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The business climate surveys by the German Chambers of Industry and Commerce (AHK) are a fixed date in the annual calendar of business in China. The German association is usually a bit more optimistic here than the EU chamber. Moreover, their demands are typically not quite as sharp. This year, however, it seems to be the other way around. While the EU Chamber still seemed remarkably positive last summer, the AHK has taken a turn into skeptical waters.
While companies continue to have a positive outlook, they show signs of exhaustion caused by the myriad of new problems on the market, analyzes Christiane Kuehl. At the top of the list of concerns are the entry barriers caused by Covid. However, those who share the hopes of the AHK that regulations will soon be lifted will most likely end up disappointed.
Another disappointment could also await in nuclear fusion research. It is true that China is catching up quickly in the hot race for the even hotter energy source thanks to exuberant funding and close scientific exchange with Europe, writes Nico Beckert. But neither Europe nor China can predict when nuclear fusion will actually produce electricity. After all, nuclear fusion is a technology whose marketability always seems to be quite some way off in the future. Nevertheless, the billions spent on research are a worthwhile investment. If nuclear fusion succeeds in the end, it will provide us with an abundance of emission-free power.
Chamber survey: euphoria fades into realism
How do you positively present waning optimism? With a hybrid statement: “Business outlook positive – unequal treatment and localization challenge German companies in China” That’s the headline of this year’s business confidence survey of German companies operating in China by the German Chambers of Commerce Abroad (AHK Greater China). “Realism replaced strong positivity,” the survey says. Euphoria is waning, but most companies generally expect business to remain positive. 96 percent want to stay in China, 71 percent want to invest more. On Tuesday, the AHK presented the survey data in Beijing.
But companies seem exhausted – by Covid restrictions, the politicization of business environments, and decoupling tendencies, especially between China and the US. “Companies are already reconsidering their business activities,” said Andreas Glunz, Managing Partner of KPMG, which organized and evaluated the survey in cooperation with AHK Greater China. A year ago, Glunz had still stated that optimism was as high as during the boom year 2018. This is in the past now.
But first, let’s look at business expectations: 60 percent of the companies surveyed expect revenue to increase in 2022, and 41 percent also expect more profit. This is only slightly less than in 2021 when 63 percent expected higher revenue and 48 percent more profit. At 10 and 17 percent respectively, even fewer companies expect revenue or profits to fall than in 2021 (then 14 and 22 percent). And 51 percent expect the situation in their sector to improve – down from 66 percent a year ago.
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