Herrmann said that the structure and knowledge base of German industry "fits very, very well with the reform agenda of China for the next few years."

German companies in China believe that economic conditions remain fairly stable compared with 2013 and they're

Stressed ties 'don't hurt' investment flows

German companies remain optimistic in China

The automotive sector in particular maintained a largely positive outlook.

One key point in the report: this year, there is the jump in the portion of companies expecting to exceed business targets compared with 2013. That indicates the slowdown isn't as severe as anticipated, said the survey.

In late March this year, President Xi Jinping visited Germany, which is the nation's largest trade partner in the European Union. It was the first trip by a Chinese president to Germany in eight years.

Michael Clauss, German ambassador to China, said that the success of China's economic reforms "depend, to a large extent, on foreign investment in China and the country needs to continue to create a level playing ground for investment inflows".

Business challenges related to human resources - rising labor costs, finding and keeping qualified staff - have consistently been the biggest challenge for German companies.

"However, a comparably smaller share considers them to be major business challenges," Herrmann said. "German companies are getting more mature.

"For the first time, more than 50 percent of the companies have operated in China for over a decade. They have invested in their people, brought new training methods into China."

Slow Internet speed has become the biggest non-personnel business challenge confronting German companies, according to the survey.