Editorial: German companies’ choice is a silent opposition to “pan-politicization”
2024-08-15
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"German companies are investing more in China than ever before." According to foreign media reports, German companies, especially automakers, have significantly increased their direct investment in China this year, with the total amount reaching 7.3 billion euros in the first half of the year. Some of these reports deliberately exaggerated the current "China-EU trade tensions" and the so-called "de-risking" background in order to highlight the "heresy" of German companies. Some French media even bluntly said that German companies "seemed to be suffering from Stockholm syndrome."
German companies have made money in China and are optimistic about the prospects of the Chinese market, so they choose to increase their investment in China. Isn't this a normal business behavior? The "2023/24 Business Confidence Survey Report" previously released by the German Chamber of Commerce in China shows that 91% of the German companies surveyed said they would continue to take root in the Chinese market, and more than half of the German companies surveyed plan to increase their investment in China in the next two years. However, some European media are so shocked by this situation that they even use the "Stockholm syndrome" to describe the pathological dependence of hostages on kidnappers to describe the relationship between German companies and the Chinese market. This is incredible and makes people ask, why are they so sensitive and nervous about German companies investing in China?
It is very likely that those who want to prove that the "de-risking" strategy is correct and those who try to hype "foreign capital leaving China" are anxious and afraid to see their own mistakes. In fact, the attempt to kidnap capital flows through non-market means such as punitive tariffs and "decoupling and chain breaking" is the "Stockholm syndrome" that makes the obsessed people fall in love with the kidnapper theory. However, "pan-politicization" and "pan-security" are obviously unpopular batons in the international investment market. Companies make decisions from the perspective of cost-benefit, which is actually a silent opposition to this. Now, seeing that the promotion of "decoupling" between German companies and China in the name of "de-risking" has no effect, they have set their sights on German companies' investment in China, and are also thinking of using political and public opinion means to trip up German companies' investment in China.
"The fish in the water know best whether the water quality is good or not." I'm afraid that the German companies that have made their choices with real money have the most say in how the Chinese market is. More than 500 German companies have settled in Taicang, Volkswagen has invested 2.5 billion euros to expand its production and innovation center in Hefei, BMW has also invested 2.5 billion euros to expand its Shenyang factory, and the first German Center of the German Federal Federation of Small and Medium Enterprises has been opened in Shenyang. These are all votes of trust and confidence in the comprehensive assessment of China's overall business environment, infrastructure, and industrial chain foundation. For German companies, it is not easy to find a market with stable growth and broad prospects like China around the world.
This trust and confidence is also reflected in the long-term strategic deployment of investment in China. In recent years, a considerable part of Germany's investment in China comes from the fact that German companies have added the profits they have earned in China to their enterprises in China. On the one hand, this shows that German companies have indeed reaped rich benefits from the Chinese market. On the other hand, it also shows that German companies are optimistic about China not only today, but also tomorrow. The Global Foreign Direct Investment Confidence Index (FDICI) report for 2024 released by Kearney, a world-renowned management consulting firm, shows that China has jumped from the seventh place last year to the third place, ranking first in the special ranking of emerging markets. In the first half of the year, nearly 27,000 new foreign-invested enterprises were established nationwide, a year-on-year increase of 14.2%.
As the business environment continues to improve and market opportunities continue to increase, China's use of foreign capital will continue to expand. The Third Plenary Session of the 20th CPC Central Committee made important arrangements for promoting high-level opening up and expanding the use of foreign capital. First, steadily expand institutional opening up; second, further relax market access; third, effectively guarantee the national treatment and legitimate rights and interests of foreign-funded enterprises. China's high-quality development, especially the full opening up of manufacturing and service industries, is creating new opportunities and space for foreign investment in China. China and Germany already have a good foundation for cooperation in the fields of automobiles, medicines, chemicals, etc. German companies are seizing the opportunity to participate in China's high-quality development. Time will once again prove that the choice of foreign companies, including German companies, to the Chinese market is wise and will be profitable.
In turn, the firm choice of German companies for China should also be a reminder to some people in Europe. Should they still persist in the superstition of the "de-risking" narrative? Samsung Electronics of South Korea has accelerated its layout in China in high-tech industries such as chips, OLED displays, and new energy batteries. Foxconn has also recently increased its investment in Zhengzhou. European companies that have a good cooperation foundation with China and have a certain first-mover advantage in China's high-quality development and high-level opening up to the outside world have no reason to abandon their own martial arts and cut off their own vitality in order to satisfy the political selfishness of certain forces.#Deep Good Articles Project#
