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Growing uncertainty: How German companies are dealing with the increasing risk in business with China.
According to a report by amp2.handelsblatt.com, a survey by auditing and consulting firm PwC shows that German companies in China are facing growing uncertainty in the business environment. 88 percent of those surveyed continue to see China as an important economic partner, but awareness of the need for risk management within their own company is growing. The German foreign trade deficit with China was around 84 billion euros in 2022, which shows that the dependence on China in the German economy has increased significantly. Despite the increasing uncertainty, only a very small minority of one percent plan to withdraw from China. Many companies are forced to reduce their production and...
Growing uncertainty: How German companies are dealing with the increasing risk in business with China.
According to a report by amp2.handelsblatt.com, a survey by auditing and consulting firm PwC shows that German companies in China are facing growing uncertainty in the business environment. 88 percent of those surveyed continue to see China as an important economic partner, but awareness of the need for risk management within their own company is growing.
The German foreign trade deficit with China was around 84 billion euros in 2022, which shows that the dependence on China in the German economy has increased significantly. Despite the increasing uncertainty, only a very small minority of one percent plan to withdraw from China.
Many companies are forced to adapt their production and business strategies to geopolitical developments. Some German companies, such as Hella, Adidas, Bosch and EBM-Papst, are increasingly relying on localization and diversification to minimize risks. This means that more development and production is being carried out in the regions for the regions in order to be able to react more flexibly to market fluctuations.
The uncertainty in dealing with China is also due to political conflicts, such as Beijing's stance in the Ukraine war and the Middle East conflict. According to the PwC survey, companies see the greatest challenge in the unpredictable geopolitical developments. Nevertheless, only 29 percent of companies have formulated a China strategy, which shows that many companies are still hesitant to take concrete measures to minimize risks.
Given these facts, it appears that German companies must increasingly prepare for the challenges of dealing with China. Geopolitical uncertainty and increasing dependence on China require long-term adjustment of business strategies and increased flexibility to minimize risks. It remains exciting to see how companies will react to the changing situation in the future.
Read the source article at amp2.handelsblatt.com