Japanese, German firms doubt China’s 2024 outlook

More Japanese and German firms with operations in China expect the Chinese economy to deteriorate in 2024 than think the opposite, two surveys show.

About 39% of Chinese branches of Japanese firms said the Chinese economic situation will worsen this year while only 25% anticipated an improvement, according to a survey of 1,713 firms by the Japanese Chamber of Commerce and Industry in China. About 37% of surveyed Japanese firms said China’s economy will remain unchanged.

About 48% of Japanese firms reduced their investment or did not invest at all in China in 2023 while 15% of them boosted their investment. The remaining 38% invested in the country last year at the same levels as they had done in 2022.

Separately, 83% of the 566 German company branches said China’s economy is facing a “downward trajectory” this year, according to a survey conducted by the German Chamber of Commerce in China. About 10% do not agree with this. The remaining 7% said they don’t know.

Of those German firms in China that have bearish views on the Chinese economic outlook, 64% said it will take one to three years for China to regain a robust economic development while 22% said it will take three to five years. About 8% said it will take more than five years while 6% said it will take less than one year.

However, 91% of respondents said they don’t have plans to leave China.

About 9% said they have plans to leave China within the next two years or they are considering it. In a similar survey conducted in 2020, the figure was only 4%.

The board chairman of the German Chamber of Commerce in China – South & Southwest China, Ulf Reinhardt, said Wednesday that 2023 was a reality check for German companies in China. He said many business people