China has a crucial location advantage that German companies can leverage to their benefit: the combination of factor costs and economies of scale makes the country an attractive production site for the Asian or even global market. Internationally active corporations have long established themselves in the Chinese market and are competing for margins. However, on the cost side, China has a decisive location advantage that German companies can exploit: the combination of factor costs and economies of scale is increasingly making China an appealing production location for the Asian or even global market. According to a study by the authors, one-third of German value creation in China is expected to be destined for foreign markets within the next five years, as indicated by expert interviews with 50 top managers.