German Economics Minister Visits China

It has been two and a half years since a German economics minister visited China. Rainer Brüderle says things will now be different, stating, "China is so important that the German Economics Minister should visit China at least one a year. Dialogue makes plain talking on both sides. We won’t get anywhere if we just keep saying "yes" to each other.”

Concerns of China and Germany

Both sides have their concerns. China would have liked to see Germany vote against the extension of tariffs on Chinese shoes in the EU. But Germany did not comply and Brüderle's Chinese counterpart, Chen Deming, expressed his dismay about the issue. The Germans, on the other hand, fear a wave of cheap steel, cement and aluminium heading towards them.

Jürgen Hambrecht, President of the Asia-Pacific Committee of German Economy criticises Beijing and argues that China is producing far too much of these kinds of products to combat the financial crisis. He says, "The topic of discussion is 'What does China have'. Large over-capacities in steel, over-capacities that even exceed Europe's total steel capacity. Of course, this has an impact on the world markets and as China grows, it will also have to take on more responsibility - not just for its own country, but for the world economy, because it needs a division of labour to be able to function."

Germany's Investment Opportunities in China

Brüderle has emphasised Germany's opportunities in Beijing. China is aiming at massive investments especially in Germany's services industries. For example, Deutsche Bank. Jürgen Fitschen, from the board of directors, has announced that the Chinese sector of Germany's largest commercial bank will be looking to expand, as Fitschen explains:

"In the coming weeks we will open our fourth office in Tianjin. This and various construction sites and a 20%-share in a medium-sized bank means we are in a good position to participate in the opportunities at hand. We expect an increase in privatisation, which will mean potential for transactions on the equity market for institutions going public. We are determined to play a leading role in this. We also assume that Chinese companies will use their financial capacities to invest abroad. And for this we plan to provide them with European knowhow as their banking partner."

New Opportunities, New Contracts

There are no visits without new contracts. Rainer Brüderle discussed the delivery of tunnel drills and a biogas plant, which is to be built by Markus Dicke from the Hamburg company, Journal Biogas, with a Chinese partner.

Dicke said one of the most important things is patients. In the end his patients have paid off, as he has now hopefully found a strong partner for his project.

Quality versus Price

German products are valued by the Chinese for their quality, but are also criticised for their high prices. The German minister also visited the Hörmann factory, owned by the Westfalian door manufacturer, in Beijing. The company's customers are mainly real estate agencies, hospitals and industrial companies. Hörmann manager Dirk Fell says German doors are expensive but top quality pays off.

Fell says there is quite a large gap between his prices and those of the Chinese competition: "Well, in the door business, I would say it is 100% more, or double. We usually aren't successful until the second construction phase, after the customers have had really bad experiences with the competition and finally decide, 'enough. Now we want to try out good quality.'"

Author: Astrid Freyeisen /Sarah Berning
Editor: Grahame Lucas