A survey by the Federal Association of German Industries (BDI) in September last year showed that China would be the favorite in the eyes of German manufacturers in the next 5 to 10 years which were seeking for potential new revenue sources and lower costs on the overseas market to improve their competitiveness.

The Deutsche Bank conducted an investigation to the top 30 German major enterprises on DAX at the same time as the BDI. The result indicated that their investment on the Chinese mainland market would exceed 10 billion euro by 2010.

Another survey published by Roland Berger, a Germany-based consultancy with global operation, and RWTH Aachen in August last year told us that 90 percent of German machinery equipment manufacturers had plan to relocate some of their production facilities out of Germany, most likely in China and East Europe.

Also in September last year Ernst & Young reported its findings of investment interest of 200 German auto parts makers. It says 75 percent of them will build plants in China in the next 10 to 15 years.

However, German businesses only put 1.2 percent of their overseas investment in China, which is one-fifth of American or Japanese capital inflow into China and even lags far behind South Korean.

Most of the German investors in China are industrial giants. It is expected that by 2006 the six leading German companies, Siemens, Volkswagen, Bayer, BASF, ThyssenKrupp and Infineon, will input 7.9 billion euro into their China strategy. It is estimated that German investment on mega-projects in China will slow down.

But small and medium sized German companies which make the pillar of German economy are showing great potential of catching up.

Source:People's Daily