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German investment to rise in China, Shanghai losing its lure
By Wang Yanlin |
September 30, 2011, Friday
|
Online Edition
Online Edition
MOST German companies in China plan to increase their investment in the country through 2015, but Shanghai is losing its position as the most preferred city for German investment, a survey showed today.
The majority, or 77 percent, of respondents said they would raise investment in China in the years to 2015, the Business Confidence Survey 2011 showed.
The survey, conducted by the German Chamber of Commerce in China, was based on opinions solicited from 188 German companies.
"Better performance in the past year and huge market potential trigger German companies to raise investment in China," said Titus von dem Bongart, board chairman of the chamber in Shanghai. "China is one of the top three priority destinations for new German investment, and many are optimistic about their outlook in China."
The survey showed nearly 50 percent of respondents anticipated an annual growth of more than 11 percent in the next five years, while another 40 percent estimated growth to move between 6 percent and 10 percent.
However, Shanghai seems to be losing its charm for German investors. It is listed as the sixth most preferred city, behind Beijing, Guangzhou, Chengdu (Sichuan Province), Xi'an (Shaanxi Province) and Wuhan (Hubei Province).
"The new emphasis on exploring second-tier cities may explain the lower ranking of Shanghai," Bongart said. "Rising labor costs in big cities also drive many German manufacturers to move into central and western China."
Jan Noether, managing director of the chamber in Shanghai, added that because Shanghai was already the biggest base for German companies in China, investors were more likely to consider other cities.
Shanghai hosts 1,600 German company headquarters, one third of the total in China.
While German companies were eager to expand their presence in China, whether they could find and retain qualified staff was their biggest concern, together with the rising labor costs and currency risks, the survey showed.
Also, German companies increasingly feel competitive pressure from their Chinese rivals.
The majority, or 77 percent, of respondents said they would raise investment in China in the years to 2015, the Business Confidence Survey 2011 showed.
The survey, conducted by the German Chamber of Commerce in China, was based on opinions solicited from 188 German companies.
"Better performance in the past year and huge market potential trigger German companies to raise investment in China," said Titus von dem Bongart, board chairman of the chamber in Shanghai. "China is one of the top three priority destinations for new German investment, and many are optimistic about their outlook in China."
The survey showed nearly 50 percent of respondents anticipated an annual growth of more than 11 percent in the next five years, while another 40 percent estimated growth to move between 6 percent and 10 percent.
However, Shanghai seems to be losing its charm for German investors. It is listed as the sixth most preferred city, behind Beijing, Guangzhou, Chengdu (Sichuan Province), Xi'an (Shaanxi Province) and Wuhan (Hubei Province).
"The new emphasis on exploring second-tier cities may explain the lower ranking of Shanghai," Bongart said. "Rising labor costs in big cities also drive many German manufacturers to move into central and western China."
Jan Noether, managing director of the chamber in Shanghai, added that because Shanghai was already the biggest base for German companies in China, investors were more likely to consider other cities.
Shanghai hosts 1,600 German company headquarters, one third of the total in China.
While German companies were eager to expand their presence in China, whether they could find and retain qualified staff was their biggest concern, together with the rising labor costs and currency risks, the survey showed.
Also, German companies increasingly feel competitive pressure from their Chinese rivals.
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