The continuing public criticism of the European-Chinese investment agreement (CAI) is apparently prompting Beijing to take confidence-building measures. The Chinese government wants to “promote the liberalization and facilitation of trade and investment”, Premier Li Keqiang told thirty high-ranking representatives of European companies at a virtual meeting on Friday. All sides should meet “halfway” to do so, he said.
The Ministry of Foreign Affairs also let know who listened to the words of the Prime Ministerin extracts after the meeting: Volvo, Airbus, JCDecaux, AstraZeneca, L’Oreal, BASF and SAP – the crème de la crème of European business. That’s how you send messages to your negotiating partners in Brussels.
And the most direct way to do it is this: None other than Zhang Ming spoke directly to the members of the European Parliament’s Committee on International Trade. The Chinese EU ambassador, participants in the internal committee meeting recalled, had promised in “big words” that Beijing would adhere to all the obligations laid down in the CAI and would push ahead with the controversial ILO provisions on forced labor.
Whether the round of such friendly messages will continue at tomorrow’s meeting of the 17 Central and Eastern European states and China (17+1 format) is questionable, however. Amelie Richter has taken a look behind the scenes of the summit diplomacy – and observed mostly disgruntlement.
Is the Chinese man too effeminate? That is the subject of a social debate that is spreading ever wider. Conservative politicians demand to oppose an alleged trend towards the “feminization” of young men. For now, the Ministry of Education has responded with a basically innocuous regulation: It is strengthening physical education classes nationwide.
However, in a poll conducted by the Phoenix news portal, 64 percent of respondents believe the country’s male youth need “masculine education“. The question in the same polls about whether China’s youth need “heterosexualization” is concerning. More than half of the respondents agreed, with only 30 percent clearly rejecting the idea. While this is only one portal’s poll, it is still based on one million participants. The coverage in Chinese media shows along which lines the discussion is running. It revolves primarily around the term “yanggang” (阳刚), which is composed of the character for “male” (known from “yin and yang”) and the one for “hard, strong, powerful”. Meanwhile, the state media tries to boil down the debate. “Masculinity” should not be about emphasizing gender differences but about developing healthy physiques and inner strength, commented the Xinhua news agency.
Business CEO Si Zefu sparked the debate last May with a political push. Si is the head of the utility company Dongfang Electric. In his capacity as a deputy to the Chinese People’s Political Consultative Conference, he had diagnosed a “crisis of masculinity”. In a draft resolution, he claimed China’s boys have become too “delicate, timid and effeminate”. The “effeminate” generation of young men was now a “danger to the continued existence of the Chinese people”.
Si’s views could now be dismissed as the views of a right-wing nutcase, as they are in all countries. But his submission was accepted by the Consultative Conference at the time, so the education ministry now had to present a plan to counter the perceived effeminacy – certainly a challenge for modern school policymakers. The pressure to act has culminated in the Orders for Strengthening Physical Education at the end of January. It is linked to a call for physical education teachers to also pay attention to education for masculinity. What that means in concrete terms is left up to the individual educator.
The origins of the concerns can be traced to some extent. In Japan, South Korea and Taiwan, there has been a corresponding trend for a long time: A majority of young men there have had a rather flexible view of the male role since the nineties. The greatest success in the music scene is enjoyed by boy groups consisting of androgynous boys who are great dancers. Many young men there now also pay a lot of attention to their appearance, plucking their eyebrows, spending a lot of money on hairdressing and keeping up with fashion trends. They are not questioning their gender at all. But they have developed a notion of masculinity that is not just about toughness and intransigence. So conservatives there have also been complaining for years that men are becoming more unmanly. (Much to the chagrin of Japanese and South Korean women, however, that doesn’t necessarily mean they’re enthusiastically washing dishes and swaddling kids).
In China – presumably under the influence of South Korean youth culture – a pop scene has also developed that mainly produces handsome, rather slenderly built male stars. These usually have milk-white, smooth skin and silky hair. Si Zefu promptly problematized the trend toward these idols (Naiyou-Xiaosheng). He thinks the youth should once again look to “fighting heroes” (Zhandou-Yinxiong) instead. Websites at home and abroad that report on the topic often illustrate the idea with the sinewy, muscular elite soldiers from the infamous “Wolf Warrior” film series, the Chinese counterpart to Rambo.
Si himself sees one cause of the alleged effeminacy in the one-child policy under which parents and grandparents “coddled” their children. He believes he can reinvigorate masculinity in the country by making changes in the teaching force. He says it is fatal that mostly women teach in kindergartens and primary schools. This causes mama’s boys, he said. He believes boys need more male role models.
Chinese experts are critical of this line of thinking. Sociologist Wu Lixuan of Peking University sees Si’s proposal mainly as a stringing together of stereotypes. “Overemphasis on masculinity can also be harmful.” There are simply different characters, he says – and society offers tasks for outwardly strong men as well as for those who conform less to classic role models. The latter should not be persuaded that they are “feminine”.
Sex researcher Fang Gang of Linye University in Beijing expresses concern, saying the government is breeding toxic masculinity simply by taking such proposals seriously. “Men need to be aggressive to be able to overpower women,” Fang tells the South China Morning Post. “Men who are afraid of not coming across as manly enough tend to show their strength through violence.” LGBT groups, meanwhile, are asking what’s actually wrong with appearing feminine.
Congressman Si also seems to have overlooked the fact that the trend toward the well-groomed man has done nothing to diminish South Korea’s economic strength. It ran parallel to the rise of Samsung and Hyundai as global market leaders and a huge increase in economic performance. Japanese and South Korean comics, movies, music and other cultural goods are also in high demand worldwide. They spread a positive image of these countries among young people. China’s image is also likely to benefit more from elegant manga boys than wolf warriors.
For years, there has been constant speculation that a debt bubble could burst in China. Forbes predicted in 2016 that “big bubbles would burst” in China the following year, BusinessInsider saw “a wild debt boom which fueled rapid growth for China and emerging markets ‘may already have burst’” (2019), the South China Morning Post asked, “Will China’s debt-fuelled economic bubble eventually pop?” (2020). These texts were gladly garnished with statistics showing rising private and government debt. The theoretical content behind them is mostly thin. This is by no means surprising. After all, anyone who could accurately predict financial crises would quickly become a billionaire. Will there be a financial crisis in China? Very likely, yes. When? That is almost impossible to predict.
Much more important than the question of if and when a financial crisis will come is probably the question of whether the Chinese government could deal with it. The last major financial crisis of 2008/09 was overcome relatively quickly in China. The fiscal stimulus of the equivalent of more than $500 billion was sufficient to get the economy going again. The political will to expand government spending was there, unlike in the eurozone, which imposed austerity programs on national governments. Thus, even in 2019, Greece and Italy had not reached their respective 2007 output levels. The question now is whether a financial crisis in China could overwhelm the Chinese government. Will it run out of money in the event of a major financial crisis – as was the case in Greece in the aftermath of the 2007-08 financial crisis? Is the government’s debt threatening to cut off its air?
Hardly. Because the Chinese government is not limited in its spending in Chinese currency. The People’s Bank of China (PBoC) and the Chinese government are institutionally highly intertwined. It is, therefore, inconceivable that the PBoC would refuse to pay for Chinese government spending in a crisis.
To understand this more clearly, we need to look at how governments spend money. While textbooks assume that governments finance themselves through taxes, government bonds or the printing press, the reality is different. A state’s central bank – in this case, the People’s Bank of China – is the creator of the currency because it manages the payments system. This is a massive spreadsheet in which a country’s central bank enters who has how much yuan, US dollars or euros. The money in central bank accounts is called reserves. These reserves can be exchanged for cash. So private and state banks, as well as government agencies, keep accounts at the central bank. They use reserves to obtain cash for their customers and to carry out their transfers. The central bank can increase these accounts according to its rules if, for example, banks borrow reserves from the central bank against collateral.
It is important to know: The central bank – on behalf of the respective ministry of finance – pays the bills of the respective national government by increasing the credit balance on a bank account. The bank, in turn, increases the credit balance in the account of the recipient (company or individual) and settles the bill. For this process, a government does not have to issue bonds or collect taxes. In this process, it is also inconceivable that the PBoC would refuse to make payments from the Chinese central government. The chairman of China’s State Council nominates the governor and deputy governor of the central bank. The political will to fight a financial crisis will probably be there. But what happens if it were to become the biggest financial crisis in human history?
Mosler’s Law, named after the mastermind of Modern Monetary Theory (MMT), Warren Mosler, states: “No financial crisis is so severe that a sufficiently large increase in public spending cannot overcome it”. So for China, this also means that a financial crisis would not automatically lead to a collapse of the Chinese economy. The collapse in household and business spending on goods and services would reduce demand for them. The government, however, can compensate for this by spending additional amounts as necessary. The resulting deficits and government debt are unproblematic because the government can always obtain currency through its central bank. A default is unthinkable. This is also in line with Chinese economic policy. In an article in the journal The Chinese Economy, Lili Li, Hanyu Tan, and Hongmei Zhang write about the 1980s, “Because the PBoC was affiliated or subordinate to the Ministry of Finance, the two formed a de jure ‘consolidated government.’” So China is familiar with the situation where the central bank pays for government spending and the Ministry of Finance “wears the pants.”
The authors go on to write that fiscal policy is still relevant in China and that state money creation is still possible. The authors describe that the PBoC has not been independent of the Ministry of Finance in recent decades. Likewise, they elaborate that fiscal policy is responsible for straightening out income distribution. This means that, especially after a financial crisis, it would be very important for the government to stabilize private incomes with its spending. The authors also emphasize the relevant countercyclical component of fiscal policy: in bad times, additional government spending – in the face of falling private spending, hence countercyclical – can ensure that output and employment are stabilized. In good times, the government can increase spending weakly to not fuel inflation. The Chinese government thus has sufficient economic policy instruments at its disposal to cushion the consequences of a financial crisis, regardless of its size.
The “Chinese century” proclaimed by Wolfram Elsner could be expected to happen with or without a financial crisis. A financial crisis only reduces numbers on balance sheets. Wealth, on the other hand, would remain: Machines and factories, real estate and infrastructure. In China, this prosperity is based less and less on the export model and more and more on domestic consumption. In many sectors, Chinese companies are already technological leaders (solar industry), and in others, they are catching up fast (EVs). So China is well advanced on the development path. The biggest threat to Chinese prosperity in the medium to long term is probably climate change. Economic development has contributed to an increase in CO2 emissions. Air pollution is also a problem in China. If fossil fuels have to be abandoned in the future, China will be forced to greatly expand alternative energy sources. Since the country is a leader in the solar industry, the conditions for this are not so bad. In this respect, a possible financial crisis could even be used as an opportunity for an ecological restructuring of the Chinese economy.
Dr. Dirk Ehnts is an economist and political scientist living in Berlin. He is the spokesman for the board of the non-profit association Pufendorf-Gesellschaft e.V. which aims to educate people about how the banking and financial system works. His book “Geld und Kredit: eine €-päische Perspektive” explains the money creation of the eurozone from the perspective of Modern Monetary Theory (MMT).
Sabine Yang-Schmidt’s path to China was predetermined a long time ago. She became interested in the country in the Far East while still at school. “I found it fascinating to draw Chinese characters,” she recalls. She enrolled in East Asian studies at the University of Cologne and, after graduation, went straight to her favorite country, where she worked for various companies and consultancies over the years. Among other things, she acted as a contact person for German media during the 2008 Olympic Games.
Her experiences from back then help her immensely today, as she manages the “Berlin Business Liaison Desk“ in Beijing and supports companies from the state of Berlin in China. “I spent six and a half years as a management consultant in Chengdu and learned how to open offices in China,” Sabine Yang-Schmidt says. When the opportunity arose to start at the Berlin Economic Representative Office, she jumped at it. “It was good to have a network in the capital region and to bring my experience from China with me.”
The “Berlin Business Liaison Desk” was only opened in 2018. Sabine Yang-Schmidt, together with her colleague Yiran Li, took over the initial staffing in January 2019. “The extent to which Berlin should open foreign offices had been considered for some time,” she says. The most important foreign markets for Berlin companies are China and the United States, so it made sense to set up a representative office in Beijing. In contrast to other federal states, however, an economic development agency did not take the lead, as is usually the case.
Instead, the Berlin Senate Chancellery, as well as the Chamber of Industry and Commerce and “Berlin Partner” pushed the project forward together. The office is now organized by the Berlin Senate Department for Economic Affairs. The support services offered by Sabine Yang-Schmidt and her colleague are – unsurprisingly – very diverse. “Companies come with all kinds of requests: ‘I need a supplier. I need someone in China to help me set up a production site. Where do I get staff? What’s the deal with this accounting and tax system? How is the general investment situation changing?‘” Yang-Schmidt recounts the day-to-day challenges.
The office in Beijing provides a lot of useful information but also sees itself as a door opener in the form of political support. “Companies need access to the provincial government, for example. If an unknown company calls, no one answers,” she says. Inquiries to the office come from almost all of the major economic clusters in Berlin: specifically from the mobility industry, energy technology, optics and creative industries. “With the exception of the health cluster, companies from all clusters have approached us and said, ‘We want to go to China,’” says Sabine Yang-Schmidt.
For her, joining the Beijing office was a step back to the country where she had lived for so long. Yang-Schmidt had left there in 2015 to work for the IHK in Brandenburg. “What bothered me in China was indeed the bad air,” she reports. This is another reason why she likes to stay in rural areas. “I prefer to be somewhere in nature in China. I find it very exciting to get out of such a city and work environment and see how people live there.” Constantin Eckner
The continuing public criticism of the European-Chinese investment agreement (CAI) is apparently prompting Beijing to take confidence-building measures. The Chinese government wants to “promote the liberalization and facilitation of trade and investment”, Premier Li Keqiang told thirty high-ranking representatives of European companies at a virtual meeting on Friday. All sides should meet “halfway” to do so, he said.
The Ministry of Foreign Affairs also let know who listened to the words of the Prime Ministerin extracts after the meeting: Volvo, Airbus, JCDecaux, AstraZeneca, L’Oreal, BASF and SAP – the crème de la crème of European business. That’s how you send messages to your negotiating partners in Brussels.
And the most direct way to do it is this: None other than Zhang Ming spoke directly to the members of the European Parliament’s Committee on International Trade. The Chinese EU ambassador, participants in the internal committee meeting recalled, had promised in “big words” that Beijing would adhere to all the obligations laid down in the CAI and would push ahead with the controversial ILO provisions on forced labor.
Whether the round of such friendly messages will continue at tomorrow’s meeting of the 17 Central and Eastern European states and China (17+1 format) is questionable, however. Amelie Richter has taken a look behind the scenes of the summit diplomacy – and observed mostly disgruntlement.
Is the Chinese man too effeminate? That is the subject of a social debate that is spreading ever wider. Conservative politicians demand to oppose an alleged trend towards the “feminization” of young men. For now, the Ministry of Education has responded with a basically innocuous regulation: It is strengthening physical education classes nationwide.
However, in a poll conducted by the Phoenix news portal, 64 percent of respondents believe the country’s male youth need “masculine education“. The question in the same polls about whether China’s youth need “heterosexualization” is concerning. More than half of the respondents agreed, with only 30 percent clearly rejecting the idea. While this is only one portal’s poll, it is still based on one million participants. The coverage in Chinese media shows along which lines the discussion is running. It revolves primarily around the term “yanggang” (阳刚), which is composed of the character for “male” (known from “yin and yang”) and the one for “hard, strong, powerful”. Meanwhile, the state media tries to boil down the debate. “Masculinity” should not be about emphasizing gender differences but about developing healthy physiques and inner strength, commented the Xinhua news agency.
Business CEO Si Zefu sparked the debate last May with a political push. Si is the head of the utility company Dongfang Electric. In his capacity as a deputy to the Chinese People’s Political Consultative Conference, he had diagnosed a “crisis of masculinity”. In a draft resolution, he claimed China’s boys have become too “delicate, timid and effeminate”. The “effeminate” generation of young men was now a “danger to the continued existence of the Chinese people”.
Si’s views could now be dismissed as the views of a right-wing nutcase, as they are in all countries. But his submission was accepted by the Consultative Conference at the time, so the education ministry now had to present a plan to counter the perceived effeminacy – certainly a challenge for modern school policymakers. The pressure to act has culminated in the Orders for Strengthening Physical Education at the end of January. It is linked to a call for physical education teachers to also pay attention to education for masculinity. What that means in concrete terms is left up to the individual educator.
The origins of the concerns can be traced to some extent. In Japan, South Korea and Taiwan, there has been a corresponding trend for a long time: A majority of young men there have had a rather flexible view of the male role since the nineties. The greatest success in the music scene is enjoyed by boy groups consisting of androgynous boys who are great dancers. Many young men there now also pay a lot of attention to their appearance, plucking their eyebrows, spending a lot of money on hairdressing and keeping up with fashion trends. They are not questioning their gender at all. But they have developed a notion of masculinity that is not just about toughness and intransigence. So conservatives there have also been complaining for years that men are becoming more unmanly. (Much to the chagrin of Japanese and South Korean women, however, that doesn’t necessarily mean they’re enthusiastically washing dishes and swaddling kids).
In China – presumably under the influence of South Korean youth culture – a pop scene has also developed that mainly produces handsome, rather slenderly built male stars. These usually have milk-white, smooth skin and silky hair. Si Zefu promptly problematized the trend toward these idols (Naiyou-Xiaosheng). He thinks the youth should once again look to “fighting heroes” (Zhandou-Yinxiong) instead. Websites at home and abroad that report on the topic often illustrate the idea with the sinewy, muscular elite soldiers from the infamous “Wolf Warrior” film series, the Chinese counterpart to Rambo.
Si himself sees one cause of the alleged effeminacy in the one-child policy under which parents and grandparents “coddled” their children. He believes he can reinvigorate masculinity in the country by making changes in the teaching force. He says it is fatal that mostly women teach in kindergartens and primary schools. This causes mama’s boys, he said. He believes boys need more male role models.
Chinese experts are critical of this line of thinking. Sociologist Wu Lixuan of Peking University sees Si’s proposal mainly as a stringing together of stereotypes. “Overemphasis on masculinity can also be harmful.” There are simply different characters, he says – and society offers tasks for outwardly strong men as well as for those who conform less to classic role models. The latter should not be persuaded that they are “feminine”.
Sex researcher Fang Gang of Linye University in Beijing expresses concern, saying the government is breeding toxic masculinity simply by taking such proposals seriously. “Men need to be aggressive to be able to overpower women,” Fang tells the South China Morning Post. “Men who are afraid of not coming across as manly enough tend to show their strength through violence.” LGBT groups, meanwhile, are asking what’s actually wrong with appearing feminine.
Congressman Si also seems to have overlooked the fact that the trend toward the well-groomed man has done nothing to diminish South Korea’s economic strength. It ran parallel to the rise of Samsung and Hyundai as global market leaders and a huge increase in economic performance. Japanese and South Korean comics, movies, music and other cultural goods are also in high demand worldwide. They spread a positive image of these countries among young people. China’s image is also likely to benefit more from elegant manga boys than wolf warriors.
For years, there has been constant speculation that a debt bubble could burst in China. Forbes predicted in 2016 that “big bubbles would burst” in China the following year, BusinessInsider saw “a wild debt boom which fueled rapid growth for China and emerging markets ‘may already have burst’” (2019), the South China Morning Post asked, “Will China’s debt-fuelled economic bubble eventually pop?” (2020). These texts were gladly garnished with statistics showing rising private and government debt. The theoretical content behind them is mostly thin. This is by no means surprising. After all, anyone who could accurately predict financial crises would quickly become a billionaire. Will there be a financial crisis in China? Very likely, yes. When? That is almost impossible to predict.
Much more important than the question of if and when a financial crisis will come is probably the question of whether the Chinese government could deal with it. The last major financial crisis of 2008/09 was overcome relatively quickly in China. The fiscal stimulus of the equivalent of more than $500 billion was sufficient to get the economy going again. The political will to expand government spending was there, unlike in the eurozone, which imposed austerity programs on national governments. Thus, even in 2019, Greece and Italy had not reached their respective 2007 output levels. The question now is whether a financial crisis in China could overwhelm the Chinese government. Will it run out of money in the event of a major financial crisis – as was the case in Greece in the aftermath of the 2007-08 financial crisis? Is the government’s debt threatening to cut off its air?
Hardly. Because the Chinese government is not limited in its spending in Chinese currency. The People’s Bank of China (PBoC) and the Chinese government are institutionally highly intertwined. It is, therefore, inconceivable that the PBoC would refuse to pay for Chinese government spending in a crisis.
To understand this more clearly, we need to look at how governments spend money. While textbooks assume that governments finance themselves through taxes, government bonds or the printing press, the reality is different. A state’s central bank – in this case, the People’s Bank of China – is the creator of the currency because it manages the payments system. This is a massive spreadsheet in which a country’s central bank enters who has how much yuan, US dollars or euros. The money in central bank accounts is called reserves. These reserves can be exchanged for cash. So private and state banks, as well as government agencies, keep accounts at the central bank. They use reserves to obtain cash for their customers and to carry out their transfers. The central bank can increase these accounts according to its rules if, for example, banks borrow reserves from the central bank against collateral.
It is important to know: The central bank – on behalf of the respective ministry of finance – pays the bills of the respective national government by increasing the credit balance on a bank account. The bank, in turn, increases the credit balance in the account of the recipient (company or individual) and settles the bill. For this process, a government does not have to issue bonds or collect taxes. In this process, it is also inconceivable that the PBoC would refuse to make payments from the Chinese central government. The chairman of China’s State Council nominates the governor and deputy governor of the central bank. The political will to fight a financial crisis will probably be there. But what happens if it were to become the biggest financial crisis in human history?
Mosler’s Law, named after the mastermind of Modern Monetary Theory (MMT), Warren Mosler, states: “No financial crisis is so severe that a sufficiently large increase in public spending cannot overcome it”. So for China, this also means that a financial crisis would not automatically lead to a collapse of the Chinese economy. The collapse in household and business spending on goods and services would reduce demand for them. The government, however, can compensate for this by spending additional amounts as necessary. The resulting deficits and government debt are unproblematic because the government can always obtain currency through its central bank. A default is unthinkable. This is also in line with Chinese economic policy. In an article in the journal The Chinese Economy, Lili Li, Hanyu Tan, and Hongmei Zhang write about the 1980s, “Because the PBoC was affiliated or subordinate to the Ministry of Finance, the two formed a de jure ‘consolidated government.’” So China is familiar with the situation where the central bank pays for government spending and the Ministry of Finance “wears the pants.”
The authors go on to write that fiscal policy is still relevant in China and that state money creation is still possible. The authors describe that the PBoC has not been independent of the Ministry of Finance in recent decades. Likewise, they elaborate that fiscal policy is responsible for straightening out income distribution. This means that, especially after a financial crisis, it would be very important for the government to stabilize private incomes with its spending. The authors also emphasize the relevant countercyclical component of fiscal policy: in bad times, additional government spending – in the face of falling private spending, hence countercyclical – can ensure that output and employment are stabilized. In good times, the government can increase spending weakly to not fuel inflation. The Chinese government thus has sufficient economic policy instruments at its disposal to cushion the consequences of a financial crisis, regardless of its size.
The “Chinese century” proclaimed by Wolfram Elsner could be expected to happen with or without a financial crisis. A financial crisis only reduces numbers on balance sheets. Wealth, on the other hand, would remain: Machines and factories, real estate and infrastructure. In China, this prosperity is based less and less on the export model and more and more on domestic consumption. In many sectors, Chinese companies are already technological leaders (solar industry), and in others, they are catching up fast (EVs). So China is well advanced on the development path. The biggest threat to Chinese prosperity in the medium to long term is probably climate change. Economic development has contributed to an increase in CO2 emissions. Air pollution is also a problem in China. If fossil fuels have to be abandoned in the future, China will be forced to greatly expand alternative energy sources. Since the country is a leader in the solar industry, the conditions for this are not so bad. In this respect, a possible financial crisis could even be used as an opportunity for an ecological restructuring of the Chinese economy.
Dr. Dirk Ehnts is an economist and political scientist living in Berlin. He is the spokesman for the board of the non-profit association Pufendorf-Gesellschaft e.V. which aims to educate people about how the banking and financial system works. His book “Geld und Kredit: eine €-päische Perspektive” explains the money creation of the eurozone from the perspective of Modern Monetary Theory (MMT).
Sabine Yang-Schmidt’s path to China was predetermined a long time ago. She became interested in the country in the Far East while still at school. “I found it fascinating to draw Chinese characters,” she recalls. She enrolled in East Asian studies at the University of Cologne and, after graduation, went straight to her favorite country, where she worked for various companies and consultancies over the years. Among other things, she acted as a contact person for German media during the 2008 Olympic Games.
Her experiences from back then help her immensely today, as she manages the “Berlin Business Liaison Desk“ in Beijing and supports companies from the state of Berlin in China. “I spent six and a half years as a management consultant in Chengdu and learned how to open offices in China,” Sabine Yang-Schmidt says. When the opportunity arose to start at the Berlin Economic Representative Office, she jumped at it. “It was good to have a network in the capital region and to bring my experience from China with me.”
The “Berlin Business Liaison Desk” was only opened in 2018. Sabine Yang-Schmidt, together with her colleague Yiran Li, took over the initial staffing in January 2019. “The extent to which Berlin should open foreign offices had been considered for some time,” she says. The most important foreign markets for Berlin companies are China and the United States, so it made sense to set up a representative office in Beijing. In contrast to other federal states, however, an economic development agency did not take the lead, as is usually the case.
Instead, the Berlin Senate Chancellery, as well as the Chamber of Industry and Commerce and “Berlin Partner” pushed the project forward together. The office is now organized by the Berlin Senate Department for Economic Affairs. The support services offered by Sabine Yang-Schmidt and her colleague are – unsurprisingly – very diverse. “Companies come with all kinds of requests: ‘I need a supplier. I need someone in China to help me set up a production site. Where do I get staff? What’s the deal with this accounting and tax system? How is the general investment situation changing?‘” Yang-Schmidt recounts the day-to-day challenges.
The office in Beijing provides a lot of useful information but also sees itself as a door opener in the form of political support. “Companies need access to the provincial government, for example. If an unknown company calls, no one answers,” she says. Inquiries to the office come from almost all of the major economic clusters in Berlin: specifically from the mobility industry, energy technology, optics and creative industries. “With the exception of the health cluster, companies from all clusters have approached us and said, ‘We want to go to China,’” says Sabine Yang-Schmidt.
For her, joining the Beijing office was a step back to the country where she had lived for so long. Yang-Schmidt had left there in 2015 to work for the IHK in Brandenburg. “What bothered me in China was indeed the bad air,” she reports. This is another reason why she likes to stay in rural areas. “I prefer to be somewhere in nature in China. I find it very exciting to get out of such a city and work environment and see how people live there.” Constantin Eckner
