Sino-German economic ties: Best is yet to come
When Germany and China established diplomatic relations 35 years ago, they put in motion a commercial cycle that has produced stunning results.
In 1972, German firms exported goods worth $270 million to China. In 2006, the figure stood at $27 billion, a 100-fold increase. In 1972, Germany imported $175 million worth of products from China, while in 2006 the figure came in at around $48 billion, more than a 200-fold increase.
The products of some famous German companies are regarded by the Chinese as being almost local, while Germans commonly buy television sets, clothing, or cameras made in China.
German direct investment in China is the highest among European nations, and Chinese companies are increasingly investing in Germany.
In fact, since China began to open up about 30 years ago, Germany has clearly been the country that has delivered the most crucial technologies to the nation.
As we look with pleasure upon our successes, we also contemplate how we can sustain them and develop our relations still further in the years to come.
Historical ties
As early as 1957, German commerce had re-established its ties with the enterprises of the People's Republic of China through a trade agreement signed by the German East-West Committee and the China Council for the Promotion of International Trade (CCPIT).
In the early days, the great German trading houses of Hamburg and Bremen, some of which had been operating in China since the 1840s, also played an important role in representing German firms before they were able to have their own presence in China.
A highlight of the events that followed the establishment of diplomatic relations was the huge Techno Germa exhibition in 1975, which counted companies from diverse branches of industry among its contributors, and which reintroduced German technology to China.
From 1979, trade relations were supported by the German-Chinese Joint Economic Committee, established by the Chinese Ministry of Foreign Trade and the German Ministry of Economics.
It recently held its 13th session, fully exercising its task to help remove obstacles to the smooth development of trade through cooperation between government and industry.
Cooperation has come in many fields: medicine, chemicals, machinery, public transportation, automobiles, electronics, software, telecoms, and consulting, etc.
But above all, German enterprises have made a particularly remarkable contribution to the relationship by providing know-how to Chinese government and industry.
For example, in the legal realm, German attorneys provided their expertise for the development of the first, exemplary and joint venture contracts under the supervision of the governments of the two countries.
Another important German input crucial to the growth of the Chinese economy concerns the construction of the steel industry in Wuhan, to which German companies from the engineering, machinery and equipment, steel, and electronics sectors contributed in very significant ways.
The licensing agreement signed between a German truck company and the China State Building Corporation in 1981 is among the earliest of its kind, while the first joint venture with a famed German cosmetics company was also signed in 1981.
It came less than a year after the People's Republic of China's first-ever joint venture with a Western company in 1980.
A German commercial vehicles manufacturer signed its first joint venture in 1983, and an automaker's famed JV to produce a "people's car" in China in 1985 led to more than a 50 percent market share for years.
On the other hand, cooperation in the field of construction resulted in Beijing's Lufthansa Center.
To date, more than 2,000 German companies have established operations in China and feel as though they, too, are Chinese companies.
Co-op - Road to the future
The success of cooperative efforts between German and Chinese companies as well as their governments indicates a clear path for the future:
China's per capita consumption of energy is still far less than that of industrialized nations, however, energy efficiency is below Western standards. And because of its size, its absolute requirement for energy has a massive influence on the world market.
Enhanced contact with German technologies in renewable energies, conservation, and efficiency enhancement can bring tremendous benefits to both countries, and also lead to reduced pollution.
In the area of urban transportation, ongoing cooperation will help move more people more quickly and safely by public means, using less energy.
Regarding private transportation in cities, cooperation is expected to result in jointly developed hybrid propulsion systems by 2010.
This is a significant development, keeping in mind the upcoming Beijing Olympics, all the way to the Shanghai EXPO -- appropriately themed "Better City, Better Life" -- and beyond.
Cooperation in the area of international standards will make it easier for Chinese companies to access overseas markets, and Chinese consumers and companies to get the high-quality German products they seek.
At the same time, the safety and financial security of the Chinese people will still be well protected.
German companies, with their great experience in meeting high standards and their knowledge of international standard setting, are excellent partners for both Chinese firms and government.
Trade promotion in China
The German Chamber of Commerce offices in Beijing, Shanghai, and Guangzhou play a strong supporting role in this multi-faceted cooperation process.
German companies in China first came together as a Chamber in 1999. Today, as a part of Germany's trade promotion activities, we help our members and other German companies to procure, purchase, produce, and invest in China.
As part of Germany's investment promotion, the "Invest in Germany" offices assist Chinese companies seeking to invest in Germany in finding appropriate partners.
We also act as the voice of German industry in discussions with the Chinese and German governments.
In response to growing demand in China's second-tier cities and the corresponding opportunities for German companies, we are expanding our efforts in Tianjin, Changchun, Shenyang, Zhongshan, Hangzhou, Suzhou, Ningbo and many other rapidly developing urban centers.
A look at what lies ahead
As we think about a cooperative future, the "Germany and China - Moving Ahead Together" campaign, which Chancellor Angela Merkel has come to Beijing to open officially and is to last through the Shanghai EXPO in 2010, is expected to serve as a vehicle to bring our peoples even closer.
German companies extend their hands to China with the aim of coming up with shared visions and developing and implementing innovative, sustainable solutions to the challenges resulting from China's ongoing urbanization process, as well as contributing to the development of rural areas.
We trust the campaign "Germany and China - Moving Ahead Together" will demonstrate to Chinese consumers and citizens from all walks of life how German ideas, design, technology, innovation, and culture are relevant to them in their day-to-day activities.
German companies welcome the opportunity to broaden research cooperation with Chinese partners. They look forward to continued provision of the appropriate legal framework.
And, as we continue to work with Chinese leaders to improve trade relations, we believe that they are increasingly seeing the protection of intellectual property and the adoption of international standards as being in their own, deepest interest.
We also hope that Chinese companies and investors will become more and more aware of the possibilities and the advantages of investing in Germany, the land in the heart of Europe, which offers access to all of Europe's important markets, an outstanding education system, and a superb infrastructure and knowledge base.
We see Germany and China moving ahead together to seek inspired solutions to mutual challenges that will enhance the lives of people in both countries.
This article was written by Dr. Richard Hausmann, chairman of the German Chamber of Commerce in China and president and CEO of Siemens Ltd, China.
(China Daily 08/25/2007 page2)
