Even before the war of aggression against Ukraine, the share of German companies in Russia was steadily declining. The invasion is now finally destroying decades of cooperation, says AHK boss Matthias Schepp.
The German economy in Russia fears the consequences of the war by Kremlin chief Vladimir Putin against Ukraine.
«Even for experienced and crisis-tested managers, the attack on Ukraine is a shock. With the war, the unimaginable human suffering and the loss of trust on many levels, what has been achieved in decades of successful economic cooperation is being thrown back dramatically,” said the head of the German-Russian Chamber of Commerce Abroad (AHK), Matthias Schepp, the German press Agency.
The Chamber had already complained about a decline in German companies in Russia after the previous sanctions and in view of the difficult business conditions in Russia. According to AHK information, their number fell by eight percent in 2021 compared to the previous year. Most recently, 3,651 companies with German capital were still active in the largest country in the world, citing information from the Russian tax authorities. In the past ten years or so, 42 percent of the companies have withdrawn – in 2011 there were still 6,300 companies with German capital in Russia.
«China Economic Winner»
The German economy fears that the trend of leaving the country and withdrawing capital could now accelerate massively. Some companies have a lot to lose. «Those who own a factory cannot simply pack it in a suitcase. The companies are looking at how they can keep things going so that they don’t have to write off the investments completely,” said Schepp. Russia has always reacted demonstratively calmly to the possibility of Western investors staying away and has been increasingly orienting itself towards Asia for years.
«China is one of the economic winners of this dispute. Chinese companies will take the places that German and other Western companies are now giving up,” said Schepp. Threats by high-ranking Russian politicians to nationalize the property of Western companies are also causing horror among German and foreign companies. The companies should therefore be nationalized and used to create jobs in state-owned companies. Ex-President Dmitry Medvedev, who is deputy head of the National Security Council, also argued in this way.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
