German companies doing business in China are disappointed with the outcome of last week’s closely watched Communist Party meeting on long-term reforms of the world’s second-largest economy, a senior industry official said on Monday.
The companies had “hoped for more guidance and more specific information” when it comes to economic stimulus measures, said Maximilian Butek, the chief representative of the German Industry and Trade delegation in Shanghai.
Butek said the plans made public at the Third Plenum of the 20th Central Committee of the Communist Party were of “continuity.”
German companies in China must continue to prove their staying power, he said, predicting that market conditions “are unlikely to improve in the near future.”
In addition to high competitive pressure, low confidence in an often opaque market and cautious investment by the private sector are also causing problems for German companies in China.
Hopes for greater market liberalization and equal treatment of foreign and domestic companies were also dashed in the final communiqué issued at the end of the meeting, which is normally held every five years. This year’s meeting came as China’s economy struggles with a recession.
Chinese leaders need more economic growth and know there is no other way than to open up their markets, but this clashes with Beijing’s desire to have firm control over large parts of the economy, Butek said.
“The Third Plenum did not help to resolve this contradiction, but rather aggravated it,” Butek said.
German companies have long complained in China about unfair competition conditions and more difficult market access.
Against this backdrop, trade tensions are growing. Berlin accuses China of state-sponsored overcapacity in sectors such as battery production and solar, producing more than demand allows and then flooding the global market. Beijing denies this.
According to the German statistics office Destatis, China was Germany’s most important trading partner for the eighth year in a row in 2023.
