Businesses are facing two risks: the risk of losing money and the risk of missing opportunities. Every company must find its own balance here. They carry out their own risk management, which includes hedging against supply chain risks, market risks and geopolitical risks.
China is not easy and foreign companies face many obstacles, such as lack of IPR enforcement, data security laws, increasing political influence and control, rising HR costs – the list of burdens for German companies is long, but they do not necessarily outweigh the advantages of doing business in and with China. Most companies will probably not abandon the Chinese market and will not decouple from China, but their focus will shift to de-risking rather than decoupling.
Companies are aware that they are well-advised to be more cautious and not to put all their eggs in one basket.
German companies today should know that China aims to become less dependent on foreign companies and have a more autarkic economy. At the same time, there is an explicit political and strategic desire to make foreign companies and international supply chains dependent on China in order to gain influence and leverage.