German businesses in China are seeing improvements as the country’s economy restarts, but still face serious challenges from the fallout of the coronavirus crisis, according to a newly released survey.
The results of a March survey of members of the German Chamber of Commerce in China were published on Thursday.
“German companies in China are technically capable of producing almost at pre-crisis levels,” said Maximilian Butek, a member of the board.
Staffing ratios, production capacities and internal logistics have normalized for most of the respondents, the survey showed.
However, actual business activity has barely resumed.
“The economic effects on companies are still serious,” according to the chamber.
More than two-thirds of the companies surveyed predicted a double-digit decline in sales for the first half of the year.
This is 20 per cent more than in a survey conducted in February.
Most companies are trying to postpone or even cancel investments, and business will probably not return to pre-crisis levels until the beginning of the second half of the year, according to the research.
Limitations on domestic travel and a ban on allowing foreigners into China for fear of “imported” cases of the virus has made business more complicated.
Global supply chains have been heavily disrupted and the demand for goods manufactured in China has decreased.
The mood in China’s industry had dropped to record lows in January and February, as the economy was forced to a near standstill.
However, factories and companies are slowly resuming work and hardly any new cases of community transmission of coronavirus have been reported for weeks.