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China companies see Germany as EU springboard

By Ding Qingfen | China Daily | Updated: 2013-02-26 13:25

Chen Yongwu, general manager of Zoje Europe GmbH, said, "We expect the Chinese investment wave in Germany still to be there in the next five to 10 years."

As the world's leading industrial sewing machine maker, Zhejiang-based Zoje has completed two acquisitions deals in Germany, and is considering another new deal there.

Benefits for Germans

There have been a spate of Western reports saying that China will "gobble up" Europe through purchases, and doubts over Chinese companies cheating their European high-tech counterparts, but for Chinese companies, the arguments don't make any sense.

"For the German companies, joining hands with their Chinese peers is a must and a wise choice for a better future. And I believe many are realizing the importance," said Chen.

China companies see Germany as EU springboard

Amid eurozone debt woes, many German companies find a lack of capital is the biggest bottleneck to expansion and even survival, and China can provide the capital they need, said Chen.

At the same time, for the German manufacturers, the Asia-Pacific region led by China, the largest economy in the region, is an "enticing consumption market" that enjoys comparatively higher expansion.

"So Chinese and German manufacturers are highly complementary to each other. We cannot see any reason for them (German companies) not to welcome the Chinese investment, can we?" said Chen.

The experience of Zoje, Chen's company, also provides proof. Zoje made its first foray in Germany early in 2008, buying a German embroidery machine producer.

In the same year, a joint venture named Kaiser Lutra Textilmaschinen GmbH announced it was spending 10 million yuan ($1.6 million) on establishing a factory in Pinghu in East China's Zhejiang province, manufacturing embroidery machines branded Kaier Lutra.

In 2010, Zoje acquired a 29 percent stake in Germany-based Durkopp Adler AG, and later set up another factory in Wujiang, Jiangsu province, to make industrial sewing machines.

"The partnership provides our German counterparts with quick and easy access to the Chinese and Asian market, helping them cut their costs," said Chen.

According to Wang, there have been misunderstandings among the German government and enterprises opposed to Chinese investment proposals.

"They believed China bought their assets only to obtain technology, fearing that Chinese companies would fire local staff and destroy the management and business model when deals were signed," said Wang.

But such concerns are unwarranted, and Chinese companies' performance in many recent deals in Germany could clear their minds of doubt, he added.

Putzmeister, a family enterprise whose concrete pumps helped build the world's tallest building in Dubai and the Panama Canal, has been in pursuit of capital and increased international expansion since the financial crisis.

Cooperation with Sany provides the solution. As part of its 12th Five-Year Plan (2011-15), China said it will especially develop industries such as high-end manufacturing equipment, information technology, alternative energy, biotechnology, advanced materials and environmentally friendly technologies.

Xiang Wenbo, president of Sany, said Putzmeister would transfer part of its manufacturing capacity to China with the help of Sany, in an attempt to reduce cost and raise profits.

Sany also promised to maintain the original Putzmeister team, and the company's CEO will sit on Sany's board.

Xie Wei, financial manger of Jinsheng GmbH & Co KG, said, "There is huge potential for Chinese high-end manufacturers to make forays in Germany. China could provide all they (German companies) desire - capital, market, cheap laborers, and what is also important, business growth."

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China companies see Germany as EU springboard

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