Business
By expanding investments, German, French companies remain confident in Chinese economy
  ·  2023-06-27  ·   Source: Xinhua News Agency
This photo taken on July 4, 2022 shows a workshop of the Volkswagen Anhui MEB (Modular Electric Drive Matrix) plant under construction in east China's Anhui Province (XINHUA) 

Chinese Premier Li Qiang's trips to leading European economies encouraged business representatives from Germany and France, who noted that the visits boosted their confidence in the Chinese economy and plans to continue investing in China.

The first overseas trip since Li took office was featured with extensive exchanges with German and French community, in addition to meetings with European leaders.

Chinese opportunities 

China's development brings opportunities rather than risks to the world, sending stabilities rather than shocks to the global industrial chain and supply chain, Li told Charles Michel, president of the European Council, in Paris on June 29 on the sidelines of the Summit for a New Global Financing Pact.

"China remains one of the most important markets for Adidas. Adidas is on the way to increasing its investments in China significantly," said Bjorn Gulden, Adidas chief executive officer and global brands chief.

The German sportswear manufacturer invested 100 million euros ($109.1 million) into a high-quality, high-tech and sustainable distribution center in Suzhou, east China's Jiangsu Province, adding the newest plant to its distribution network in China.

German automaker Volkswagen signed late May a contract with the Hefei Economic Development Zone in east China's Anhui Province, announcing an investment of around 1 billion euros ($1.1 billion) to launch a new company in early 2024, which is expected to bring together 2,000 R&D and purchasing specialists.

Also in Suzhou, Germany's Bosch Group broke ground on its R&D and manufacturing site for new energy vehicle core components and automated driving in late March. With a total investment of over 1 billion U.S. dollars, the project is expected to bolster innovation in Jiangsu's automobile industry.

Guillaume Faury, chief executive officer of Airbus, told Xinhua that the European aircraft manufacturer decided to continue to invest in its production facility in China, which will contribute to the company's global ambition of producing 75 A320 series planes a month by 2026.

He said China is a vital strategic partner to Airbus, and its supply chain is an integral part of the world's aviation industry, which has shown remarkable industrial resilience and competitiveness over the past three years.

Decoupling won't work

German Chancellor Olaf Scholz said at his meeting with Li that his country welcomes China's development and prosperity, noting Germany rejects all forms of decoupling and "de-risking" is not "de-sinicization."

On jointly maintaining the security and stability of the global industrial and supply chains, Li expressed admiration for the French government's opposition to bloc confrontations, decoupling as well as severing industrial and supply chains.

It is hoped that Chinese and French entrepreneurs will firmly support economic globalization, take action for open and win-win cooperation, and jointly maintain the stability and resilience of the industrial and supply chains between China and France and between China and Europe, Li said.

German and French entrepreneurs said they are ready to keep investing in China and further tap into the Chinese market, believing China will adhere to opening up.

Airbus strongly supports multilateralism and free trade. As a global company rooted in Europe, Airbus told Xinhua that it advocates win-win cooperation wherever it makes sense.

German businessmen said Germany and China are close partners, and great success has been achieved by deepening the economic and trade cooperation between the two sides.

Eliminating risks means strengthening international cooperation, and decoupling will not work, they said.

Siegfried Russwurm, president of the Federation of German Industries, said decoupling from China is wrong. A so-called decoupling would be unrealistic and harmful. "We need dialogue with China on climate protection and also on trade and investment relations."

The German Electro and Digital Industry Association has advised the country's government against decoupling from China, stressing that the Asian country's market was "of paramount importance" for Europe's largest economy.

If Germany were to decouple itself from China economically, its gross domestic product would drop by 2 percent, according to a recent study compiled by the Austrian Institute for Economic Research on behalf of the Foundation for Family Businesses. The result would be an annual loss of almost 57 billion euros (about $62.2 billion).

High-quality cooperation 

For the future, Li expressed his hope that entrepreneurs from China and Germany could follow the trend and continue to pursue openness, inclusiveness and win-win cooperation and maintain the stability of industrial and supply chains through high-quality and high-level practical cooperation.

German entrepreneurs noted they are willing to improve cooperation with China in coping with climate change, strengthening research and development capabilities, and advancing digital transformation.

CEO of BMW AG Oliver Zipse said the BMW Group has deep and long-standing ties with China. The strong partnership will enable BMW and its Chinese partners to continue to create a win-win situation together as the automotive industry undergoes a massive transformation.

According to Chinese electric carmaker NIO founder William Li, Sino-German cooperation is also very important for the next development of Chinese new energy vehicle companies.

"Chinese and German companies can start an in-depth cooperation in automotive technology and intelligence and use the advantages of both sides to jointly promote the development of the intelligent electric vehicle industry," he said.

According to CEO of L'Oreal China Fabrice Megarbane, "the pace of reform is getting faster, the efficiency of implementation is getting higher, the door of China's opening-up is becoming wider, and the business environment is getting better, making our confidence in the Chinese market stronger."

Data from China's Ministry of Commerce showed new investment from European companies in China rose by 70 percent to $12.1 billion in 2022 when China-EU bilateral trade hit a new high of $847.3 billion.

In a world of turmoil and transformation, the more serious and complex the situation, the more necessary it is to think calmly and grasp certainty amid uncertainties, Li said during his Europe visit, which wrapped up on June 23.

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