German Companies Drawn to Eastern Europe and China

Attracted by lower labor costs and competitive advantages

German firms that move activities abroad head mostly to eastern Europe and China, and then to other European Union (EU) member states, a study released on Feb. 7 showed.

The Destatis official statistics service said that between 2001 and 2006, 18% of German companies with more than 100 workers had relocated part of their activities in a foreign country, or planned to do so in the near future. Sixty percent had chosen one of the 12 eastern European countries that have now joined the EU, while 36% looked to China and 30% to other EU countries, the study found.

High technology companies were the most apt to head abroad, with roughly one-third reporting they had been drawn by lower labor costs and "better positioning" with respect to rivals. The result in terms of jobs was negative overall.

Relocations had cost 188,000 jobs in the period under review but the companies had also created 105,000 jobs in Germany at the same time.

Copyright Agence France-Presse, 2008

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