Chinese companies are increasingly becoming a competitor of their German counterparts in third markets, said an analysis report released here on Monday.

With the enormous shift in the international flow of goods in last 25 years, China established itself as "workbench of the world" and a major exporter of the world, said a joint analysis of Association of German Chambers of Industry and Commerce (DIHK) and Germany Trade & Invest (GTAI).

The market share gains of China are reflected in all key sectors of German exports, especially in the sectors of electronics and electrical engineering, according to the report.

China's exports of chemicals and machinery manufacturing have also presented a challenge to German companies, said Juergen Friedrich, chief executive at GTAI, adding that the direct investment of China abroad has increased significantly in recent years.

While more than a quarter of around 240 German companies surveyed by the DIHK have seen Chinese companies among the top five competitors, two thirds expect an increase in competition from China in the next five years, said Volker Treier, foreign trade chief of the DIHK.

The strength of Chinese enterprises in low-price segment now stretches also on the mid-price segment, he said.

Despite the intense competition with China, more than 20 percent of the German companies surveyed are still open to cooperation with Chinese enterprises in third markets, as a subcontractor or as a client. Endit

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