[Source/Observer Network, Chen Sijia] According to a May 7 report by the South China Morning Post, the latest commercial survey conducted by the China German Chamber of Commerce shows that the tariff war initiated by the US has affected German companies in China, but the investment plans of German companies in China remain strong and are basically unaffected. Companies in China are calling on the German government to engage more actively and wisely with China to support their businesses in China.

US President Trump has announced a 145% tariff on China, and China has also taken countermeasures, imposing a 125% tariff on American goods. According to the survey conducted by the China German Chamber of Commerce in April, among the 143 surveyed German enterprises, 86% of German companies in China have been affected by the Sino-US trade conflict. Compared to other industries, the automotive industry has suffered more severe negative impacts, with as high as 93% of companies being affected.

The ongoing trade disputes have led companies in China to lower their expectations for economic prospects. About 56% of the companies predict that the economic situation in the next six months will decline, an increase of 40 percentage points compared to a year ago.

However, the tariff war initiated by the US has not affected the investment plans of German companies in China. In this survey, half of the German companies plan to continue increasing their investments in China. As a strategic response to the trade tensions, more than one-third of the companies intend to accelerate localization in China.

Photo caption: Volkswagen (Anhui) Co., Ltd. Intelligent Manufacturing Base in Hefei, Anhui Province, Visual China

Oliver Oehms, Executive Director of the North China and Northeast China regions of the China German Chamber of Commerce, said that due to the limited direct trade between companies in China and the US, the impact of the tariff war on these enterprises is more indirect, mainly transmitted through the adverse effects of skyrocketing tariffs on the Chinese economy.

Oehms said that for many years, the member companies of the China German Chamber of Commerce have adhered to the "In China, For China" strategy. "Very deep localization means that they have, to some extent, separated their business in China from their business in the US, which is good news. In this situation, the 'In China, For China' strategy is paying off."

The South China Morning Post pointed out that "In China, For China" is a strategy many foreign companies adopt when investing and producing in China, focusing primarily on serving Chinese consumers rather than international consumers.

In addition, the survey also showed that about two-thirds of German companies in China are calling on the German government to engage more actively and wisely with China to support their businesses in China. Oehms said that many German companies are concerned that the US may exert pressure on Germany, forcing the German government and enterprises to support the US in the tariff war. "We hope the new German government establishes a balanced position."

After Trump launched the tariff war, some German companies have taken action to increase their investments in China. Last month, the German BASF Group announced an investment of 500 million yuan to expand its Cellasto factory in Shanghai Pudong. The expansion will provide advanced noise reduction, vibration damping, and comfort solutions to help the rapid development of China's electric vehicle industry. The expansion project is planned to be completed and put into operation by 2027.

The South China Morning Post previously reported that due to Trump's constantly changing trade policies, the international economic and trade situation is worrying. However, amidst the increasing headwinds of tariffs and the increasingly complex environment for foreign enterprises, many foreign companies have announced new investments in China, casting a "vote of confidence" in China through their actions.

On April 23, Vice Minister of Commerce and Deputy Representative of International Trade Negotiations Ling Ji hosted a roundtable meeting with foreign-funded enterprises to exchange views with enterprises on the impact of the US tariff increase on the investment and operation of foreign-funded enterprises in China. More than 80 foreign-funded enterprises and representatives of foreign chambers of commerce attended the meeting.

Ling Ji stated that recently, the US unilateralism and bullying practices have caused strong dissatisfaction in the international community, seriously damaging the multilateral trading system based on rules and the international economic and trade order, and impacting the stability of the global production and supply chains. All countries, including China, are victims. To safeguard their own legitimate interests and uphold international fairness and justice, China firmly opposes such actions.

Ling Ji pointed out that we hope foreign enterprises will speak rationally, stay confident, overcome difficulties, turn crises into opportunities, and jointly defeat unilateralism and protectionism. China will continue to expand high-level opening-up, effectively protect the legitimate rights and interests of foreign enterprises, take more proactive measures to resolve difficulties in the production and operation of foreign enterprises in China, and strive to ensure the stable and smooth flow of production and supply chains, addressing the issues and demands of foreign enterprises.

This article is an exclusive contribution by the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7501686851133080102/

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