Overseas companies view Germany more negatively than they did five years ago, and Chinese companies give bad reviews.
According to Germany's Handelsblatt on the 15th, the Overseas Chamber of Commerce (AHK) and the Germany Chamber of Commerce and Industry (DIHK) recently conducted a questionnaire survey on Germany's image in the eyes of overseas enterprises, and the interviewees were German enterprises and international enterprises located outside Germany. The results show that the impression of Germany by overseas companies has declined.
Forty-eight percent of respondents believe that the economic environment in Germany has "deteriorated" or "seriously deteriorated" over the past five years. 60% of companies rated Germany as a business location as medium or poor. A quarter of the companies surveyed even advised not to invest in Germany.
Chinese companies have given a "bad evaluation" of Germany, believing that Germany's attractiveness to enterprises has been greatly reduced. Fifty-six percent of Chinese companies surveyed said that Germany's image had "deteriorated" in the past five years, and another 20 percent even said that Germany's image had "deteriorated significantly".
Of the 1,250 companies participating in the survey, 53 percent were subsidiaries or branches of German companies abroad, and 47 percent were foreign companies with strong ties to Germany, some of which had branches in Germany. The survey will be conducted from the end of August to mid-September 2024.
The results of the survey have sparked a discussion about the investment climate in Germany. According to the surveyed companies, the most important thing to improve in Germany as an investment location is to reduce bureaucracy (Abbau von Bürokratie), followed by a better "welcoming culture" (Willkommenskultur) (cultural inclusion) for foreign companies and their employees, as well as more reliable policy planning.
Volker Treier, head of foreign economic affairs at the Germany Chamber of Commerce and Industry, saw ·the findings as a "clear warning sign". "It's time for the Germany government to refocus on our economic environment and investment attractiveness," Terrell said. ”
Similar concerns have already been expressed by other business people. Hildegard Müller, president of the Association ·of the Automobile Industry, recently said that the Germany business environment is no longer internationally competitive. "We are suffering from high electricity prices, and the government must address the root causes as soon as possible."
Foreign investment has decreased
In recent years, the amount of direct investment by foreign companies in Germany has decreased. According to an analysis by Ernst & Young, the number of investment projects announced by foreign companies in Germany in 2023 fell by 12% compared to the previous year to 733, the lowest level since 2013. This is also the sixth consecutive year that the number of new projects has been declining.
Data from Germany's Mercator Institute for China Research (MERICS) and analyst firm Rhodium Group show that Chinese investment in Europe fell to its lowest level in 13 years in 2023. Direct investment in Europe from China decreased from €7.1 billion in 2022 to €6.8 billion in 2023.
This trend may be related to the tightening of investment regulations by the Germany government and the European Commission. "For security reasons, when Chinese companies want to buy Germany companies, they are now more scrutinized," the report said. China has been massively building up its military power for years, and in the process has also taken advantage of technology from abroad. ”
In contrast, companies from Africa, the Middle East and South and Central America have a more positive view of the business environment in Germany. According to the AHK survey, 52% of companies surveyed in Africa and the Middle East said that the economic environment in Germany had "improved" or even "significantly improved" in the past five years; Forty percent of South and Central American companies share the same view.
On October 9, the Federal Ministry of Economics of Germany revised its economic forecast for the current year. According to this forecast, Germany's GDP will shrink by 0.2% this year, a sharp downward revision from the previous spring forecast of 0.3%.