Sentiment Amongst German Business Managers in China Improves

German managers in China are more optimistic again regarding the current economic situation in the world's second largest economy. Following negative evaluations in four consecutive quarters, China's economic situation is for the first time judged more positively again. According to the surveyed managers, the likelihood of an economic slowdown to occur within the coming twelve months remains relatively high. With 33 per cent, however, it is significantly lower than in the previous survey (53 per cent).

At the same time, an improvement in economic dynamism is considered more likely than in the previous quarter, with the indicator soaring from 12 to 25 per cent. This is the outcome of the latest ZEW-PwC China Economic Barometer by the Centre for European Economic Research (ZEW) and PricewaterhouseCoopers (PwC), which surveyed 47 executives and managers from German companies in China. "The economic sentiment for China has improved," comments Thomas Heck, partner and China expert at PwC. "With the recent acquisitions of foreign companies, the country has shown that it vigorously promotes the modernisation of its economy and that it is willing to make the necessary investments."

German businesses remain attractive targets for takeovers

The surveyed managers expect Chinese businesses to significantly expand their takeover activities abroad in the coming six months. The corresponding indicator rose from 56.6 in the first quarter, to a current reading of 66.7 points. According to the respondents, Germany will become even more attractive as a target country for takeovers. When it comes to Chinese national investments, the surveyed managers expect to see increasing activities, particularly in information and communication technologies, in the services sector and in the consumer goods industry in the coming six months. "Expectations for the building sector as well as for the steel and metal industry, however, remain gloomy," explains Dr. Michael Schröder from the Centre for European Economic Research (ZEW). "For these industries, the experts continue to expect a significant decline in investment activity." The German managers recognised a trend reversal for the chemicals sector, as well as for mechanical engineering, electrical engineering, and vehicle manufacturing. Investment expectations for these four sectors are now predominantly positive.

China exceeds Germany in mobile payment systems

The survey reveals considerable differences between Germany and China as far as the adoption level of mobile payment systems is concerned. The experts unanimously agreed that the development of mobile payment systems is more advanced in China than in Germany. 63 per cent even consider China's advance over Germany to be substantial. Almost half of the experts (47 per cent) think that German customers are generally reluctant to use mobile payment systems. Merely 14 per cent consider the acceptance level regarding mobile payment solutions in Germany to be high. "Unlike Chinese consumers, Germans are rather critical of mobile payment systems due to concerns about data protection issues. Concerns are particularly great with regard to new financial service providers which are yet unknown to them," explains Thomas Heck.

For more information please contact:

Dr. Michael Schröder, Phone +49(0)621/1235-368, E-mail: schroeder@zew.de