Which strategic success determinants are essential for German manufacturing companies and can be used as a basis for decisions to invest in China? -1-

During our VDHC China trip from June 22 to 29, 2023, led by Prof. Dr. Hermann Simon, which took us to the cities of Beijing, Sanhe City, Zhengzhou, Wenzhou and Hangzhou, Ms. Dr. Eva Werther-Halfar and Mr. Rainer E. Ulrich had the unique opportunity to conduct talks and visits on site. Among others, we met with representatives of the investment promotion department of the Ministry of Commerce, the city administration, the district government, and decision-makers of Chinese SMEs.

Compared to my last visit to China several years ago, I was able to observe that China now has many strategic success determinants with the "best-in-class" seal of approval, which are essential for the allocation of private investment capital.

In four sections, we will make visible to the daring decision-makers of medium-sized enterprises because and how investments in China generate added value of the investment capital employed.

Which strategic success determinants are essential for German manufacturing companies and can be used as a basis for decisions to invest in China? -1-

For German manufacturing companies considering investments in China, several strategic success determinants are essential to consider. These determinants can help guide decision-making and increase the chances of a successful investment. Here are some key factors to consider:

Market Potential:

Assess the market potential in China for the specific products or services offered by the German manufacturing company. Consider factors such as market size, growth rate, demand trends, and competitive landscape. Analyze whether the company's offerings align with the needs and preferences of Chinese consumers or businesses.

Cost Efficiency:

Evaluate the cost advantages of manufacturing in China, including labor costs, raw material availability, energy, infrastructure, and logistics. Compare these costs with those in Germany and other potential investment locations. Consider the potential for economies of scale, cost competitiveness, and overall cost efficiency in the Chinese market.

Regulatory Environment:

Understand the regulatory environment in China, including policies related to foreign investment, trade barriers, intellectual property protection, and labor regulations. Assess the ease of doing business, legal frameworks, and any potential risks associated with operating in China.

Supply Chain Integration:

Analyze the extent to which the German manufacturing company can integrate its supply chain with Chinese suppliers and partners. Consider factors such as supplier capabilities, quality control, reliability, and proximity to customers. Evaluate the potential benefits of accessing local suppliers and leveraging China's manufacturing ecosystem.

Are you also considering whether an investment in the People's Republic of China as part of a location strategy for the future would be beneficial?

SEViX as an entrepreneurial solution provider can make visible to courageous decision makers of medium-sized businesses why and how investments in China generate an added value of the invested capital.

Do not hesitate to contact SEViX at [email protected].