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Mechanical engineering in China: forecasts for 2023 only with a maximum of 3 percent growth
According to a report by RND.de, German mechanical engineering is increasingly suffering from the current situation in China. VDMA President Karl Haeusgen had expected double-digit growth at the beginning of the year, but the forecasts have now darkened significantly. Haeusgen only expects a maximum growth of 3 percent for 2023. This is due, among other things, to the sluggish economic recovery, geopolitical risks and a nationalistic market climate in China. The Chinese government under Xi Jinping is pursuing a “nationalizing industrial policy,” in which domestic state-owned companies in particular are promoted in order to drive out foreign competition. This is already having an impact on the…
Mechanical engineering in China: forecasts for 2023 only with a maximum of 3 percent growth
According to a report by RND.de, German mechanical engineering is increasingly suffering from the current situation in China. VDMA President Karl Haeusgen had expected double-digit growth at the beginning of the year, but the forecasts have now darkened significantly. Haeusgen only expects a maximum growth of 3 percent for 2023. This is due, among other things, to the sluggish economic recovery, geopolitical risks and a nationalistic market climate in China.
The Chinese government under Xi Jinping is pursuing a “nationalizing industrial policy,” in which domestic state-owned companies in particular are promoted in order to drive out foreign competition. This is already having an impact on the German car industry, which has become less important as a result of the transport transition. This development is also becoming increasingly problematic for German mechanical engineering.
According to a current VDMA member survey, over half of the mechanical engineering companies surveyed stated that the attractiveness of China as a location has deteriorated. In addition, China has now been displaced as an investment location by the USA and India. 45 percent of the companies surveyed plan to adjust their China strategy due to geopolitical risks and the weak economic situation.
These developments have a direct impact on German mechanical engineering and could also influence the German market in the long term. It is to be expected that German companies will invest more in other countries such as the USA or India in order to counteract the negative influences in China. In addition, the trade balance between Germany and China could deteriorate further as German companies find it difficult to assert themselves against China's protectionist policies.
Source: According to a report by RND.de, URL: https://www.rnd.de/politik/deutsche-ingenieure-in-china-maschinenbauer-leiden-unter-xi-jinpings-wirtschaftspolitik-AFSMENXUXVFILG55YWDCCSTB4I.html?outputType=valid_amp
Read the source article at www.rnd.de