'Huge risk' for companies without presence in China: German business executive

BEIJING - Continuous decoupling poses one of the greatest risks globally, while for a (foreign) company itself, "it is still a huge risk" without having a presence in China, Maximilian Butek, executive director and board member of the German Chamber of Commerce in China-East China, told Xinhua in a recent interview.

"It's difficult for anyone outside China to understand how innovative China has become and how rapid this development has been achieved in high quality, especially in the last five years," Butek said. "It's also difficult for them to see how interlinked German companies are with Chinese companies here."

Butek noted that many German companies have "a heritage of over 100 years in China, and they have become very Chinese while maintaining their German DNA." He added that for new cooperation to thrive, "it's more about whether you are willing to learn and engage deeply with China."

Butek observed that CEOs from both large German companies and small and medium-sized enterprises visited China this year as part of various government delegations. He also noted that relaxed visa policies are facilitating increased German business travel to China.

"When they come here, they are all surprised at how smooth these corporations work and how efficient R&D innovation can happen here in China," Butek said.

"China has a lot of talents, good infrastructure, and a lot of good innovative suppliers they can use," he said.

"Initially, we brought technology to China. Then, we reached a stage where we innovated in China for the Chinese market. Now, we see more innovations emerging from China that impact the world. So we are shifting a little bit from purely capacity building here toward also tapping into the innovation system of China," Butek added.

According to a report published in July by the German Chamber of Commerce in China, 70 percent of German automotive companies drive innovation by forming strategic partnerships with universities, suppliers and customers in China.

German direct investment in China has been surging, with the total in the first half of the year already surpassing that of the entire previous year, the Financial Times reported recently, highlighting German confidence in the Chinese market's prospects.

In the second quarter of this year, German direct investment in China reached 4.8 billion euros ($5.3 billion), nearly double the amount recorded in the first three months, bringing the total for the first half to 7.3 billion euros. For comparison, total investment stood at 6.5 billion euros in 2023.