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German firms buck R&D trend in China, seek ecosystem partners to gain edge

German Chamber of Commerce in China survey shows an increasing number of firms are conducting research and development in China

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German Chancellor Olaf Scholz visits a Bosch production facility in Chongqing. Photo: dpa

China is increasingly becoming an attractive hub for German companies to carry out research and development (R&D) to remain competitive in both local and global markets, a survey by the German Chamber of Commerce in China showed.

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The findings were in contrast to recent moves by some American firms to withdraw R&D from China amid an overall trend of decoupling and diversifying away from the world’s second-largest economy.

According to the survey of 324 German companies in February and March, 63 per cent said they were conducting research in China, representing an increase of 6 percentage points compared to 2022.

And with 69 per cent carrying out development in China, the findings indicated a trend towards localising R&D and enhancing product competitiveness in a push to expand customer bases, the report said.

Over half of the respondents aimed to enhance product competitiveness, increase access to existing or new markets and boost brand recognition.

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“German companies are investing in local innovation and strategic partnerships with customers and suppliers to stay competitive in an intense and dynamic market environment,” said Martin Klose, executive director and board member of the German Chamber of Commerce for the south and southwest regions.

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