The local operations of German companies struggled to meet their targets last year and fewer of them are anticipating profit growth this year as a global economic slowdown is likely to hamper their business, an annual business confidence survey released last week showed.
Only 34.3 percent of the companies achieved or exceeded their targets last year, a five-year low and a significant retreat from 49 percent in 2018 and 57 percent in 2017, according to the survey, which was conducted among 251 firms from Oct. 23 to Dec. 3 last year.
While external factors such as the global economy and cross-strait relations dampened the mood, it is up to the government to address problems such as import restrictions and bureaucracy, and to extend its programs that have had a positive effect on two-thirds of the firms, German Trade Office Taipei Executive Director Axel Limberg said at a news conference in Taipei on Thursday last week.
Most German companies in Taiwan are small or medium-sized enterprises in the machinery equipment, logistics, and sales and marketing sectors.
Many have benefited from the government’s New Southbound Policy, its “five plus two” innovative industries program and the welcome return of overseas Taiwanese businesses, the survey showed.
An overwhelming majority of respondents, 97 percent, said they are content with Taiwan as a business location and 40 percent plan further investment in the next two years, Limberg said.
However, almost 25 percent of the firms said that they are struggling with import restrictions that have had a negative impact on their allocation of resources and have led to higher prices, the survey showed.
The companies consider reduced bureaucracy the most efficient tool to attract more foreign investment, the survey showed.
“Less bureaucracy not only will lead to an increase in efficiency, but also cut paperwork and give foreign companies incentives to invest in Taiwan,” Limberg said, adding that the recognition of internationally accepted European certificates, testing procedures and standards would benefit the German firms.
Only 34.3 percent of the firms expect their turnover to increase this year, while just 31.3 percent are forecasting a growth in profit, down from 50.7 percent and 40.8 percent respectively the previous year, the survey showed.
A vast majority of the firms want the government to build reliable and widely available charging infrastructure for electric vehicles, saying that doing so would help reduce air and noise pollution, thereby enhancing quality of life.
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