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Tough Times for German Firms in China

  • Why it matters

    Why it matters

    As growth slows in China, the country is experiencing capital flight.

  • Facts

    Facts

    • Beijing is locking up company profits and opening up new industries to foreign investors to simultaneously curb capital flight and attract more money.
    • Chinese companies have begun shifting their money out of the country in the search of more attractive investment opportunities.
    • In response to the changing economic landscape, German companies need both innovative products and the support of European governments and lobby groups to push for protection against structural disadvantages, the author argues.
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    Audio

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Continental Tires in Hefei
A Continental factory in Hefei, China. Photo: DPA

German companies must brace themselves for difficult times in China as Beijing locks up company profits and opens up new industries to investors to simultaneously curb capital flight and attract more money.

After decades of investing in their businesses there, suddenly it has become more difficult to extract profits.

China has long been accustomed to more capital flowing into the country than investors took out. With its market of up to 1.4 billion customers, the burgeoning economy was irresistible for businesspeople. But that perception is changing as the country bids goodbye to that level of growth.

 

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