China’s global expansion offers German firms opportunity, but they see window narrowing

While German companies operating in China increasingly view the global expansion of local firms as a chance to collaborate, the window of opportunity is narrowing as Chinese firms quickly adapt, according to a new report.

The internalisation of Chinese companies has emerged as the most frequently cited business opportunity for German firms in China, selected by 36 per cent of survey respondents and up from 20 per cent in 2022, according to a report published on Thursday by the German Chamber of Commerce in China.

Engagement happens in several ways, with nearly half of surveyed German businesses supplying products or services to Chinese companies operating abroad, while a quarter assist them in meeting international standards.

“Yet, this complementarity is not a permanent state,” the report noted. “As Chinese firms rapidly acquire new capabilities, the competitive landscape is shifting, and the window of opportunity to partner with them on their global expansion is narrowing.”

The report drew on findings from the chamber’s 2025-2026 business-confidence survey of 627 member companies, as well as interviews with 11 executives between April and June this year.

Several interviewed executives noted that Chinese companies were rapidly building the strengths they were seeking from German partners, including brand credibility, global presence, and regulatory and standards know-how.

An executive of an automotive joint venture noted that some Chinese standards had already surpassed German benchmarks in certain technology segments, even as the Chinese entity still lacks the expertise to manage intellectual property internationally.