The Policy Barometer provides quarterly updates on current economic policy topics. It checks in with German companies' sentiments, shares AHK's perspective on it, highlights our advocacy efforts with the German and Chinese governments, and introduces our practical tools. This is a shortened version - German Chamber Members receive the full version via email.
Status Quo
The Ministry of Commerce (MOFCOM) and the General Administration of Customs announced export controls on 7 rare earth elements including Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium effective from April 4. These elements have been added to China's (consolidated) export control list.
Pulse Check
German companies currently need to plan sufficient time in advance, whether for preparing the extensive documentation, waiting for approvals or submitting additional information. It generally takes longer for local customs authorities to implement new regulations.
Status Quo
In early April, the tariff hike between the U.S and China escalated. Reciprocal tariffs of more than 100% have been implemented. After trade negotiations in Switzerland mid-May, a pause of increased tariffs has been announced by the two sides. However, the Chinese export controls introduced in April still remain in place.
Pulse Check
The large majority of German companies in China are affected by the tariff increases by the U.S. and China. A notable decline in the economic outlook among German businesses in China is evident. More than half of German companies predict a decline in economic conditions over the next six months, a substantial increase of 40 percentage points when asked the same question last year.
Status Quo
In April 2024, the European Commission used the International Procurement Instrument (IPI) for the first time and launched an investigation as a response to market access barriers and unequal treatment of European companies in China's procurement market for medical devices. In June 2025, the European Commission announced the result to exclude Chinese companies from European government purchases of medical devices over EUR 5 million.
Pulse Check
According to the Business Confidence Survey 2024/2025, for the first time, the "Buy China" trend has emerged as the primary regulatory challenge for German companies operating in China. From the medical device sector, obtaining required licenses and "Buy China" / "Made in China" rank among the top regulatory challenges.
Status Quo
The 2025 China Government Work Report puts the circular economy as the key pillar of China's "Dual Carbon" targets (achieving peak carbon emissions by 2030 and carbon neutrality by 2060). The focus of the circular economy strategy is on extending the lifespan of products and materials through remanufacturing, reuse, and recycling. Germany and China also jointly engage on circular economy with the "Strategic Dialogue on Circular Economy and Resource Efficiency".
Pulse Check
German companies, with their long-standing experience and advanced technologies in circular economy practices, are well-positioned to play a significant role in China's evolving circular economy. According to our latest Business Confidence Survey 2024/2025, 25% of German companies see the development of China's green initiatives as a business opportunity.
