German mechanical engineering industry shows confidence in Chinese market: survey

BERLIN, Nov. 3 (Xinhua) -- A significant 86 percent of German mechanical engineering companies expressed confidence in the Chinese market, according to a survey published on Friday by Germany's Mechanical Engineering Industry Association (VDMA).

Having interviewed 304 companies, the survey revealed that almost half of German companies operating in China intend to expand their business there in the near future.

In response to shifting market dynamics in China, the VDMA has noted "a significant increase in the competitiveness of local companies due to increased quality and technology of products," said Ulrich Ackermann, head of the association's foreign trade department.

Despite some companies' efforts to diversify their sales markets, others are considering greater localization of their supply chains in China. Instead of producing for the global market, they are increasingly pursuing an "in China, for China" approach.

"Almost everything you need in mechanical engineering can now be bought in China itself, often even from the subsidiaries of the usual suppliers," Ackermann said, adding that strategic cooperation with Chinese companies should also be considered.

"A targeted participation in Chinese companies ... can open up access to the innovation ecosystem in China. This allows European machine builders to quickly tap into new local technologies," Ackermann said.

On Thursday, Germany's Bosch Rexroth engineering firm and China's Zhejiang Hechuan Technology agreed to establish a joint venture for the Chinese automation market, including a minority stake for Bosch Rexroth in the Chinese partner company.

The newly founded company is planned to be based in Shanghai. "Combining our competencies in industrial automation will also support the successful development of our respective companies," said Thomas Fechner, member of the management board of Bosch Rexroth.