German Firms in China Report Rising Morale and Investments Despite Uncertainty
Business Sentiment and Investment Trends Among German Companies in China
Improved Outlook and Economic Expectations
BEIJING, May 12 (Reuters) - Business sentiment among German firms in China has improved compared to a year ago, a German business lobby group said on Tuesday, with companies planning more investments in the region despite uncertainty surrounding the war in Iran and trade.
According to a survey of 216 companies by the German Chamber of Commerce in China, 37% of respondents foresee an improvement in China's economy over the next six months, 22 percentage points higher than last year, while only 17% anticipate a deterioration - a sharp drop from 56% in 2025.
Investment Plans and Trends
Increasing Investments
Almost two thirds (61%) plan to increase investments in China within the next two years, up from 53% a year ago and marking the highest level since 2023.
Decreasing Investments
Some 11% plan to reduce investments, three percentage points lower than in 2025.
External Factors Impacting Business
Impact of the Iran War
Three quarters of the firms reported an impact on their business from the Iran war, mainly due to rising logistics costs.
Trade Tensions
U.S.–China Tensions
Trade tensions are also affecting companies' operations, with over two thirds (69%) reporting a hit from U.S.–China tensions and over half (59%) being impacted by EU–China tensions.
Financial Performance and Industry Outlook
Turnover and Profit Expectations
Despite this, 42% of surveyed firms expect their turnover to rise by year-end, compared to 29% in 2025, while 29% anticipate higher profits, a rise of 11 percentage points from last year.
Industry Development Expectations
A third (34%) expect an improvement in their industry's development, while another third (33%) expect conditions to worsen.
(Reporting by Christian Kraemer, writing by Linda Pasquini, editing by Friederike Heine)
