German companies are somewhat more cautious in Hong Kong
© LeeYiuTung / iStock / Getty Images Plus
The mood among German companies in the Asia-Pacific region has improved noticeably. Companies are particularly optimistic about economic development and their business prospects. However, Greater China is an exception. Optimism there remains subdued.
This is the result of the latest special analysis of the AHK World Business Outlook (WBO), for which the German Chambers of Commerce Abroad (AHK) surveyed around 660 German member companies in the Asia-Pacific region in cooperation with the German Chamber of Commerce and Industry (DIHK).
Volker Treier
© DIHK / Werner Schuering
German companies' investment intentions have increased or remained the same in many locations in the Asia-Pacific region. Only in Hong Kong, Singapore and New Zealand is a certain reluctance to invest in the future noticeable.
The relocation of investments in the Asia-Pacific region, on the other hand, shows that companies are reorienting themselves or expanding their markets. These reorganisations are accompanied by growing confidence. A positive development is particularly noticeable in Japan. "More and more German companies are setting up or expanding important units there, as Japan plays a central role in their China+1 - strategy", says Treier. Companies in India, the Philippines and Vietnam are particularly optimistic about economic development.
While employment plans in Hong Kong and the People's Republic of China are negative, most other AHK locations in Asia-Pacific are expecting new jobs. Significant employment growth is expected in particular in the Philippines, Japan and Malaysia. More companies in Sri Lanka are also expecting additional jobs, which explains the positive balance of 30 compared to 12 points in autumn last year.
However, diversification remains a challenge. German companies in Asia-Pacific have already begun to adapt or expand their business activities. Tapping into new markets and expanding the supplier network are key strategies. In Hong Kong and Malaysia, the focus is on expanding the supplier network, while companies in Singapore, Vietnam and Taiwan are tapping into new sales markets.
However, around four out of five companies (84 per cent) encounter obstacles in their diversification efforts, particularly in the search for suitable new suppliers or business partners, in new regulatory requirements, and high costs. "Diversification isn't made quick and easy", says Treier.
These results illustrate the dynamic developments and challenges that German companies are facing in the Asia-Pacific region. Nevertheless, the region remains an important and promising market for German investment and business development.
You can download the special evaluation here:
AHK Asia-Pacific Business Outlook Spring 2024 (PDF, 1 MB)
The Asia-Pacific Conference of German Business (APK) takes place every two years, this year from 24 to 26 October in New Delhi. At the conference, experts, decision-makers and representatives from governments, business and civil society will discuss key challenges and opportunities in the region.
The event serves as an active platform for a wide-ranging exchange on political, economic and social issues that characterise the dynamic development of Asia and the Pacific. With a focus on interdisciplinary approaches and innovative solutions, the conference endeavours to develop shared perspectives and to strengthen regional cooperation in order to shape a sustainable and stable future.
