Interview: Chinese market crucial for German companies' long-term success, says Roland Berger executive

Denis Depoux, Global Managing Director of Roland Berger, speaks at a panel discussion themed on "China Economic Outlook" during the Boao Forum for Asia (BFA) Annual Conference 2024 in Boao, south China's Hainan Province, March 28, 2024. (Xinhua/Tang Rufeng)

The steady rise in German investment underscores both the reliance on China and the innovation driving its economy, Denis Depoux, the global managing director at Roland Berger, told Xinhua.

by Xinhua writer Li Hanlin

BERLIN, Oct. 13 (Xinhua) -- China continues to be a vital market for German companies, playing a crucial role in their long-term success, said Denis Depoux, the global managing director at Roland Berger.

In a recent interview with Xinhua, Depoux highlighted the strong attraction of the Chinese market for German businesses, noting that the steady rise in German investment underscores both the reliance on China and the innovation driving its economy.

German investments in China reached a record 7.3 billion euros (8.2 billion U.S. dollars) in the first half of 2024, according to the Central Bank of Germany. "While this may not be fully reflected in official foreign direct investment statistics, these profits remain in the domestic market for expansion," Depoux said.

"Germany is renowned for its high-quality industrial tools and equipment, essential to China's industrial modernization," Depoux said, highlighting the robust demand for German equipment in China.

This sustained demand is a key driver for continued investment by German firms, whose manufacturing and technological strengths align closely with China's modernization needs, he said.

In recent years, German investment has increasingly shifted toward reinvesting profits, indicating that companies view China as a critical platform for deep localization and long-term development, he added.

A man tries an electric pickup truck at the booth of Chinese automaker SAIC Maxus during the media preview of the International Motor Show (IAA) Transportation 2024 in Hannover, Germany, Sept. 16, 2024. (Xinhua/Ren Pengfei)

While the European Union (EU) has initiated trade investigations against Chinese electric vehicle (EV) companies, particularly regarding subsidies, Depoux said that this does not diminish the importance of the Chinese market in the strategic plans of German companies.

"The rise of new EVs in China is transforming a market that was once dominated by internal combustion engines. Traditional and emerging Chinese automakers are leapfrogging this phase, reshaping the industry," he said.

Depoux highlighted that new Chinese EVs prioritize customer experience, delivering practical and engaging travel solutions. This shift reflects a transition from a "product-oriented" to an "experience-oriented" approach, driving a global revolution in the automotive market. He added that electrification will play a crucial role in reducing greenhouse gas emissions worldwide.

He also noted the growing investment by Chinese companies in Europe, including the establishment of research centers and production facilities, which fosters growth, drives innovation and creates job opportunities in local markets.

"By boosting productivity and product value, Chinese companies can secure greater pricing power globally, leading to increased profits that benefit society," he said.