We are keen to work on innovation

German envoy laps up China's dynamism and presses on with a mission to correct false impressions

Fifty down, many more to go; 17 down, 17 to go.

Michael Clauss, Germany's ambassador to China, is big on the numbers. Fifty is how many books about China he has read, he says, and 17 is how many Chinese provinces, autonomous regions, municipalities, and special administrative regions he has visited.

Given that Clauss came to China for the first time less than two years ago, they are impressive scores, but for Clauss what is really impressive is this land of challenges and dynamism, two words he is unsparing with in talking of China.

"I would use the word challenge first in describing China," says Clauss, speaking during a one-day outing in Shenyang, capital city of Liaoning province.

"It's not quite as complex as the European Union with its 28 member states, but its diversity cannot be denied. Whether you are in Liaoning or Tibet in the north or Shanghai, Guangdong or Hong Kong in the south, the differences are striking."

As for the country's dynamism, Clauss says: "China is more aspiring and dynamic compared with a developed country like the US or European countries, because China wants to succeed and catch up. It already has. If you look outside, it is very modern. In other parts of China, such as provinces in the west, they are lagging. But if you look at things here, it is highly developed."

At that point Clauss declares that he has revised his outlook on how China should be classed.

"I don't talk about a developing country any more," he says, pointing to skyscrapers outside the offices of the German consulate-general in Shenyang, even as a new skyscraper takes shape nearby. Clauss says China and Germany are important trading partners for one another, and there is huge potential for more collaboration, particularly in manufacturing.

"Trade between us was worth 160 billion euros ($180 billion) last year, 11 percent more than in 2013, which exceeded economic growth in China. So that's already quite important. If you look at 160 billion euros, it is almost twice the figure for trade between China and Russia, and more than China's trade with the United Kingdom, France and Italy combined.

"There are great opportunities for increasing that, primarily in innovation, because China has to innovate with its industry, and Germany needs to, too. That's why we believe there is more scope for us to work together economically. We are both strong in manufacturing, so we need to work together. There is collaboration between companies, with Chinese companies going to Germany and German companies coming here."

Clauss says the two governments are keen on working together on innovation.

"China is embracing the Made in China 2025 strategy, and Germany's equivalent is Industry 4.0. They both aim to improve national manufacturing capability and competitiveness." Last October when Premier Li Keqiang was in Berlin a 20-page agreement was signed that covered collaboration on Industry 4.0, he says.

"China needs innovation to increase productivity and avoid the middle-income trap. This is the fourth industrial revolution. The third was atomization and the fourth is the digitalization of production."

China's leadership is keen for the country to catch up with the leading industrial countries, he says, and for that to happen, companies need to work together.

China is even becoming more competitive with Germany economically, he says.

"China is moving up the value chain. I think there is pressure on German companies, and they need to keep on improving to stay competitive. This kind of pressure is good for motivation. German companies need pressure to improve and become more productive.

"It's important because both our countries rely on production and on exports. Germany has few natural resources so it's an exporting nation. You are No 1 and we are No 2. We need this pressure."

China has the advantage of a huge market that Germany does not have, he says.

"The population of the EU is 500 million, a bit more than one third of the domestic market of China. German companies believe this is a fast-growing market, and they need to come here."

Some difficulties are in store as the two countries try to work together, he says.

"German companies want to see more market access, less red tape, and we know that Premier Li is fighting against red tape. That will be extremely helpful, as will better intellectual property rights protection and improvements in regulations and laws.

"We know the government is working on all these issues, but we want it to speed up. Even Li is complaining that the process is slow. Reducing red tape is very important, and I think many companies and all companies here appreciate the fight against corruption."

Clauss was on his first trip to Liaoning, and he was the first foreign ambassador to pay a visit to the new Party secretary of the province, which he did an hour before speaking to China Daily. Later he was to meet the governor of the province. "In the meeting, we obviously talked about relations between Liaoning and Germany, about (the car firm) BMW, about increasing GDP growth. A lot of German companies are in China, especially on the east coast. Liaoning and Shenyang kind of mirror the country, where China and Germany work closely together in manufacturing. For example, BMW set up the BMW Brilliance Automotive joint venture in Shenyang in 2003 to make and distribute BMWs in China, and the Shenyang plant now turns out 300,000 motor vehicles a year, a figure that is expected to rise to 400,000 over the next two years.

Over the next few years, too, BMW plans to expand its portfolio of locally produced vehicle models from three to six, Clauss says. "I can't say exactly why BMW came here. They obviously got a good offer. But what I can tell you is that they are very happy with the way things are going.

"They have good relations with the government and there are no obstacles at all. It may sound simplistic, but it is true: Germany has a great deal of advanced technology and China has a huge market."

BMW is investing more in China, and Volkswagen will invest more than $20 billion in the next couple of years in Changchun, Jilin province, and Tianjin, Clauss says.

More and more Chinese companies are going to Germany and investing in the country, too, he says.

Clauss lives with his wife and four children in Beijing. He generally gets up at 6:15 am and goes running if time permits, he says. He leaves for the office at 8:00 am and does not get home until about 12 hours later.

"The workload is not that heavy and it is always inspiring to meet different people."

Despite the work of people like Clauss, he says that many Germans have little understanding of contemporary China.

"Sometimes I hear people say they are amazed about how quickly things have developed in China. Many Germans have still not been to China; they get it from movies or school textbooks.

"Last weekend my wife and I went to see Peking Opera. It's obviously extremely difficult to understand, but we thought we would go, even if just once. We eventually realized we could understand it by following the actors' movements.

"We then decided to go again. Yes, China and Germany are very different from one another, but there is huge potential for us to understand one another better and to work together."

Contact the writers at huhaiyan@chinadaily.com.cn

(China Daily European Weekly 06/26/2015 page28)