Companies focus on quality for holding on to Chinese market

27 Jun '08

2 min read

A global recession is the most obvious conclusion, when the US economy seems to be heading for a slow down. However, German companies have managed to stay afloat by trading high-quality capital goods for securing growth in the emerging markets.

Some believe that German companies supplying goods to Chinese industries are being impacted as the US slowdown has lowered demand for Chinese products. This in turn would weaken Chinese demand for German capital goods which are extensively used for manufacturing.

However, there are a section of others who believe that German companies were doing a stable business due to healthy demand from within China itself.

In fact, ties with China were actually gaining significance because the export sector which is tremendously growing in Europe in recent years has helped exports to China rise by 19 percent in the first quarter of 2008.

Nevertheless, it is not all that easy for Germany to run successful business in China especially in textile and other related sectors where margins are lower and cost of production high. Even companies that are flourishing in China are cutting down on transportation and other costs to retain customers who keep raising demands on quality.

With the kind of reputation German companies have for providing quality products, it will not be very difficult for them to customize or develop products to suit the specific need of the Chinese market.

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