Overview

• A survey by the German Chamber of Commerce in China shows business confidence among German firms at its lowest since 2007, with only 32% expecting improvements in 2025.
• Key challenges include weak domestic demand, intense price competition, and growing local protectionism, with initiatives like 'Made in China 2025' favoring domestic companies.
• While 92% of German companies plan to maintain operations in China, only about half intend to increase investments, reflecting cautious optimism about the market's potential.
• German firms are increasingly localizing operations, establishing research and development centers and collaborating with Chinese partners to stay competitive in a rapidly evolving market.
• Geopolitical tensions, including potential U.S.-China trade conflicts under Donald Trump's presidency, are adding to uncertainties for German businesses operating in China.