BEIJING, May 12 (Reuters) – Business sentiment among German firms in China has improved compared to a year ago, a German business lobby group said on Tuesday, with companies planning more investments in the region despite uncertainty surrounding the war in Iran and trade.
According to a survey of 216 companies by the German Chamber of Commerce in China, 37% of respondents foresee an improvement in China’s economy over the next six months, 22 percentage points higher than last year, while only 17% anticipate a deterioration – a sharp drop from 56% in 2025.
Almost two thirds (61%) plan to increase investments in China within the next two years, up from 53% a year ago and marking the highest level since 2023.
Some 11% plan to reduce investments, three percentage points lower than in 2025.
Three quarters of the firms reported an impact on their business from the Iran war, mainly due to rising logistics costs.
Trade tensions are also affecting companies’ operations, with over two thirds (69%) reporting a hit from U.S.–China tensions and over half (59%) being impacted by EU–China tensions.
Despite this, 42% of surveyed firms expect their turnover to rise by year-end, compared to 29% in 2025, while 29% anticipate higher profits, a rise of 11 percentage points from last year.
A third (34%) expect an improvement in their industry’s development, while another third (33%) expect conditions to worsen.
(Reporting by Christian Kraemer, writing by Linda Pasquini, editing by Friederike Heine)
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