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Chinese firms struggling to enter German market, study says

Small and medium-sized companies are among the most likely Chinese investors in Germany, but many struggle with bureaucratic constraints, limited market knowledge and intercultural differences, according to a study released on Friday.

Published: 18 February 2011 16:53 CET
Chinese firms struggling to enter German market, study says
Bavarian premier Horst Seehofer with a Chinese diplomat. Photo: DPA

The German Center for Market Entry (GCME) at Berlin’s Free University said they had looked for the first time at how Chinese companies view business conditions in order to find out what they considered the biggest challenge to investing in Germany.

Among 14 economic development experts and 96 Chinese companies, results showed that they could make substantial improvements in their approach to the market, but that there were ample opportunities for German businesses to aid in the process.

While the public generally perceives investment from China as coming from large firms, in reality about 70 percent of the country’s business activity comes from small and medium-sized firms with fewer than 10 employees, the GCME said in a statement.

“Predominately, only sales offices and small subsidiaries are established,” said GCME head and study co-author Alexander Tirpitz.

Some 42 percent of the Chinese companies in Germany invest less than $250,000 – a situation that creates problems because only non-EU companies that spend more and create at least five jobs are given residency permits.

The strongest motivation for Chinese companies to expand into Germany are sales and marketing opportunities, with access to research and development trailing shortly behind.

Companies in the study, however, made the mistake of thinking that their first priorities should be identifying potential customers and business partners instead of learning the language and business culture, Tirpitz said.

“Overall the market entry for Chinese companies in Germany is difficult,” he said in the statement.

Compared to other international business destinations, some 44 percent said learning the language was a particular challenge, while 48 percent said obtaining a work permit was difficult. Other bureaucratic hurdles also figured large in stalling Chinese investment, including fulfilling German labour law and other regulations.

Many German companies take little notice of this – but it is an opportunity for the two sides to build strategic co-operations to strengthen their standing in the world market and ease their own potential entry into the Chinese market, the study said.

The Local/ka

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WORKING IN GERMANY

Which Bavaria-based companies regularly hire English speakers?

Bavaria is no doubt a beautiful state with a strong economy, but can be a hard place for non-German speakers to integrate. The Local takes a look at job opportunities in Germany’s southeastern 'Free State.'

Published: 7 February 2024 10:54 CET
Updated: 10 February 2024 08:20 CET
Which Bavaria-based companies regularly hire English speakers?

Munich ranks third in German cities with the highest total GDP, behind Berlin and Hamburg, but in terms of GDP per capita, it’s higher than both of them.

It also consistently ranks high, often highest, in terms of average household income.

As of 2023, nine of the 40 companies listed on DAX, Germany’s stock index, were based in Bavaria. Seven of those are based specifically in Munich.

While Frankfurt is commonly known to be Germany’s business capital, Munich can claim the title of Germany’s insurance capital, which is saying something, as Germany is home to some of the largest insurance firms in the world, like Allianz.

Beyond the state’s capital city, a number of international companies are based elsewhere in Bavaria, particularly in the Franken region, near Nuremberg.

Which companies actively hire English speakers?

Bavaria, and Munich in particular, is home to a number of companies at the forefront of international business. But the state is known for its traditional, sometimes conservative, culture, which affects its business culture as well.

Whereas companies embracing English as their primary business language are easy to find in Berlin, the practice is less common in the south. That said, there are some notable exceptions. 

Sportswear giants, Adidas and Puma, both have their headquarters near Nuremberg in Herzogenaurach, and regularly recruit English speaking international talent.

“As an international company, our teams reflect the rich diversity of our consumers and communities,” Jon Greenhalgh, Senior Manager Media Relations for Adidas told The Local. “Fostering a culture of inclusion where we value and leverage differences, ensures that we can authentically engage with our employees and truly connect with our consumers.”

He added that around 40 per cent of Adidas’ Germany-based employees are foreign nationals, from over 100 different countries.

Siemens and BMW rank among Bavaria’s top employers, and are also known to hire their fair share of foreigners.

“In Germany, we recently had around 2,000 open positions,” Konstanze Somborn told The Local on behalf of Siemens AG.

He added that Siemens operates in 190 countries. “That is why we value international teams very much…English as a common language is very usual.”

READ ALSO: ‘Which German companies want to hire foreigners?’

Similarly, BMW hires workers from a variety of backgrounds. 

“Every year, we hire lots of internationals and welcome them to the BMW Group,” Dr. Hans-Peter Ketterl, a press spokesman for BMW Group told The Local. 

But not all of these positions are available to non-German speakers.

Ketterl added that BMW’s working language is German in the country, even though, “English is an indispensable entry requirement as the second corporate language in many areas of the company.”

Check job boards and follow best practices

If it’s your first time applying for jobs in Germany, make sure to change your resume to the German format, even for English positions.

While Germany is home to its own job boards, like Xing, LinkedIn is probably the best place to start. In addition to searching for positions based in your preferred location, you can check relevant groups, like Munich Startups, to broaden your horizons.

The English Jobs in Germany website is also a good resource to start with. 

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