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Foreign firms bullish about economy

By He Wei (China Daily)

13:22, May 07, 2012

A woman demonstrating a heat-resistant material at a building materials fair in Shenyang, capital of Liaoning province. Many foreign companies are still bullish about China's property market and have continued to invest in both real estate and building materials. [Photo/China Daily]

Germany has always been the cornerstone of the European economy but Europe is not as important to Germany as it used to be.

For the first time China has become German companies' top foreign investment destination, totaling $1.36 billion by the end of last year, according to a survey by the Association of German Chambers of Industry and Commerce. The amount was more than the combined German investment in France, Spain and Italy.

The profound shift is visible in the case of Knauf Gips KG, a German-headquartered plasterboard manufacturer.

When asked what helped turn the family-owned workshop into the world's second-largest gypsum board maker, Mark Norris, the company's China chief executive officer, said one particular factor stands out - China.

After its entry into the Chinese market in the 1990s, Knauf built three plants in Beijing, Shanghai and Guangzhou. The initial investment soon gave Knauf a solid foothold in the country's dry-wall market.

Norris said he was quite bullish about the future and remained committed to continuing investment, despite decelerating economic growth in China, compounded by the European crisis and stagnation in the United States.

"In relative terms, China remains a dynamic growth engine compared with places like Spain and Greece, where there is absolutely no growth," he said.

"And people seem to forget that the market is so big, the demand for good quality is there.

"As we noticed over the past five years, a mid-to-upper class has emerged and the quality of life is increasing. People are prepared to pay for green building materials. Even though it's not comparable to the European or US standard, it is catching up quick."

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