The Chinese Are Coming...To Germany

Selling high-wage Germany to outside investors isn't an easy job these days. Unless, curiously enough, the foreign business executives come from low-wage China. In Hamburg alone, 42 Chinese companies set up shop last year, bringing the total in the city to 360 and feeding a miniboom in Chinese investment in Germany. The state of North Rhine-Westphalia, which includes the city of Düsseldorf, tallies another 100 Chinese outfits. Most are small shipping and trading companies, with just a handful of employees. A small but growing number, though, are manufacturers seeking access to the European market, and they're even beginning to make acquisitions. "Germany is not as bad as people say," says Jiang Zhou, general manager of Welz Gas Cylinder, who praises the technical expertise of German workers. A survey in North Rhine-Westphalia found that Chinese doing business there prized German infrastructure and quality of life, though they complained about taxes. Welz, a maker of pressurized containers used for products such as fire extinguishers and beer kegs, was acquired in 2003 by China's Huapeng Trading, a Hamburg-based importer also managed by Jiang Zhou.

Why would businesspeople from China, with super-low-cost production and compliant workers, want to produce in Germany, with its costly social welfare system and powerful unions? For Huapeng, which already sold Chinese containers to European customers, the acquisition of Welz, which has about 50 employees near Berlin, was an opportunity to provide quicker delivery and servicing, particularly for the high-end market. Pressurized containers made in China can take four weeks to arrive in Europe. That's all right for low-price products. But when customers want quick service, Huapeng needs to be operating in Europe itself.

SHOPPING FOR KNOWHOW 
But it's also clear that the Chinese have something else in mind, acquiring German patents and engineering expertise. That's one reason why China's Shenyang Machine Tool Group recently bought Schiess, a 140-year-old maker of heavy-duty lathes and boring machines based in the East German town of Aschersleben. With 120 employees, Schiess typifies the Mittelstand machine-tool makers that are the backbone of the German economy. But even in East Germany, where wages are lower than the west, a skilled worker earns $2,000 to $2,600 per month, vs $400 to $500 in China, says Schiess Marketing Director Detlef Wolf. Schiess is already transferring production of smaller machinery, Shenyang's specialty, to China. Production of Schiess's core business in heavy-duty machines, where transport costs are a major factor, will remain in Aschersleben, Wolf says.

Meanwhile, Schiess will market Shenyang's smaller machines to Europe, and Shenyang will be able to draw on Schiess' expertise to produce large equipment for the Asian market. "These are very complicated machines, and it takes years to acquire the expertise," Wolf says. If all goes well, Schiess plans to add several dozen workers as it quadruples sales to $100 million by 2008. But the deal will also help China boost its modest but fast-growing machinery exports to Germany, which last year topped $1 billion for the first time, a 34% increase over 2003.

More such deals are likely. International competition has put pressure on weaker players, making them potential targets. Are the Germans getting worried? Right now the country is desperate for investment to spur growth and cut unemployment, which in January reached a postwar high of over 5 million jobless. Net direct investment by foreigners in Germany has been negative since late 2003. In this situation, the Chinese are welcome, especially since they have been mostly bottom feeding. Both Welz and Schiess, for example, were bankrupt when they were acquired. "These companies have problems. The Chinese are saving them," says Welz's Jiang.

China has also become a huge customer for Germany. In just two years, China has vaulted ahead of France, Britain, and Italy to become the No. 2 buyer of German machinery, after the U.S. That's vital to the German economy. Capital goods are the second-biggest category of exports after autos, and one of the most resilient in the face of foreign competition. Orders for German investment goods soared 12.8% in November, confounding the effects of a strong euro.

COPYCATTING 
But China is exporting to Germany, too. Currently, Chinese manufacturers focus on the low and middle markets for capital goods and are 5 to 10 years behind the Germans in high-end machinery, according to a study by the Technical University of Darmstadt and the German Engineering Federation. "We see no direct danger, though naturally we don't know what the situation will look like in 10 years," says Alexander Bitzer, an engineer involved in the study. "Industry should be alert."

There are already signs that the Chinese are wil- ling to play rough. German manufacturers are reporting a sharp increase in cases where their machinery has been copied by Chinese companies. More than half of capital-goods companies surveyed by the German Engineering Federation say they have seen their products copied by foreigners, with Chinese product pirates the main offenders. In some cases, German salespeople have encountered exact copies of their machines on display at trade shows. "For many Chinese companies, research and development consists of how to copy products," says Oliver Wack, area manager for East and South Asia at the engineering federation.

It would be a mistake to underestimate the Chinese, though. Already, Chinese machinery makers increasingly are supplying their home market, particularly in the auto and textile industries, says Reinhard Geissbauer, a partner at Roland Berger Strategy Consultants in Munich who specializes in the capital-goods industry. Geissbauer predicts that the market for German machinery in China has peaked, and that the Chinese will compete more and more for customers in Asia and North America. Only in European markets, where labor is expensive and companies will pay top dollar for the most efficient machinery, are German companies safe -- for a few years, anyway. "The Chinese are not in Western Europe yet, but they are coming," says Geissbauer.

German entrepreneur Max Grundig once remarked that the Japanese would never build a television set. Germans should remember Grundig's mistake. Germany can benefit immensely from a China that invests in the country and buys German products. But German companies would be well-advised to remember that China could someday become a sharp rival as well.

转载于:https://www.cnblogs.com/kaixin110/archive/2008/03/05/1091792.html