The speeches and discussions at the Asia-Pacific Conference in Singapore focus on one topic in particular: How can Germany reduce its economic dependence on China? Malte Kreutzfeldt traveled to Singapore for us and spoke with Siemens CEO Roland Busch on the sidelines of the event.
In an interview, the Chairman of the Asia-Pacific Committee of German Business reveals which countries, in his opinion, could be considered as an alternative to China. These do not necessarily have to be low-cost markets; high-wage countries can also be attractive locations. Read our interview to find out which countries Busch has in mind, what requirements must be met and what his hopes for the German government’s China strategy are.
Meanwhile, shortly ahead of the G20 summit in Bali, the long-awaited meeting between US President Joe Biden and his Chinese counterpart Xi Jinping took place. Both heads of state arrived in Bali with a strong domestic tailwind, and they appeared to be correspondingly self-confident in their approach. As is often the case, both sides spoke afterwards of a good and open exchange.
Finn Mayer-Kuckuk has therefore taken a closer look at both the Chinese and the American explanations and works out the differences in his Feature. Thus, the breaking points become obvious. Just one example: In the case of Taiwan, both agree with the other side – and yet mean different things.
Mr. Busch, the Asia-Pacific Conference in Singapore focuses on how the German economy can reduce its dependence on China. How realistic is this diversification, in your view? Can other markets replace China completely or at least partially?
It’s quite realistic, but it won’t happen in two or three years, but rather in ten or 20, because many of the new markets are very small. You need a lot of staying power to build up a business there. You have to be aware that the return comes much later than with an investment in existing markets. What’s important here is that it’s not a question of getting out of China but of staying there while investing in other markets.
What do you consider to be the most important alternative locations?
In the case of manufacturing technologies, where a large workforce is involved, these will be comparably low-cost markets, for example, Mexico or Eastern Europe. There is also considerable potential for the German economy in South America or Africa. Of course, the Southeast Asian region, where we are right now, and India are also critical. So there is no one market that can compensate. High-wage countries can also be attractive locations if automation and digitization are used. One example is battery production: It is so highly automated that energy costs are more important than labor costs.
Does the diversification strategy also apply to Taiwan? After all, there are major dependencies there as well.
Yes, of the semiconductors in the 10-nanometer range, over 90 percent come from Taiwan. That’s a strong dependency, of course, and it definitely makes sense to address that. This is already happening when you look at the financing and the construction of new manufacturing facilities in the US and Europe.
In the run-up to the conference, the Ministry for Economic Affairs announced that investment protection insurance for companies would be designed so that large investments in China would become less attractive in the future. What do you think of this?
We don’t yet know the details of this new regulation, but we don’t see it as an adjustment aimed specifically at China but rather against cluster risks in the German economy in general. You have to work it out with a sense of proportion so that it works but also keep the scope for supporting large projects that are strategically relevant and relevant for Germany.
And what do you think about the China strategy that the German government plans to finally present soon?
I don’t know the drafts, but we are in a very good dialog process on this. I believe it is important to discuss the relationship rationally rather than emotionally. We need a triad of collaboration, competition and system rivalry. We are an exporting country. We have and will always have to collaborate with other systems. And we should also evaluate business according to the extent to which it helps local people, strengthens our economy and serves our common goals, such as the fight against climate change.
Roland Busch has been Chairman of the Asia-Pacific Committee of German Business since fall 2021. Busch is also Chairman of the Managing Board of Siemens AG.
Joe Biden’s first meeting in his role as US president with Xi Jinping was the top event shortly ahead of the start of the G20 meeting in Bali, Indonesia. The two men already know each other as vice presidents, but due to the pandemic, they had not met in person since the end of the Trump era.
The two most powerful men in the world exchanged views behind closed doors after some public remarks. As always, there are two transcripts of the conversation. In the Chinese side’s version, Xi Jinping comes off better; it sounds as if he lectured Biden extensively about the responsibilities of state leaders to the global community. Naturally, the US version puts the matter differently. In their account, Biden dominates the conversation and sets the agenda.
There are some similarities in the presentation. Accordingly, both sides emphasize to roughly the same extent the importance of cooperation between the two countries in solving global problems. In particular, they acknowledge the importance of the joint fight against global warming. However, they both make it sound like the other side is to blame for the current lack of cooperation. Both agreed to continue face-to-face meetings and to strengthen dialogue at the workinoperational.
Some differences stand out between the two versions. According to the White House, Biden clearly addressed human rights abuses in Xinjiang, Tibet, and Hong Kong. There is no mention of that in the CCTV version. Two topics appear prominently in both transcripts: the Ukraine war and Taiwan. However, the presentation of the results of the talks is very different.
Ukraine: The US side says Xi and Biden agreed that “nuclear war must never be waged” and that Russia’s threats are “irresponsible”. Accordingly, both presidents reiterate their opposition to the “threat of or use of nuclear weapons in Ukraine”.
The topic of nuclear bombs does not appear in the Chinese summary. In it, Xi lectures his colleague in a long discourse about the “four musts” and the “four commonalities”. These are the preservation of territorial integrity, adherence to the UN Charter and the importance of peaceful solutions. At least in this way, a veneer of unity was achieved. And: China did not show itself to be openly pro-Russian here.
Taiwan: According to the Chinese version, Xi called adherence to the One China policy a “red line” that China would not accept being crossed. In doing so, he reverses the usage of language that is currently spreading in the West. There, an attack on Taiwan currently often draws a red line that China would not be allowed to cross with impunity. In the Chinese transcript, Xi’s instruction about the conditions around Taiwan takes up a lot of space. Above all, the three joint Chinese-American communiqués are mentioned (China.Table reported).
Compared to the White House’s account, there is even common ground here. Biden even pledged to Xi to stick to the one-China policy. However, the exact wording weakened this point again: “Our one-China policy has not changed.” This indicates that there is currently a Chinese and an American (“our”) version of the doctrine. In the same breath, Biden opposed “any change to the status quo.” Again, Xi could formally agree without meaning the same thing. For the US, the status quo is the existence of separate states; for China, according to current reading, it implies unity with Taiwan and US non-interference.
Biden, in turn, accused China of an “aggressive stance” toward Taiwan and “coercion.” He refers to the fact that Xi, unlike his predecessors, speaks of annexation of the island as a realistic near-term goal and has this underlined by huge maneuvers in Taiwanese waters (China.Table reported).
According to the Chinese transcript, Xi opposed decoupling and trade wars in a long section of the conversation, citing “technology wars” in particular. This refers directly to Joe Biden’s recent volley of chip sanctions and his attempts to reduce dependencies, which he is pushing even more consistently than Donald Trump (China.Table reported). Xi was therefore incensed that the US is artificially “building walls and barriers” to encourage decoupling. This violates the principles of a market economy. This part of the conversation was again omitted by the US side in its statement.
According to Chinese media reports, Xi hurled several tirades at Biden in typical party-speak, as if the latter cared about the highly coded phrases. There are phrases like, “China has a glorious tradition of tireless self-improvement, and any suppression and containment will only stimulate the will and enthusiasm of the Chinese people.” Accordingly, he lectured Biden that China is a democracy; there are only “specific differences” between the systems. China goes the socialist way, the US goes its capitalist way. The Chinese way, he said, corresponds to the will of 1.4 billion people. And so on.
In contrast to Xi, Biden held a press conference afterwards, in which he put the content of the talks into perspective for the world public. It took place in tropical warmth against a Balinese backdrop. Biden was hoarse because he said he was suffering from a slight cold.
Biden promised “not to let it come to a new Cold War” with China. The US did not seek conflict, even though Biden sees it competing with China. Shortly before, however, he had spoken of the importance of partnership with South Korea, Japan and Australia – three countries that have an interest in containing China’s ambitions.
BMW plans to invest ¥10 billion ($1.4 billion) in the expansion of a battery factory in China. Specifically, this involves increasing the capacity of the battery plant in the northern Chinese province of Liaoning.
The Lydia plant in Shenyang was only opened in June of this year. Even then, according to the company, the plant was the largest single project in the history of the BMW Group in China. It is located in the Tiexi district and has all four major production processes: Press shop, body shop, paint shop and assembly. The Lydia plant will primarily produce high-performance batteries for the i3 and iX3 series cars.
Now the plant will be further expanded. “Today’s contract signing is the latest proof of our confidence in the Chinese market and our commitment to promoting cooperation between China and Germany,” said Jochen Goller, president and CEO of BMW Group Region China, according to a report in the Chinese newspaper China Daily.
Most recently, BMW was able to present strong figures in the third quarter despite the Covid pandemic, supply bottlenecks and the Ukraine war: The German carmaker’s China sales increased by a good 35 percent to €37.2 billion in the period from July to September. BMW thus achieved a bottom-line surplus of €3.18 billion, compared with €2.58 billion in the same period last year (China.Table reported).
BMW has invested more than ¥83 billion in Shenyang alone since 2010 to build a production system that integrates research and development, procurement, and powertrain and vehicle production. According to BMW, Shenyang is now the BMW Group’s largest production base worldwide. rad
Sunglasses, leather jacket and knees bouncing to the beat of the music. This is Christian Sommer – the CEO of the German Centre for Industry and Trade Shanghai – on stage. It is the end of September 2021, in a multi-purpose hall somewhere in Taicang, a city of 500,000 people in the Shanghai suburbs.
Dirndl dresses and lederhosen flit through the aisles. Chinese and German expats toast each other with mugs of beer. The words “Mia San Mia. 16th Taicang Beer Festival” can be read on them. And up in the spotlight, at the end of the beer tent sets, Christian Sommer plucks at the strings of his bass guitar. There are seven of them. Five Germans, one Russian, one Chinese. And here today to electrify the air. Together they are Shang High Voltage.
For Christian Sommer, 59, these opportunities for exchange are essential – in every respect. For his job and privately. Because his German Centre, which the Kiel-born lawyer has been managing since 1999, is not only an important institution for German companies that want to venture into the Chinese market. Above all, it also offers a “meeting place for the German-Chinese community for business and social events”.
The German Centre can offer many things: Help with office rentals, contract reviews, advice on the local economic situation. In the end, however, the human aspects are decisive. Christian Sommer does not see himself as a mere consultant: “People can spill their guts, I remain neutral. We work on the bridge between Germany and China. We have both sides in mind, without wanting to align them.”
Although Sommer is aware of the current political tensions, he still sees China as an attractive business location. That’s because the country has one major advantage. “Everything happens faster,” he says. German over-bureaucratization and nitpicking do not exist in China. Instead, there is an open culture of making mistakes. Just do it. Admit mistakes and react flexibly to the business. That is the motto.
The fact that he has been able to put up with hectic China for so long is mainly thanks to his adaptability and wife and son. “Life here is constantly in motion. And routine is a foreign word.” Sommer finds his inner peace playing table tennis. Of course, as a European in China you need “a little frustration tolerance”. But he loves the sport and goes to practice twice a week.
And last but not least, Christian Sommer plucks the strings of the bass guitar. He and his band Shang High Voltage play rock from Scorpions to Die Toten Hosen to Chinese songs. It’s the mix that makes it. At the beer festival in Taicang, they were able to get both camps dancing – Germans and Chinese. Tim Winter
For the first time since 2009, online retailer Alibaba has not released figures for its “Single’s Day” bargain event. The annual sales race on 11.11. had brought the retailer $84.5 billion in sales last year. This time, Alibaba only let it be known that the 2022 results were comparable. Our picture shows a woman at the parcel conveyor belt of a logistics center in Lanshan/Hubei.
The speeches and discussions at the Asia-Pacific Conference in Singapore focus on one topic in particular: How can Germany reduce its economic dependence on China? Malte Kreutzfeldt traveled to Singapore for us and spoke with Siemens CEO Roland Busch on the sidelines of the event.
In an interview, the Chairman of the Asia-Pacific Committee of German Business reveals which countries, in his opinion, could be considered as an alternative to China. These do not necessarily have to be low-cost markets; high-wage countries can also be attractive locations. Read our interview to find out which countries Busch has in mind, what requirements must be met and what his hopes for the German government’s China strategy are.
Meanwhile, shortly ahead of the G20 summit in Bali, the long-awaited meeting between US President Joe Biden and his Chinese counterpart Xi Jinping took place. Both heads of state arrived in Bali with a strong domestic tailwind, and they appeared to be correspondingly self-confident in their approach. As is often the case, both sides spoke afterwards of a good and open exchange.
Finn Mayer-Kuckuk has therefore taken a closer look at both the Chinese and the American explanations and works out the differences in his Feature. Thus, the breaking points become obvious. Just one example: In the case of Taiwan, both agree with the other side – and yet mean different things.
Mr. Busch, the Asia-Pacific Conference in Singapore focuses on how the German economy can reduce its dependence on China. How realistic is this diversification, in your view? Can other markets replace China completely or at least partially?
It’s quite realistic, but it won’t happen in two or three years, but rather in ten or 20, because many of the new markets are very small. You need a lot of staying power to build up a business there. You have to be aware that the return comes much later than with an investment in existing markets. What’s important here is that it’s not a question of getting out of China but of staying there while investing in other markets.
What do you consider to be the most important alternative locations?
In the case of manufacturing technologies, where a large workforce is involved, these will be comparably low-cost markets, for example, Mexico or Eastern Europe. There is also considerable potential for the German economy in South America or Africa. Of course, the Southeast Asian region, where we are right now, and India are also critical. So there is no one market that can compensate. High-wage countries can also be attractive locations if automation and digitization are used. One example is battery production: It is so highly automated that energy costs are more important than labor costs.
Does the diversification strategy also apply to Taiwan? After all, there are major dependencies there as well.
Yes, of the semiconductors in the 10-nanometer range, over 90 percent come from Taiwan. That’s a strong dependency, of course, and it definitely makes sense to address that. This is already happening when you look at the financing and the construction of new manufacturing facilities in the US and Europe.
In the run-up to the conference, the Ministry for Economic Affairs announced that investment protection insurance for companies would be designed so that large investments in China would become less attractive in the future. What do you think of this?
We don’t yet know the details of this new regulation, but we don’t see it as an adjustment aimed specifically at China but rather against cluster risks in the German economy in general. You have to work it out with a sense of proportion so that it works but also keep the scope for supporting large projects that are strategically relevant and relevant for Germany.
And what do you think about the China strategy that the German government plans to finally present soon?
I don’t know the drafts, but we are in a very good dialog process on this. I believe it is important to discuss the relationship rationally rather than emotionally. We need a triad of collaboration, competition and system rivalry. We are an exporting country. We have and will always have to collaborate with other systems. And we should also evaluate business according to the extent to which it helps local people, strengthens our economy and serves our common goals, such as the fight against climate change.
Roland Busch has been Chairman of the Asia-Pacific Committee of German Business since fall 2021. Busch is also Chairman of the Managing Board of Siemens AG.
Joe Biden’s first meeting in his role as US president with Xi Jinping was the top event shortly ahead of the start of the G20 meeting in Bali, Indonesia. The two men already know each other as vice presidents, but due to the pandemic, they had not met in person since the end of the Trump era.
The two most powerful men in the world exchanged views behind closed doors after some public remarks. As always, there are two transcripts of the conversation. In the Chinese side’s version, Xi Jinping comes off better; it sounds as if he lectured Biden extensively about the responsibilities of state leaders to the global community. Naturally, the US version puts the matter differently. In their account, Biden dominates the conversation and sets the agenda.
There are some similarities in the presentation. Accordingly, both sides emphasize to roughly the same extent the importance of cooperation between the two countries in solving global problems. In particular, they acknowledge the importance of the joint fight against global warming. However, they both make it sound like the other side is to blame for the current lack of cooperation. Both agreed to continue face-to-face meetings and to strengthen dialogue at the workinoperational.
Some differences stand out between the two versions. According to the White House, Biden clearly addressed human rights abuses in Xinjiang, Tibet, and Hong Kong. There is no mention of that in the CCTV version. Two topics appear prominently in both transcripts: the Ukraine war and Taiwan. However, the presentation of the results of the talks is very different.
Ukraine: The US side says Xi and Biden agreed that “nuclear war must never be waged” and that Russia’s threats are “irresponsible”. Accordingly, both presidents reiterate their opposition to the “threat of or use of nuclear weapons in Ukraine”.
The topic of nuclear bombs does not appear in the Chinese summary. In it, Xi lectures his colleague in a long discourse about the “four musts” and the “four commonalities”. These are the preservation of territorial integrity, adherence to the UN Charter and the importance of peaceful solutions. At least in this way, a veneer of unity was achieved. And: China did not show itself to be openly pro-Russian here.
Taiwan: According to the Chinese version, Xi called adherence to the One China policy a “red line” that China would not accept being crossed. In doing so, he reverses the usage of language that is currently spreading in the West. There, an attack on Taiwan currently often draws a red line that China would not be allowed to cross with impunity. In the Chinese transcript, Xi’s instruction about the conditions around Taiwan takes up a lot of space. Above all, the three joint Chinese-American communiqués are mentioned (China.Table reported).
Compared to the White House’s account, there is even common ground here. Biden even pledged to Xi to stick to the one-China policy. However, the exact wording weakened this point again: “Our one-China policy has not changed.” This indicates that there is currently a Chinese and an American (“our”) version of the doctrine. In the same breath, Biden opposed “any change to the status quo.” Again, Xi could formally agree without meaning the same thing. For the US, the status quo is the existence of separate states; for China, according to current reading, it implies unity with Taiwan and US non-interference.
Biden, in turn, accused China of an “aggressive stance” toward Taiwan and “coercion.” He refers to the fact that Xi, unlike his predecessors, speaks of annexation of the island as a realistic near-term goal and has this underlined by huge maneuvers in Taiwanese waters (China.Table reported).
According to the Chinese transcript, Xi opposed decoupling and trade wars in a long section of the conversation, citing “technology wars” in particular. This refers directly to Joe Biden’s recent volley of chip sanctions and his attempts to reduce dependencies, which he is pushing even more consistently than Donald Trump (China.Table reported). Xi was therefore incensed that the US is artificially “building walls and barriers” to encourage decoupling. This violates the principles of a market economy. This part of the conversation was again omitted by the US side in its statement.
According to Chinese media reports, Xi hurled several tirades at Biden in typical party-speak, as if the latter cared about the highly coded phrases. There are phrases like, “China has a glorious tradition of tireless self-improvement, and any suppression and containment will only stimulate the will and enthusiasm of the Chinese people.” Accordingly, he lectured Biden that China is a democracy; there are only “specific differences” between the systems. China goes the socialist way, the US goes its capitalist way. The Chinese way, he said, corresponds to the will of 1.4 billion people. And so on.
In contrast to Xi, Biden held a press conference afterwards, in which he put the content of the talks into perspective for the world public. It took place in tropical warmth against a Balinese backdrop. Biden was hoarse because he said he was suffering from a slight cold.
Biden promised “not to let it come to a new Cold War” with China. The US did not seek conflict, even though Biden sees it competing with China. Shortly before, however, he had spoken of the importance of partnership with South Korea, Japan and Australia – three countries that have an interest in containing China’s ambitions.
BMW plans to invest ¥10 billion ($1.4 billion) in the expansion of a battery factory in China. Specifically, this involves increasing the capacity of the battery plant in the northern Chinese province of Liaoning.
The Lydia plant in Shenyang was only opened in June of this year. Even then, according to the company, the plant was the largest single project in the history of the BMW Group in China. It is located in the Tiexi district and has all four major production processes: Press shop, body shop, paint shop and assembly. The Lydia plant will primarily produce high-performance batteries for the i3 and iX3 series cars.
Now the plant will be further expanded. “Today’s contract signing is the latest proof of our confidence in the Chinese market and our commitment to promoting cooperation between China and Germany,” said Jochen Goller, president and CEO of BMW Group Region China, according to a report in the Chinese newspaper China Daily.
Most recently, BMW was able to present strong figures in the third quarter despite the Covid pandemic, supply bottlenecks and the Ukraine war: The German carmaker’s China sales increased by a good 35 percent to €37.2 billion in the period from July to September. BMW thus achieved a bottom-line surplus of €3.18 billion, compared with €2.58 billion in the same period last year (China.Table reported).
BMW has invested more than ¥83 billion in Shenyang alone since 2010 to build a production system that integrates research and development, procurement, and powertrain and vehicle production. According to BMW, Shenyang is now the BMW Group’s largest production base worldwide. rad
Sunglasses, leather jacket and knees bouncing to the beat of the music. This is Christian Sommer – the CEO of the German Centre for Industry and Trade Shanghai – on stage. It is the end of September 2021, in a multi-purpose hall somewhere in Taicang, a city of 500,000 people in the Shanghai suburbs.
Dirndl dresses and lederhosen flit through the aisles. Chinese and German expats toast each other with mugs of beer. The words “Mia San Mia. 16th Taicang Beer Festival” can be read on them. And up in the spotlight, at the end of the beer tent sets, Christian Sommer plucks at the strings of his bass guitar. There are seven of them. Five Germans, one Russian, one Chinese. And here today to electrify the air. Together they are Shang High Voltage.
For Christian Sommer, 59, these opportunities for exchange are essential – in every respect. For his job and privately. Because his German Centre, which the Kiel-born lawyer has been managing since 1999, is not only an important institution for German companies that want to venture into the Chinese market. Above all, it also offers a “meeting place for the German-Chinese community for business and social events”.
The German Centre can offer many things: Help with office rentals, contract reviews, advice on the local economic situation. In the end, however, the human aspects are decisive. Christian Sommer does not see himself as a mere consultant: “People can spill their guts, I remain neutral. We work on the bridge between Germany and China. We have both sides in mind, without wanting to align them.”
Although Sommer is aware of the current political tensions, he still sees China as an attractive business location. That’s because the country has one major advantage. “Everything happens faster,” he says. German over-bureaucratization and nitpicking do not exist in China. Instead, there is an open culture of making mistakes. Just do it. Admit mistakes and react flexibly to the business. That is the motto.
The fact that he has been able to put up with hectic China for so long is mainly thanks to his adaptability and wife and son. “Life here is constantly in motion. And routine is a foreign word.” Sommer finds his inner peace playing table tennis. Of course, as a European in China you need “a little frustration tolerance”. But he loves the sport and goes to practice twice a week.
And last but not least, Christian Sommer plucks the strings of the bass guitar. He and his band Shang High Voltage play rock from Scorpions to Die Toten Hosen to Chinese songs. It’s the mix that makes it. At the beer festival in Taicang, they were able to get both camps dancing – Germans and Chinese. Tim Winter
For the first time since 2009, online retailer Alibaba has not released figures for its “Single’s Day” bargain event. The annual sales race on 11.11. had brought the retailer $84.5 billion in sales last year. This time, Alibaba only let it be known that the 2022 results were comparable. Our picture shows a woman at the parcel conveyor belt of a logistics center in Lanshan/Hubei.
