Is the first trouble between the Chancellor’s Office and the Foreign Ministry over China policy already brewing? Olaf Scholz seems to want to continue Angela Merkel’s cooperative course. Annalena Baerbock wants to set a somewhat more confrontational tone. But if Germany’s two highest representatives speak with two different voices they will be taken less seriously.
Baerbock has already openly stated her foreign policy ideas in a much-noticed interview. Scholz’s commitment to continuity towards Xi Jinping has only become known thanks to an indiscretion. So it is too early to worry. China has already made its first move. The embassy in Berlin is criticizing Baerbock for her remarks.
What it means not to have a common ground for talks was demonstrated by Beijing at the weekend with the presentation of its “White Paper on Democracy”. This is a reaction to the convening of a “democracy summit” to be held in Washington this week. The propagandists of the People’s Republic aim to take the interpretative sovereignty over the concept of democracy. They point to chaos and populism in parliamentary democracies and extol the virtues of the Chinese style of harmonious involvement of the people in all processes. Michael Radunski has taken a look at the fine details of their arguments.
Hardly anyone knows the reasons why Germany is and remains attractive for Chinese companies better than Feng Xingliang. He was the long-time head of the European branch of Chinese construction machinery manufacturer Sany in Germany before becoming the head of the representative offices of NRW.Global Business in Beijing and Guangzhou, responsible for attracting Chinese investments in Germany’s federal state NRW (North Rhine-Westphalia). In today’s CEO Talk with Frank Sieren, he explains what strengths continue to make Germany a favorable location.
Have a pleasant week!
Feng Xingliang is an expert in bringing Chinese investors to Germany: He heads the representative offices of NRW.Global Business in Beijing and Guangzhou – and North Rhine-Westphalia attracts almost a third of the investments that flow from China to Germany. The 57-year-old has brokered a large part of these himself. Feng gained experience with German hidden champions and as European head of Sany, China’s largest construction machinery manufacturer. In 2009, the then CDU Minister-President Juergen Ruettgers recruited him for Germany’s North Rhine-Westphalia.
Feng talks with China.Table about the appeal of Germany as a business location for Chinese companies and about the mistakes Chinese companies make there. He continues to see a great openness among the German economy to invest in China. The interview was conducted by Frank Sieren. You can watch the full German interview here.
Disclaimer: This interview has been translated into English and is not considered an official translation by any party involved in the interview.
Mr. Feng, are Chinese investors still interested in Germany under these difficult political circumstances?
We still have a lot of investment inquiries from the Chinese side. There are enough Chinese investors who want to go abroad. On the one hand, they want and have to internationalize their businesses – even though it has become harder to invest money overseas because Beijing is looking much more closely at these types of investments than it used to. After all, some Chinese entrepreneurs often just wanted to keep their money safe rather than truly internationalize. They then bought soccer teams, hotel chains, or vineyards. But on the other hand, the Chinese government is aware that China’s companies must become multinational. And between the two poles – capital flight and global player – it now has to weigh.
What is the experience of Chinese companies in Germany?
They had a long learning curve. It began in the 1990s, at about a development stage of a gross domestic product of $5000 per capita measured by purchasing power. During that time, TCL bought Schneider, a traditional television manufacturer. This was not a successful transaction because the objective definition was wrong from the start. TCL was focused on the technical know-how and the strategy to circumvent the European anti-dumping policy, and less on the proper management of the acquired company. But they had no experience in this area. Then they learned more and more, and there was steady growth. Two highlights: construction equipment group Sany acquires German concrete pump manufacturer Putzmeister, the global market leader, in 2012, and home appliance group Midea takes over Augsburg-based robot maker Kuka in 2016.
But then came the slump, the disillusionment.
Yes. The peak came in NRW in 2016 with 96 new branch offices. And the decline in Chinese overseas involvement came from two sides. Beijing is now paying more attention to the quality and sustainability of investments. And the Americans under President Donald Trump began to screen companies more closely. And in Europe, especially in Germany, the debate about the so-called sell-out of Germany began, which prompted the German Ministry of Economics to introduce a review system for stakes higher than 25 percent. Then from 2019 onwards, audits started from ten percent, and the audit period was extended and is now four months.
Are Chinese companies less welcome in Germany?
No, not necessarily, but the honeymoon is over. There was already a major dispute over the robot manufacturer Kuka in 2016. There were no interested parties in the West, the Chinese had placed the highest bid by far and were lured with access to the Chinese market. Those opposed to the sale were convinced that such a key technology should not be sold to China. That made the wave of investment smaller. And as far as NRW is concerned, we are still on the rise, with around a third of all new Chinese branches in Germany by 2021. In 2020, our share was even over 40 percent with 84 new business branches, which means that our share of the total number of new branches in Germany has increased.
How do you manage this?
NRW is Germany’s powerhouse. It generates a good 20 percent of Germany’s economic power. If it were an independent country, it would rank 19th in the world compared to other countries. Right off the bat, I can name at least ten reasons that speak for NRW as an important business and investment location.
But the state capital Dusseldorf is not as renowned in China as Munich, Hamburg, or Berlin.
Dusseldorf is overall very popular with Asians. The Japanese have set this trend. It was said that Dusseldorf was Japan’s largest colony in Europe. Today around 5,000 Japanese are living in Dusseldorf, but in the meantime, there are probably around 4,000 Chinese as well. We Chinese will soon overtake the Japanese. Dusseldorf alone has over 600 Chinese companies.
Which companies are these?
For example, telecom equipment suppliers Huawei and ZTE from Shenzhen and Guangzhou. Or the smartphone providers Xiaomi, Oppo, or Vivo. They all have their European headquarters in Dusseldorf.
How do you convince Chinese companies to come to NRW?
We don’t wait for companies to come to us, we go to them before they even know they want to come to us. We have five offices in China: in Beijing, Shanghai, Nanjing, Guangzhou, and Chengdu, which makes us by far the largest China foreign representative office of a German state, and we actively offer our know-how. Furthermore, we also hold numerous events on topics such as electromobility, artificial intelligence, the energy transition, smart cities, and biotechnology.
If a Chinese entrepreneur or a top executive were to approach you now, how would the conversation go?
Many of our competitors in Europe make the mistake of thinking too small. We say we are located in the heart of Europe: 160 million people live within a radius of 500 kilometers. And we are part of Europe’s leading economy, home to 30 percent of the manufacturing industry alone. As a logistics location, NRW was even ranked number one by the World Bank.
But the great German cars are made elsewhere.
Assembled elsewhere. A third of their suppliers are based in NRW. One-third of a Daimler or BMW is coming from us.
Hasn’t it become harder to promote Germany given the political confrontation between Germany and China and the sanctions?
Yes. The economy is becoming increasingly politicized and ideologized. I think that’s neither good nor necessary, but it’s not surprising. Because the mood has been getting tenser for quite some time. Way back in the 16th century, this country was a model for Europe. Leibniz, Montesquieu and Voltaire were enthusiastic about China. Leibniz even called for the Chinese to help save Germany by sending missionaries to Germany. But then China became economically weak, later communist/socialist and the image bad. Now that China is getting stronger again, the image could once again improve. But the opposite is happening because China is increasingly perceived as a competitor or potential adversary. Not as a role model as it used to be. That is regrettable.
Didn’t Chinese investors themselves also contribute to this by undermining the German companies they bought and transferring their know-how to China?
That happened, but it was at least 15 years ago. The newly rich Chinese who came to Germany didn’t quite know how to behave. They were far too boastful, arrogant, and confident of victory. That has changed in the meantime. Most companies are behaving admirably. The skeptical mood in politics and in parts of the population has remained. This is because China’s new competitors have different ideas and values. The resulting uneasiness is reflected in the media.
But isn’t the concern still justified that if I, as an employee, being acquired by the Chinese, a different wind will very quickly blow within the company.
Of course, the new Chinese owners also want to do things differently. But the question is whether this can really be described with the keyword Manchester capitalism, or whether it has become more social by now. The Chinese call it “socialist market economy”, the Germans “social market economy”.
And the outflow of know-how to China and the bleeding of companies?
I have not heard of such a case in the past 10 to 15 years. On the contrary, the companies want to expand their European business and take over the marketing and service networks of the Europeans. In addition, the know-how is often in the heads of the German employees. But you can’t take them with you.
What other mistakes are Chinese companies making in Germany?
In Germany, Chinese investors should definitely abide by the law; in China, personal relationships play a big role. Another difference is trade unions, which have a lot to say in German companies, even if they don’t own the company. It’s hard to get past them. As a Chinese investor, you are well-advised to address employee rights early on when making an important decision for the company. And the third issue is taxes. Chinese investors always have cute ideas about how to dodge them. They should never be avoided illegally. No matter if the sums are large or small.
You now mediate between cultures. How did you come to Germany? Why did you begin studying German studies?
It was a coincidence that I do not regret. In 1980, I passed the university entrance examination with very good marks. At that time, one could write down five preferred universities. I put Beijing Foreign Studies University first, plus English as a subject and my teacher took the precaution of adding German as an additional subject, which only a few applicants chose. So I was accepted for German. I didn’t regret it and ended up becoming China’s first Ph.D. student in German Studies.
And then you went to Germany on a scholarship in 1989.
While in Germany, I realized that the Old High German and New High German seminars were too impractical and dry for me. I wanted to learn something more in touch with reality. So I switched to economics in Heidelberg. After that, I wanted to earn another Ph.D., with a scholarship from the Friedrich Naumann Foundation. But I had married by then, we had a daughter, and I then decided to work for a German company that was looking for someone for its Asian business.
And then in 2003, after a few stops in between, you landed at Sany, the largest construction machinery manufacturer in China, which at that time ventured into Europe with its machines. That was a big challenge for you, wasn’t it?
Yes, a very, very big challenge. I wasn’t looking for this job. The Sany boss approached me and offered it to me. I hesitated for a moment and then said yes. I made my first appearance at the Bauma 2004 trade fair in Munich, the largest construction machinery trade fair in the world. With 400,000 visitors at the time, it was a gigantic trade fair. And there I was, quite nervous, in its midst with a 150 square meter small booth to display all the machines. And because I was the only one in the company with a foreign passport, I was soon sent all over the world. To Las Vegas, Paris, and various European cities. Later on, Sany always tried to have the biggest booth at every trade fair, if possible.
As someone who has lived in Germany for a long time, was it difficult to work in a Chinese company now?
It was fun, but not always easy. In between, I was bullied so much by a supervisor who wasn’t the brightest and obviously made less than I did, so I left the company. After six months, they brought me back and made me Assistant President so no one could bug me anymore.
And what made you then switch to the investment organization of a German state?
The deciding factors were the then CDU Minister-President Juergen Ruettgers, whom I had met through my Sany investment project, and above all Petra Wassner, my later boss. She made me a good offer. Because they both knew how important China could be for NRW. It was quite progressive at the time. And so I set up their representative office in Beijing.
And what surprised you most there after a long time in Germany?
I noticed how fast the Chinese had become. A business trip was sometimes decided from one hour to the next. They are now very ambitious and value education, money, and career. And some are self-indulgent. They simply increase sales figures tenfold for the coming year, even though they knew those were unrealistic goals, and then see what happens. People change jobs incredibly quickly. And they show their success immediately through clothes, jewelry, and cars. Germans are more modest and frugal.
At this rate, how long will Chinese companies stay interested in German companies at all?
The world will remain multipolar. No country can do everything on its own and will be the best everywhere – not even China. Germany is still the leader in mechanical engineering and other cutting-edge technologies. Even if China continues to catch up, there is still a lot of room for Germany to maneuver. And even then, there will still be specialist areas where the Germans are better. That’s why I think it’s a shame that due to the political confrontations caused by sanctions, the investment agreement between Germany and the EU will not be ratified. But even so, we will not be out of a job. We still have enough to do over the next 20 years. Chinese want and need to continue to invest more abroad. Investment will increase even more.
How do you explain the disagreeing, often clashing EU countries to a Chinese investor?
However, they do wonder about it. They find Brexit regrettable and are astonished that the EU simply accepts it. And they wonder why it is so difficult for Europeans to understand that only by working together will they be strong enough.
Isn’t it an advantage for China if the EU disagrees?
Most Chinese investors do not see it that way. For them, a homogeneous, reliable EU market is more important. And you are quite realistic in your assessment of the EU states. A Chinese minister once told me that he distinguishes between two categories of European states: The small states and the small states that think they are big. That may not be the whole truth, but to me, a unified Europe would be extremely important!
This week, more than 100 countries will meet virtually for the so-called Democracy Summit. The initiator is the US. On the agenda of the virtual summit on December 9 and 10 are the fight against authoritarian systems, the fight against corruption and the promotion of human rights. It is clear which country the leadership in Washington has in mind above all: China.
Naturally, people there are upset (China.Table reported). Thirty years after the end of the Cold War, America again wants to divide the world into “us” and “them”, state news agency Xinhua complains. “Washington has been claiming that the meeting aims to promote the common values of humankind. Really? Just take a look into how the gathering is organized and what it truly plans to discuss. Any sober mind can easily see through the ruse: The event has nothing to do with improving democracy, but is mainly about maintaining America’s global supremacy.”
But China no longer leaves it at such mere verbal criticism. It is going on the offensive in such systemic conflicts. And so last Saturday, the State Council of the People’s Republic presented an official white paper titled “China: Democracy that Works”. The paper introduces China’s own democracy. Its name: 全过程民主 (quánguòchéng mínzhu), which translates as “whole-process people’s democracy.” It is a term first used by President Xi Jinping in Shanghai back in 2019.
“We follow the path of socialist political development with Chinese characteristics, and people’s democracy in China is a Quánguòchéng Mínzhu. All major legislative decisions are made based on scientific and democratic processes, in accordance with procedures and democratic considerations.”
“我们走的是一条中国特色社会主义政治发展道路，人民民主是一种全过程的民主，所有的重大立法决策都是依照程序、经过民主酝酿，通过科学决策、民主决策产生的。希望你们再接再厉，为发展中国特色社会主义民主继续作贡献.”
Since then, whole-process people’s democracy (全过程民主) has been used to refer to the idea that China’s one-party system is basically a unique application of democratic principles. It is a classic example of a fixed expression that has its fixed meaning in the world of the Chinese Communist Party (China.Table reported).
On Saturday, at the launch of the democracy white paper, several Communist Party officials explained the concept of Quánguòchéng Mínzhu (全过程民主) to a wide audience. It was, they said, a “new model of democracy that China has developed”. The assessment of this democracy was provided by the CP officials right away: China’s democracy is “more extensive, genuine and effective” than American democracy.
Tian Peiyan, Vice Director of the Policy Research Office of the CPC Central Committee, elaborated on the contrast with US democracy in Beijing on Saturday: US politicians would make arbitrary promises just to get elected. On the surface, they accept popular control through elections, but in reality, after an election, citizens would no longer have any influence – and would have to helplessly watch the government’s actions until the next election.
In China, according to state political scientist Tian, things are different – and a lot better even: “Party members and leaders at all levels must accept the whole process and all-round supervision of the Party and the people when performing their duties to ensure that the power granted by the people is always used for serving the people’s interest,” Tian explained.
Other Chinese experts back the notion of superior Chinese democracy. Zhu Zheng, professor at the China University of Political Science and Law, is convinced that the concept is certainly difficult for Western observers to understand since the term democracy has long been used in the West only as a cliché and template. In a report for the Chinese television station CGTN, he explains the two focal points of Chinese Quánguòchéng Mínzhu: On the one hand, the people are at the center – and this has been guaranteed by the Communist Party for 100 years now. Secondly, the Chinese system is based on a continuous process. While in the West, citizens are only heard every four or five years shortly before the next round of elections, in China, people not only have the right to vote, but also the right to participate in the decision-making and government process.
At the end of his report, however, Zhu reveals another important aspect of the Chinese “democracy model”: China wants to distinguish itself from the West. The goal is to create a narrative of its own to legitimize and implement reforms.
The term consists of two parts: While “whole-process” is relatively new and defines the relationship between the people and the government within a socialist system with Chinese characteristics, “people’s democracy” acts as a reference to the 人民民主专政 (rénmín mínzhu zhuānzhèng), the “democratic dictatorship of the people” as proclaimed in the preamble of the People’s Republic. In this sense, it means that the Chinese Communist Party represents the state and forms the government on behalf of its people.
Quánguòchéng Mínzhu entered international politics a few weeks ago, when Xi Jinping spoke with his US counterpart Joe Biden on the phone (China.Table reported). During the call, Biden tried to put the dispute between China and the US in a broader context, referring to the struggle between autocracy and democracy. Xi disagreed, saying China is a “whole-process democracy.” Democracy is not a uniform-model (定制的产品 dingzhide chanpin) fit for all countries in the world. And further: “Dismissing forms of democracy that are different from one’s own is in itself undemocratic,” state news agency Xinhua quotes the Chinese president as saying.
To prove the advantages of the Chinese system, China points to the successes of recent years:
This contrasts with the US’s record. Violent crime, massive drug problems, and the country’s ailing infrastructure are mentioned. The storming of the Capitol on January 6 after Donald Trump lost the presidential election is also seen here as an indication of the weakness of the US system.
But the internal condition of America and China would long since not only affect the population in the respective country but would also be reflected in foreign policy. China is so stable and well-governed that it can help more and more countries around the globe with programs such as the Belt and Road Initiative. By contrast, what the United States had done in foreign policy in recent decades was made clear last week by Chinese Foreign Ministry spokesman Wang Wenbin in Beijing. “In the name of promoting democracy, it wantonly slaps unilateral sanctions and went for military intervention in countries including Afghanistan, Iraq, Syria, and Libya, killing hundreds of thousands of civilians, injuring millions, and displacing tens of millions.”
To mark the occasion, the nationalist newspaper Global Times has launched a series on the “true nature of American democracy” which aims to expose the hegemonic sins of US democracy. In a nutshell: War, bloodshed, and chaos in the world.
In light of this, the “democracy summit” initiated by America is nothing more than a farce for China. During a speech at the quickly organized “Dialogue on Democracy”, Vice Foreign Minister Le Yucheng explained America’s true intentions: Some countries have recently been using democracy “as a political tool for selfish gains, and build small blocs to create division and confrontation in the world. This obviously runs against the spirit of democracy.”
Foreign Office spokesman Wang referred in a press conference to a growing number of countries that would share the Chinese view. Media in Egypt, Saudi Arabia, and Israel described the democracy summit as an American tool to interfere in the internal affairs of other countries and secure its hegemony. Beijing is particularly fond of citing a member of the European Union as a key witness in this regard: Hungary. “Hungarian Foreign Minister Peter Szijjarto criticized the “Summit for Democracy” to be hosted by the US, saying it has features of domestic politics of the US,” Wang said.
China’s criticism of the “democracy summit” made international headlines. It comes across as loud and aggressive, but above all it is predictable. Far more important is the process that Xi Jinping set in motion about two years ago and that reached a momentary peak on Saturday with the presentation of a white paper on “Chinese democracy.”
Other words to describe this process would be called “wording” or “framing”; China is busy with creating its own narrative. This means that with its own “model of democracy”, Beijing is setting out to challenge Western interpretive sovereignty over the concept of democracy. The implications could be serious – and reach far beyond the summit in Washington.
“China – Opportunity or Danger?”, “The Yellow Giant” or “The Red Dragon” – Alice Schmatzberger can only roll her eyes at such headlines. China is more than good or evil. She often misses an in-between and the depth of the country in the debate. For this reason, the Austrian co-founded the ChinaCultureDesk in 2013 – a platform that promotes intercultural communication between China and Austria. Together with her colleagues, Schmatzberger aims to display more diverse images of China. To this end, they give lectures, moderate panel discussions, research new developments in the country and write books. Schmatzberger’s book “More than Mozart & Mao! Everyday Stories from Austria and China” (Mehr als Mozart und Mao! Alltagsgeschichten aus Österreich und China). In the book, she and her interviewees look back on 50 years of diplomatic relations between Austria and the People’s Republic.
Schmatzberger found her passion for China on a second attempt. “My first professional life was in the natural sciences,” says the 56-year-old. In the early 1990s, she earned her first degree in biochemistry at the University of Vienna and then worked for many years as an expert in political consulting and science communication. In 2003, inspired by the Italian Renaissance, she began a second degree in art history. “Through a module on non-European art, I then stumbled upon China,” she says, and so into her second professional life. Now, she says, there are three main areas on which she works: art, food, and China. In the latter case, she is particularly interested in environmental concerns, contemporary art, and the philosophy of science.
In 2008, the year of the Olympics, she traveled to China for the first time – an experience that left her amazed. “You read so much about ancient China, and then you end up in modern Shanghai.” By the second day, she says, she knew she would be back. In the meantime, twelve folders with more than 2,000 photos from all the visits have accumulated on her computer.
If you ask Schmatzberger how China has changed in recent years, one observation immediately comes to mind: On each visit, she used to buy masses of books on Chinese art. Then she noticed that some bookstores were suddenly no longer there, or that the range of books on offer had changed considerably. She first took note about six years ago. A look at the country’s history might explain why: “There is always a wavy movement between tighter and more liberal times. Under Xi Jinping, everything is definitely tighter.”
The fact that China was focusing more on itself was also having an impact on relations with Austria. These had become more complicated. On both sides, there is less openness than 50 years ago, when diplomatic relations were established. This is also reflected in her new book. Schmatzberger spoke with people from both nations from the worlds of art, culture, business, science, and the media about their experiences in the other country. What did she learn? Most of the stories are no longer possible today. She was touched by the courage with which people explored the other culture, Schmatzberger said. Travelers and students who unexpectedly got stuck after a few months’ stay – with today’s visa regulations, that’s almost unimaginable – on both sides. Lisa Winter
Crumbling bridges and ramshackle walls – that sounds like a botched construction job, or tofucrumb construction (豆腐渣工程 dòufuzhā gōngchéng), as the Chinese would say. Borrowed from a byproduct of tofu and soy milk production, the figurative term is 豆腐渣 dòufuzhā (literally “tofu crumbs, tofu residue”). The crumbly press residue (also called okara in Japan and pomace in the West when making wine and beer) are made into dishes in China, after all, nothing should go to waste. With the addition of water, seasoning, and all kinds of other things, tasty oatmeal and desserts are created. Of course, the tofu crumbs are not suitable for use in construction (they aren’t actually used). But if there is a crumble or wobble in the construction or if the work was obviously sloppy, the Chinese like to say that “dòufuzhā” served as the building material.
If you want to eat your way up and down the menus in the realm of food, you can’t avoid the word 豆腐 dòufu. In China, tofu fans can feast on various tofu dishes from dawn to dusk. For example, with a bowl of “tofu flowers” (豆腐花 dòufuhuā) for breakfast – a soft tofu pudding that comes in sweet and spicy varieties. At lunch, classics like “home-style tofu” (家常豆腐 jiācháng dòufu) or numbingly spicy “mapo tofu” (麻婆豆腐 mápó dòufu) are on the table. Perhaps accompanied by a tofu soup (豆腐汤 dòufutāng).
For those who like a stronger taste and something a little more unusual, there is the notorious Hunan “stinky tofu” (臭豆腐 chòudòufu). The particularly hardy can also try culinary experiments such as Chongqing “blood tofu” (血豆腐 xiědòufu), which – like our blood sausage – actually uses animal blood (e.g. chicken, goose or pig blood). In the afternoon, instead of coffee and cake, perhaps a cup of tea and a small bowl of fragrant almond tofu (杏仁豆腐 xìngrén dòufu)? Or may it be a special culinary creation like tofu mousse cake (豆腐慕斯蛋糕 dòufu mùsī dàngāo)? Of course, there’s also plenty of tofu bubbling in the evening hotpot! For example, “fish tofu” (鱼豆腐 yúdòufu), “frozen tofu” (冻豆腐 dòngdòufu), pre-fried “tofu bubbles” (豆腐泡 dòufupào) or thin “tofu skin” (豆腐皮 dòufupí). And if you still haven’t had enough tofu, treat yourself to a pack of “dried tofu” (豆腐干 dòufugān) as an evening snack.
Too many culinary tofu tasks to work through? Don’t rush! Just try it piece by piece. As we all know, slow and steady wins the race. Or as the Chinese would say: 心急吃不了热豆腐 xīnjí chībuliǎo rè dòufu – you can’t eat hot tofu with a hasty heart!
Verena Menzel runs the language school New Chinese in Beijing.
Is the first trouble between the Chancellor’s Office and the Foreign Ministry over China policy already brewing? Olaf Scholz seems to want to continue Angela Merkel’s cooperative course. Annalena Baerbock wants to set a somewhat more confrontational tone. But if Germany’s two highest representatives speak with two different voices they will be taken less seriously.
Baerbock has already openly stated her foreign policy ideas in a much-noticed interview. Scholz’s commitment to continuity towards Xi Jinping has only become known thanks to an indiscretion. So it is too early to worry. China has already made its first move. The embassy in Berlin is criticizing Baerbock for her remarks.
What it means not to have a common ground for talks was demonstrated by Beijing at the weekend with the presentation of its “White Paper on Democracy”. This is a reaction to the convening of a “democracy summit” to be held in Washington this week. The propagandists of the People’s Republic aim to take the interpretative sovereignty over the concept of democracy. They point to chaos and populism in parliamentary democracies and extol the virtues of the Chinese style of harmonious involvement of the people in all processes. Michael Radunski has taken a look at the fine details of their arguments.
Hardly anyone knows the reasons why Germany is and remains attractive for Chinese companies better than Feng Xingliang. He was the long-time head of the European branch of Chinese construction machinery manufacturer Sany in Germany before becoming the head of the representative offices of NRW.Global Business in Beijing and Guangzhou, responsible for attracting Chinese investments in Germany’s federal state NRW (North Rhine-Westphalia). In today’s CEO Talk with Frank Sieren, he explains what strengths continue to make Germany a favorable location.
Have a pleasant week!
Feng Xingliang is an expert in bringing Chinese investors to Germany: He heads the representative offices of NRW.Global Business in Beijing and Guangzhou – and North Rhine-Westphalia attracts almost a third of the investments that flow from China to Germany. The 57-year-old has brokered a large part of these himself. Feng gained experience with German hidden champions and as European head of Sany, China’s largest construction machinery manufacturer. In 2009, the then CDU Minister-President Juergen Ruettgers recruited him for Germany’s North Rhine-Westphalia.
Feng talks with China.Table about the appeal of Germany as a business location for Chinese companies and about the mistakes Chinese companies make there. He continues to see a great openness among the German economy to invest in China. The interview was conducted by Frank Sieren. You can watch the full German interview here.
Disclaimer: This interview has been translated into English and is not considered an official translation by any party involved in the interview.
Mr. Feng, are Chinese investors still interested in Germany under these difficult political circumstances?
We still have a lot of investment inquiries from the Chinese side. There are enough Chinese investors who want to go abroad. On the one hand, they want and have to internationalize their businesses – even though it has become harder to invest money overseas because Beijing is looking much more closely at these types of investments than it used to. After all, some Chinese entrepreneurs often just wanted to keep their money safe rather than truly internationalize. They then bought soccer teams, hotel chains, or vineyards. But on the other hand, the Chinese government is aware that China’s companies must become multinational. And between the two poles – capital flight and global player – it now has to weigh.
What is the experience of Chinese companies in Germany?
They had a long learning curve. It began in the 1990s, at about a development stage of a gross domestic product of $5000 per capita measured by purchasing power. During that time, TCL bought Schneider, a traditional television manufacturer. This was not a successful transaction because the objective definition was wrong from the start. TCL was focused on the technical know-how and the strategy to circumvent the European anti-dumping policy, and less on the proper management of the acquired company. But they had no experience in this area. Then they learned more and more, and there was steady growth. Two highlights: construction equipment group Sany acquires German concrete pump manufacturer Putzmeister, the global market leader, in 2012, and home appliance group Midea takes over Augsburg-based robot maker Kuka in 2016.
But then came the slump, the disillusionment.
Yes. The peak came in NRW in 2016 with 96 new branch offices. And the decline in Chinese overseas involvement came from two sides. Beijing is now paying more attention to the quality and sustainability of investments. And the Americans under President Donald Trump began to screen companies more closely. And in Europe, especially in Germany, the debate about the so-called sell-out of Germany began, which prompted the German Ministry of Economics to introduce a review system for stakes higher than 25 percent. Then from 2019 onwards, audits started from ten percent, and the audit period was extended and is now four months.
Are Chinese companies less welcome in Germany?
No, not necessarily, but the honeymoon is over. There was already a major dispute over the robot manufacturer Kuka in 2016. There were no interested parties in the West, the Chinese had placed the highest bid by far and were lured with access to the Chinese market. Those opposed to the sale were convinced that such a key technology should not be sold to China. That made the wave of investment smaller. And as far as NRW is concerned, we are still on the rise, with around a third of all new Chinese branches in Germany by 2021. In 2020, our share was even over 40 percent with 84 new business branches, which means that our share of the total number of new branches in Germany has increased.
How do you manage this?
NRW is Germany’s powerhouse. It generates a good 20 percent of Germany’s economic power. If it were an independent country, it would rank 19th in the world compared to other countries. Right off the bat, I can name at least ten reasons that speak for NRW as an important business and investment location.
But the state capital Dusseldorf is not as renowned in China as Munich, Hamburg, or Berlin.
Dusseldorf is overall very popular with Asians. The Japanese have set this trend. It was said that Dusseldorf was Japan’s largest colony in Europe. Today around 5,000 Japanese are living in Dusseldorf, but in the meantime, there are probably around 4,000 Chinese as well. We Chinese will soon overtake the Japanese. Dusseldorf alone has over 600 Chinese companies.
Which companies are these?
For example, telecom equipment suppliers Huawei and ZTE from Shenzhen and Guangzhou. Or the smartphone providers Xiaomi, Oppo, or Vivo. They all have their European headquarters in Dusseldorf.
How do you convince Chinese companies to come to NRW?
We don’t wait for companies to come to us, we go to them before they even know they want to come to us. We have five offices in China: in Beijing, Shanghai, Nanjing, Guangzhou, and Chengdu, which makes us by far the largest China foreign representative office of a German state, and we actively offer our know-how. Furthermore, we also hold numerous events on topics such as electromobility, artificial intelligence, the energy transition, smart cities, and biotechnology.
If a Chinese entrepreneur or a top executive were to approach you now, how would the conversation go?
Many of our competitors in Europe make the mistake of thinking too small. We say we are located in the heart of Europe: 160 million people live within a radius of 500 kilometers. And we are part of Europe’s leading economy, home to 30 percent of the manufacturing industry alone. As a logistics location, NRW was even ranked number one by the World Bank.
But the great German cars are made elsewhere.
Assembled elsewhere. A third of their suppliers are based in NRW. One-third of a Daimler or BMW is coming from us.
Hasn’t it become harder to promote Germany given the political confrontation between Germany and China and the sanctions?
Yes. The economy is becoming increasingly politicized and ideologized. I think that’s neither good nor necessary, but it’s not surprising. Because the mood has been getting tenser for quite some time. Way back in the 16th century, this country was a model for Europe. Leibniz, Montesquieu and Voltaire were enthusiastic about China. Leibniz even called for the Chinese to help save Germany by sending missionaries to Germany. But then China became economically weak, later communist/socialist and the image bad. Now that China is getting stronger again, the image could once again improve. But the opposite is happening because China is increasingly perceived as a competitor or potential adversary. Not as a role model as it used to be. That is regrettable.
Didn’t Chinese investors themselves also contribute to this by undermining the German companies they bought and transferring their know-how to China?
That happened, but it was at least 15 years ago. The newly rich Chinese who came to Germany didn’t quite know how to behave. They were far too boastful, arrogant, and confident of victory. That has changed in the meantime. Most companies are behaving admirably. The skeptical mood in politics and in parts of the population has remained. This is because China’s new competitors have different ideas and values. The resulting uneasiness is reflected in the media.
But isn’t the concern still justified that if I, as an employee, being acquired by the Chinese, a different wind will very quickly blow within the company.
Of course, the new Chinese owners also want to do things differently. But the question is whether this can really be described with the keyword Manchester capitalism, or whether it has become more social by now. The Chinese call it “socialist market economy”, the Germans “social market economy”.
And the outflow of know-how to China and the bleeding of companies?
I have not heard of such a case in the past 10 to 15 years. On the contrary, the companies want to expand their European business and take over the marketing and service networks of the Europeans. In addition, the know-how is often in the heads of the German employees. But you can’t take them with you.
What other mistakes are Chinese companies making in Germany?
In Germany, Chinese investors should definitely abide by the law; in China, personal relationships play a big role. Another difference is trade unions, which have a lot to say in German companies, even if they don’t own the company. It’s hard to get past them. As a Chinese investor, you are well-advised to address employee rights early on when making an important decision for the company. And the third issue is taxes. Chinese investors always have cute ideas about how to dodge them. They should never be avoided illegally. No matter if the sums are large or small.
You now mediate between cultures. How did you come to Germany? Why did you begin studying German studies?
It was a coincidence that I do not regret. In 1980, I passed the university entrance examination with very good marks. At that time, one could write down five preferred universities. I put Beijing Foreign Studies University first, plus English as a subject and my teacher took the precaution of adding German as an additional subject, which only a few applicants chose. So I was accepted for German. I didn’t regret it and ended up becoming China’s first Ph.D. student in German Studies.
And then you went to Germany on a scholarship in 1989.
While in Germany, I realized that the Old High German and New High German seminars were too impractical and dry for me. I wanted to learn something more in touch with reality. So I switched to economics in Heidelberg. After that, I wanted to earn another Ph.D., with a scholarship from the Friedrich Naumann Foundation. But I had married by then, we had a daughter, and I then decided to work for a German company that was looking for someone for its Asian business.
And then in 2003, after a few stops in between, you landed at Sany, the largest construction machinery manufacturer in China, which at that time ventured into Europe with its machines. That was a big challenge for you, wasn’t it?
Yes, a very, very big challenge. I wasn’t looking for this job. The Sany boss approached me and offered it to me. I hesitated for a moment and then said yes. I made my first appearance at the Bauma 2004 trade fair in Munich, the largest construction machinery trade fair in the world. With 400,000 visitors at the time, it was a gigantic trade fair. And there I was, quite nervous, in its midst with a 150 square meter small booth to display all the machines. And because I was the only one in the company with a foreign passport, I was soon sent all over the world. To Las Vegas, Paris, and various European cities. Later on, Sany always tried to have the biggest booth at every trade fair, if possible.
As someone who has lived in Germany for a long time, was it difficult to work in a Chinese company now?
It was fun, but not always easy. In between, I was bullied so much by a supervisor who wasn’t the brightest and obviously made less than I did, so I left the company. After six months, they brought me back and made me Assistant President so no one could bug me anymore.
And what made you then switch to the investment organization of a German state?
The deciding factors were the then CDU Minister-President Juergen Ruettgers, whom I had met through my Sany investment project, and above all Petra Wassner, my later boss. She made me a good offer. Because they both knew how important China could be for NRW. It was quite progressive at the time. And so I set up their representative office in Beijing.
And what surprised you most there after a long time in Germany?
I noticed how fast the Chinese had become. A business trip was sometimes decided from one hour to the next. They are now very ambitious and value education, money, and career. And some are self-indulgent. They simply increase sales figures tenfold for the coming year, even though they knew those were unrealistic goals, and then see what happens. People change jobs incredibly quickly. And they show their success immediately through clothes, jewelry, and cars. Germans are more modest and frugal.
At this rate, how long will Chinese companies stay interested in German companies at all?
The world will remain multipolar. No country can do everything on its own and will be the best everywhere – not even China. Germany is still the leader in mechanical engineering and other cutting-edge technologies. Even if China continues to catch up, there is still a lot of room for Germany to maneuver. And even then, there will still be specialist areas where the Germans are better. That’s why I think it’s a shame that due to the political confrontations caused by sanctions, the investment agreement between Germany and the EU will not be ratified. But even so, we will not be out of a job. We still have enough to do over the next 20 years. Chinese want and need to continue to invest more abroad. Investment will increase even more.
How do you explain the disagreeing, often clashing EU countries to a Chinese investor?
However, they do wonder about it. They find Brexit regrettable and are astonished that the EU simply accepts it. And they wonder why it is so difficult for Europeans to understand that only by working together will they be strong enough.
Isn’t it an advantage for China if the EU disagrees?
Most Chinese investors do not see it that way. For them, a homogeneous, reliable EU market is more important. And you are quite realistic in your assessment of the EU states. A Chinese minister once told me that he distinguishes between two categories of European states: The small states and the small states that think they are big. That may not be the whole truth, but to me, a unified Europe would be extremely important!
This week, more than 100 countries will meet virtually for the so-called Democracy Summit. The initiator is the US. On the agenda of the virtual summit on December 9 and 10 are the fight against authoritarian systems, the fight against corruption and the promotion of human rights. It is clear which country the leadership in Washington has in mind above all: China.
Naturally, people there are upset (China.Table reported). Thirty years after the end of the Cold War, America again wants to divide the world into “us” and “them”, state news agency Xinhua complains. “Washington has been claiming that the meeting aims to promote the common values of humankind. Really? Just take a look into how the gathering is organized and what it truly plans to discuss. Any sober mind can easily see through the ruse: The event has nothing to do with improving democracy, but is mainly about maintaining America’s global supremacy.”
But China no longer leaves it at such mere verbal criticism. It is going on the offensive in such systemic conflicts. And so last Saturday, the State Council of the People’s Republic presented an official white paper titled “China: Democracy that Works”. The paper introduces China’s own democracy. Its name: 全过程民主 (quánguòchéng mínzhu), which translates as “whole-process people’s democracy.” It is a term first used by President Xi Jinping in Shanghai back in 2019.
“We follow the path of socialist political development with Chinese characteristics, and people’s democracy in China is a Quánguòchéng Mínzhu. All major legislative decisions are made based on scientific and democratic processes, in accordance with procedures and democratic considerations.”
“我们走的是一条中国特色社会主义政治发展道路，人民民主是一种全过程的民主，所有的重大立法决策都是依照程序、经过民主酝酿，通过科学决策、民主决策产生的。希望你们再接再厉，为发展中国特色社会主义民主继续作贡献.”
Since then, whole-process people’s democracy (全过程民主) has been used to refer to the idea that China’s one-party system is basically a unique application of democratic principles. It is a classic example of a fixed expression that has its fixed meaning in the world of the Chinese Communist Party (China.Table reported).
On Saturday, at the launch of the democracy white paper, several Communist Party officials explained the concept of Quánguòchéng Mínzhu (全过程民主) to a wide audience. It was, they said, a “new model of democracy that China has developed”. The assessment of this democracy was provided by the CP officials right away: China’s democracy is “more extensive, genuine and effective” than American democracy.
Tian Peiyan, Vice Director of the Policy Research Office of the CPC Central Committee, elaborated on the contrast with US democracy in Beijing on Saturday: US politicians would make arbitrary promises just to get elected. On the surface, they accept popular control through elections, but in reality, after an election, citizens would no longer have any influence – and would have to helplessly watch the government’s actions until the next election.
In China, according to state political scientist Tian, things are different – and a lot better even: “Party members and leaders at all levels must accept the whole process and all-round supervision of the Party and the people when performing their duties to ensure that the power granted by the people is always used for serving the people’s interest,” Tian explained.
Other Chinese experts back the notion of superior Chinese democracy. Zhu Zheng, professor at the China University of Political Science and Law, is convinced that the concept is certainly difficult for Western observers to understand since the term democracy has long been used in the West only as a cliché and template. In a report for the Chinese television station CGTN, he explains the two focal points of Chinese Quánguòchéng Mínzhu: On the one hand, the people are at the center – and this has been guaranteed by the Communist Party for 100 years now. Secondly, the Chinese system is based on a continuous process. While in the West, citizens are only heard every four or five years shortly before the next round of elections, in China, people not only have the right to vote, but also the right to participate in the decision-making and government process.
At the end of his report, however, Zhu reveals another important aspect of the Chinese “democracy model”: China wants to distinguish itself from the West. The goal is to create a narrative of its own to legitimize and implement reforms.
The term consists of two parts: While “whole-process” is relatively new and defines the relationship between the people and the government within a socialist system with Chinese characteristics, “people’s democracy” acts as a reference to the 人民民主专政 (rénmín mínzhu zhuānzhèng), the “democratic dictatorship of the people” as proclaimed in the preamble of the People’s Republic. In this sense, it means that the Chinese Communist Party represents the state and forms the government on behalf of its people.
Quánguòchéng Mínzhu entered international politics a few weeks ago, when Xi Jinping spoke with his US counterpart Joe Biden on the phone (China.Table reported). During the call, Biden tried to put the dispute between China and the US in a broader context, referring to the struggle between autocracy and democracy. Xi disagreed, saying China is a “whole-process democracy.” Democracy is not a uniform-model (定制的产品 dingzhide chanpin) fit for all countries in the world. And further: “Dismissing forms of democracy that are different from one’s own is in itself undemocratic,” state news agency Xinhua quotes the Chinese president as saying.
To prove the advantages of the Chinese system, China points to the successes of recent years:
This contrasts with the US’s record. Violent crime, massive drug problems, and the country’s ailing infrastructure are mentioned. The storming of the Capitol on January 6 after Donald Trump lost the presidential election is also seen here as an indication of the weakness of the US system.
But the internal condition of America and China would long since not only affect the population in the respective country but would also be reflected in foreign policy. China is so stable and well-governed that it can help more and more countries around the globe with programs such as the Belt and Road Initiative. By contrast, what the United States had done in foreign policy in recent decades was made clear last week by Chinese Foreign Ministry spokesman Wang Wenbin in Beijing. “In the name of promoting democracy, it wantonly slaps unilateral sanctions and went for military intervention in countries including Afghanistan, Iraq, Syria, and Libya, killing hundreds of thousands of civilians, injuring millions, and displacing tens of millions.”
To mark the occasion, the nationalist newspaper Global Times has launched a series on the “true nature of American democracy” which aims to expose the hegemonic sins of US democracy. In a nutshell: War, bloodshed, and chaos in the world.
In light of this, the “democracy summit” initiated by America is nothing more than a farce for China. During a speech at the quickly organized “Dialogue on Democracy”, Vice Foreign Minister Le Yucheng explained America’s true intentions: Some countries have recently been using democracy “as a political tool for selfish gains, and build small blocs to create division and confrontation in the world. This obviously runs against the spirit of democracy.”
Foreign Office spokesman Wang referred in a press conference to a growing number of countries that would share the Chinese view. Media in Egypt, Saudi Arabia, and Israel described the democracy summit as an American tool to interfere in the internal affairs of other countries and secure its hegemony. Beijing is particularly fond of citing a member of the European Union as a key witness in this regard: Hungary. “Hungarian Foreign Minister Peter Szijjarto criticized the “Summit for Democracy” to be hosted by the US, saying it has features of domestic politics of the US,” Wang said.
China’s criticism of the “democracy summit” made international headlines. It comes across as loud and aggressive, but above all it is predictable. Far more important is the process that Xi Jinping set in motion about two years ago and that reached a momentary peak on Saturday with the presentation of a white paper on “Chinese democracy.”
Other words to describe this process would be called “wording” or “framing”; China is busy with creating its own narrative. This means that with its own “model of democracy”, Beijing is setting out to challenge Western interpretive sovereignty over the concept of democracy. The implications could be serious – and reach far beyond the summit in Washington.
“China – Opportunity or Danger?”, “The Yellow Giant” or “The Red Dragon” – Alice Schmatzberger can only roll her eyes at such headlines. China is more than good or evil. She often misses an in-between and the depth of the country in the debate. For this reason, the Austrian co-founded the ChinaCultureDesk in 2013 – a platform that promotes intercultural communication between China and Austria. Together with her colleagues, Schmatzberger aims to display more diverse images of China. To this end, they give lectures, moderate panel discussions, research new developments in the country and write books. Schmatzberger’s book “More than Mozart & Mao! Everyday Stories from Austria and China” (Mehr als Mozart und Mao! Alltagsgeschichten aus Österreich und China). In the book, she and her interviewees look back on 50 years of diplomatic relations between Austria and the People’s Republic.
Schmatzberger found her passion for China on a second attempt. “My first professional life was in the natural sciences,” says the 56-year-old. In the early 1990s, she earned her first degree in biochemistry at the University of Vienna and then worked for many years as an expert in political consulting and science communication. In 2003, inspired by the Italian Renaissance, she began a second degree in art history. “Through a module on non-European art, I then stumbled upon China,” she says, and so into her second professional life. Now, she says, there are three main areas on which she works: art, food, and China. In the latter case, she is particularly interested in environmental concerns, contemporary art, and the philosophy of science.
In 2008, the year of the Olympics, she traveled to China for the first time – an experience that left her amazed. “You read so much about ancient China, and then you end up in modern Shanghai.” By the second day, she says, she knew she would be back. In the meantime, twelve folders with more than 2,000 photos from all the visits have accumulated on her computer.
If you ask Schmatzberger how China has changed in recent years, one observation immediately comes to mind: On each visit, she used to buy masses of books on Chinese art. Then she noticed that some bookstores were suddenly no longer there, or that the range of books on offer had changed considerably. She first took note about six years ago. A look at the country’s history might explain why: “There is always a wavy movement between tighter and more liberal times. Under Xi Jinping, everything is definitely tighter.”
The fact that China was focusing more on itself was also having an impact on relations with Austria. These had become more complicated. On both sides, there is less openness than 50 years ago, when diplomatic relations were established. This is also reflected in her new book. Schmatzberger spoke with people from both nations from the worlds of art, culture, business, science, and the media about their experiences in the other country. What did she learn? Most of the stories are no longer possible today. She was touched by the courage with which people explored the other culture, Schmatzberger said. Travelers and students who unexpectedly got stuck after a few months’ stay – with today’s visa regulations, that’s almost unimaginable – on both sides. Lisa Winter
Crumbling bridges and ramshackle walls – that sounds like a botched construction job, or tofucrumb construction (豆腐渣工程 dòufuzhā gōngchéng), as the Chinese would say. Borrowed from a byproduct of tofu and soy milk production, the figurative term is 豆腐渣 dòufuzhā (literally “tofu crumbs, tofu residue”). The crumbly press residue (also called okara in Japan and pomace in the West when making wine and beer) are made into dishes in China, after all, nothing should go to waste. With the addition of water, seasoning, and all kinds of other things, tasty oatmeal and desserts are created. Of course, the tofu crumbs are not suitable for use in construction (they aren’t actually used). But if there is a crumble or wobble in the construction or if the work was obviously sloppy, the Chinese like to say that “dòufuzhā” served as the building material.
If you want to eat your way up and down the menus in the realm of food, you can’t avoid the word 豆腐 dòufu. In China, tofu fans can feast on various tofu dishes from dawn to dusk. For example, with a bowl of “tofu flowers” (豆腐花 dòufuhuā) for breakfast – a soft tofu pudding that comes in sweet and spicy varieties. At lunch, classics like “home-style tofu” (家常豆腐 jiācháng dòufu) or numbingly spicy “mapo tofu” (麻婆豆腐 mápó dòufu) are on the table. Perhaps accompanied by a tofu soup (豆腐汤 dòufutāng).
For those who like a stronger taste and something a little more unusual, there is the notorious Hunan “stinky tofu” (臭豆腐 chòudòufu). The particularly hardy can also try culinary experiments such as Chongqing “blood tofu” (血豆腐 xiědòufu), which – like our blood sausage – actually uses animal blood (e.g. chicken, goose or pig blood). In the afternoon, instead of coffee and cake, perhaps a cup of tea and a small bowl of fragrant almond tofu (杏仁豆腐 xìngrén dòufu)? Or may it be a special culinary creation like tofu mousse cake (豆腐慕斯蛋糕 dòufu mùsī dàngāo)? Of course, there’s also plenty of tofu bubbling in the evening hotpot! For example, “fish tofu” (鱼豆腐 yúdòufu), “frozen tofu” (冻豆腐 dòngdòufu), pre-fried “tofu bubbles” (豆腐泡 dòufupào) or thin “tofu skin” (豆腐皮 dòufupí). And if you still haven’t had enough tofu, treat yourself to a pack of “dried tofu” (豆腐干 dòufugān) as an evening snack.
Too many culinary tofu tasks to work through? Don’t rush! Just try it piece by piece. As we all know, slow and steady wins the race. Or as the Chinese would say: 心急吃不了热豆腐 xīnjí chībuliǎo rè dòufu – you can’t eat hot tofu with a hasty heart!
Verena Menzel runs the language school New Chinese in Beijing.
