning the Alpine nation at the forefront of logistics in Europe. “It is Austria’s biggest socio-economic experiment in over a century,” said Eric Kirschner, an economist at Graz-based Joanneum
France is developing domestic production of electric vehicle (EV) batteries with an eye on industrial independence, but Asian experts are proving key in launching operations. In the Verkor factory outside the northern city of Dunkirk, which was inaugurated on Thursday, foreign specialists, notably from South Korea and Malaysia, are training the local staff. Verkor is the third battery gigafactory to open in northern France in a region that has become known as “Battery Valley.” At the Automotive Energy Supply Corp (AESC) factory near the city of Douai, where production has been under way for several months, Chinese engineers and technicians supervise French recruits. “They
RSS