German Chamber Of Commerce Said: China'S Market Attractiveness And Potential Far Outweigh Difficulties.

Germany is China's most important trading partner in Europe, while China is Germany's most important trading partner in the Asia Pacific region, even more than Japan.

"From today's success, Sino German trade relations have gone through a period of rapid development."

Jutta Ludwig, chief representative of the Beijing Representative Office of the German Chamber of Commerce, said in an interview with our reporter.

At the same time, Jutta Ludwig, who has the learning experience of University of Hamburg and Taipei University, has been involved in the East West trade cooperation for a long time. She has worked in the Wuppertal Institute on climate, environment and energy, and has published several research articles on China's economic and environmental issues.

In 2003, she began working in the Beijing Representative Office of the German Chamber of Commerce, serving as the chief representative and the executive director of the entire chamber of Commerce in China.

Looking back on the 30 years that German enterprises invested in China, Ms. Ludwig listed us a group of impressive data.

According to data from the German Federal Statistical Office, trade between China and Germany reached 76 billion euros in 2006, three times that of 2000.

Thirty percent of them are Germany's exports to China.

According to the statistics of GIC, about 3500 German investment companies and representative offices are actively participating in the process of modernization of science and technology in China.

At the same time, she maintains a certain degree of optimism for the future: "the attraction and potential of the Chinese market is far greater than the difficulty of doing business in China."

In the German Chamber of Commerce survey, "preparing for growth" is the state of most German enterprises in China.

Economic Observer: can you introduce the general situation of Sino German trade published by German institutions, including the amount of direct investment, the number and focus of projects, and the proportion of German direct investment in China to its total overseas investment.

In Jutta Ludwig:1972, German enterprises exported only $270 million.

Today, this number is 100 times that of it.

In 1972, Germany imported $175 million and imports amounted to about $85 billion in 2007.

The bilateral trade volume between China and Germany reached US $131 billion in 2007.

The total import volume was 84 billion 600 million US dollars, up 9.3% over the same period last year.

Total exports amounted to $46 billion 300 million, accounting for 3.1% of Germany's total exports.

Compared with 2006, it increased by 8.8%.

At present, more than 15% of the machines imported from China come from Germany, and about 30% of the imported motor vehicles and spare parts imported from China come from Germany.

Every year, about 400 new German companies will enter the Chinese market.

At present, there are 3563 German companies registered in mainland China.

This year, about 1/3 of German companies investing overseas choose the Chinese market as their investment target.

So far, German companies have a total of about 11 billion euros in China, excluding the reinvestment of German companies in China.

In 2007, they invested $773 million 970 thousand, which was equivalent to 1% of the total foreign direct investment in Germany in the year.

Investment projects are mainly concentrated in machinery manufacturing, automation, consumer goods and chemical industry.

Economic Observer: can you tell me what changes have been made in the field and region of German investment in China in the past thirty years?

Is there any structural adjustment?

Can you introduce the characteristics of each stage?

In Jutta Ludwig:1980, the automobile industry was mainly distributed in Shanghai, and the center of gravity shifted to northern China in 90s.

Jiangsu has become a region favored by the textile industry.

It is worth mentioning that the headquarters of many companies are mainly located in Beijing today, because it is more suitable for producing high-tech and sophisticated products.

Nowadays, most German companies in China belong to the manufacturing industry.

However, trade and services are also an important part of the growing German investment.

According to this trend, the number of new trade and service enterprises will be as large as that of manufacturing enterprises by 2010.

The main reason for this increase is that the Chinese government has opened trade, logistics, finance and insurance industries to foreign investors.

In addition, manufacturers have greatly increased their sales and services in China.

The structure of our member enterprises is also different in different regions. For example, the member enterprises in Shanghai and Guangzhou are mostly production oriented enterprises compared with Beijing, mainly engaged in the production of machinery, automobile, consumer goods and chemical industry.

Economic Observer: what is the most significant change in China's investment environment over the past thirty years? What are the benefits or dissatisfaction of German enterprises?

What is the most important concern of German enterprises in formulating their investment strategy in China?

Jutta Ludwig: China's investment conditions have been gradually improved, and the Chinese government is also concerned about further improvements.

Therefore, it is relatively easy to set up a company now, and it is easier for stock holders to enjoy more information, credit business becomes more pparent, and the protection of property rights is also determined by law.

In the coming years, the government plans to simplify the tax system and facilitate approval procedures.

China's accession to the WTO in December 2001 has greatly accelerated the opening up of the Chinese market, but there are also some barriers to entry, such as restrictions on cooperative enterprises and restrictions on the share of foreign capital in certain industries.

Both Germany and China need innovation, development and research strategies to ensure the stability and sustainable development of the economy.

The framework of domestic and international protection and innovation is more important. Intellectual property protection is one of the major concerns of German enterprises investing in China.

The regulation of technology pfer should be the main work to improve the investment environment at present.

In addition to big companies, many German middle professional companies are also keen to enter the Chinese market.

At present, the main business of establishing a business in China is "selling China as a market".

German companies expect their investment and business theories to bring about shifts in quantity and quality, especially through the expansion of sales market and cost savings.

Economic Observer: can we use data to illustrate how much German enterprises benefit from China's economic growth, Germany's gross domestic product in China and the employment problem solved?

Jutta Ludwig: according to the German Federal Statistical Bureau, the trade volume between China and Germany reached 76 billion euros in 2006, three times that of 2000.

Thirty percent of them are Germany's exports to China.

Compared with 2005, Germany's exports to China (30%) in 2006 were higher than China's exports to Germany (23%).

Since China opened its market to multinational corporations, German enterprises have supported China's economy.

According to the statistics of GIC, about 3500 German investment companies and representative offices are actively participating in the process of modernization of science and technology in China.

For the future, we believe that not only new German companies will continue to enter the Chinese market, but 90% of the companies that have entered the Chinese market are planning to expand.

In our investigation, no matter what fields, legal forms, scale of operations, scale of German parent companies, or market experience, the growth of enterprises in Germany is currently in the majority of German enterprises in China.

All in all, the attraction and potential of the Chinese market is far greater than the difficulty of doing business in China.

Economic Observer: can you tell us about the changes in technology pfer of German enterprises in China over the past thirty years through data and examples?

This is considered to be an important aspect of German enterprises' investment in China.

Jutta Ludwig: according to the survey conducted by GIC and EAC, although the technology level is slightly lower, local R & D will increase significantly in the next few years.

56% of German manufacturers plan to strengthen their R & D capabilities in China, integrate local R & D and global action, and enhance their concerns about the Chinese market.

In October 2003, the Federal Republic of Germany and China signed the agreement on Intergovernmental scientific and technological cooperation 25th anniversary.

In the late 1970s and early 80s, the initial cooperation was mainly limited to the links and visits among individual scientists; later, the second phase of project cooperation increased; on this basis, institutional cooperation began to take shape, and a series of joint research institutions were established in 2004 and 2005.

The main participants in Germany are the Federal Ministry of education and research. China is the Ministry of science and technology and the Ministry of education.

The Sino German science promotion center in Beijing was established and successfully operated by the German Research Foundation and the National Natural Science Foundation of China.

In addition, Fraunhofer Society has collaborated with the hi tech research and development center to set up two research institutes: the Sino German Joint Software Institute, which is headquartered in Beijing, and the Sino German Mobile Communication Research Institute in Berlin.

China and Germany continue to develop in many fields, including high-tech industries and environmental basic research.

According to the statistics of the national development and Reform Commission, China's major technology imports are from Germany.

The main technology pfer is in the field of automobile industry, railway, machinery and equipment manufacturing.

A successful example is that in 70s and 80s, China's textile production equipment depended on imports. Now China has fully mastered the technology.

Economic Observer: how can German enterprises cope with China's rising costs and inflation?

What is the impact of these on foreign trade in China?

Have German companies faced similar difficulties?

How to tide over difficulties?

Can you give some suggestions to Chinese enterprises?

Jutta Ludwig: the increase of total cost stems from the increase of raw material cost and manpower cost.

Therefore, it is very important to improve efficiency and improve the production process.

Because German companies are well prepared for this, they can cope well with cost increases.

Chinese companies should also take measures to improve the efficiency of raw materials and energy use in the production process.

Raising energy costs can be seen as an important and positive measure taken by the Chinese government to achieve sustainable, ecological and responsible production in order to reduce pollution.

The goal of improving energy efficiency and improving environmental quality provides a good opportunity for foreign investment in the field of renewable energy and energy saving technology.

Chinese companies should also attach importance to technological modernization and improve efficiency in order to cope with rising costs.

In the long run, Chinese companies will benefit a lot from the modern domestic market economy that achieves international standards.

Learning to compete in an open and pparent market economy is the best preparation for Chinese companies to successfully enter the foreign market in the future.

German government organizations and institutions, the German business community will continue and strengthen cooperation with China, in order to reduce barriers and barriers to investment in China, such as vocational training and other help.