A recent survey conducted among nearly 140 German mechanical engineering companies in China showed more companies believed that the impact from the coronavirus pandemic has eased.
About 24 percent of the companies saw the pandemic effects as minor, almost doubling the percentage in the April survey. Specifically, sectors such as agriculture, construction, railways and pharmaceuticals were among those that reported minor effects, the association said.
Meanwhile, 30 percent of the respondents assumed that they will reach their growth target for 2020, said the VDMA. Their optimism is based on the comprehensive government economic stimulus measures that are obviously having an effect, the unexpectedly rapid recovery of the Chinese domestic market and new, emerging business opportunities, it added.
The survey results also showed that the influence of the pandemic in Europe on companies in China were perceived as less critical than two months ago, but 42 percent still saw the situation in Europe as a challenge, the association said.
Hurdles in bilateral business environment include delivery delays, lack of technical support and postponed decision-making processes, as reported in the survey.
"Some companies currently see potential in China, but are unable to exploit it because they are currently hardly heard at their headquarters," said Claudia Barkowsky, managing director of the VDMA in China.
German machine manufacturers also reported that 31 percent of their customers are sticking with their original investment plans and 13 percent are even planning new investment projects.
About half of their customers continue to postpone their investments, which might lead to a strong upswing in the first half of 2021 when those projects are hopefully realized, according to Barkowsky.
While reiterating concerns over international travel restrictions, the VDMA also noted that rail freight transport to and from China has become a real alternative at a time when costs for air freight were higher.