Nearly a quarter of German companies operating in China are planning to relocate all or part of their business out of the Asian country, according to a study released Tuesday by the German Chamber of Commerce in China.
The annual survey of 526 member firms in China found that 23% of them have either already decided to withdraw production capacity from the country or are considering it. A third of those companies have planned to leave China entirely.
The rest say they will transfer part of their business and production overseas, largely to lower-cost countries in Asia.
Operating costs in China have been rising as the country seeks to rebalance its economy from an export and investment-led model to one driven by services and consumer spending.
Of the 104 companies that have decided to leave or are considering doing so, 71% cite the rise in production costs — particularly for labor.