Some call it sinister, others ingenious: the business model of fitness studios. After all, who hasn’t experienced it: You sign up, go regularly for a few months, but eventually, your weaker inner self wins. However, you don’t cancel your membership either. The fitness boom has not passed China by. The young generation is spending more and more money on memberships, fitness apps, equipment, and the right diet. The billion-dollar market is further fueled by the CCP’s goals of making the population more athletic, report Jörn Petring and Gregor Koppenburg.
Jens Hildebrandt, head of the AHK in Beijing, describes the challenges faced by German companies in China in the CEO Talk with Frank Sieren: Travel restrictions due to COVID, competitive and innovation pressure from Chinese competitors. He calls for learning from Beijing’s state support and the People’s Republic’s courageous start-up companies. His motto: “Take risks and simply dare to do something new“. He advises German companies to adapt more flexibly and quickly to Chinese customer requirements. In the areas of industrial automation and decarbonization, there is still a lot of growth potential for Germany’s “hidden champions”.
We wish our readers in Europe a good start to the new working week – and those in China continued relaxing days off during Golden Week.
Jens Hildebrandt, 43, has dedicated his professional life to one question: How can German companies be successful in China? He became interested in this while studying sinology and politics in Leipzig, Beijing, and Hong Kong. Since 2007, he has been active in the network of German Chambers of Commerce Abroad (AHK). Hildebrandt was head of the East Asia department of the Association of German Chambers of Industry and Commerce (DIHK) in Berlin. As head of the AHK office in Guangzhou, he then became aware of how the People’s Republic wants to shape the future. Since 2018, Hildebrandt has been AHK head and executive board member of the German Chamber of Commerce for North China in Beijing. He has also been Asia-Pacific coordinator of the Asia-Pacific Committee (APA) of German Business since 2020. The COVID-19 pandemic recently presented him with a whole new set of challenges. You can watch the CEO-Talk in full length here.
Disclaimer: This interview has been translated into English and is not considered an official translation by any party involved in the interview.
Mr. Hildebrandt, as a result of the COVID-19 pandemic, the AHK has organized charter flights to China. How did the idea for the flights come about, which is still the most important way to get from Germany to China?
Like many ideas, this one was born out of necessity. In the spring of 2020, German companies could no longer get their employees and their families into China. China had largely closed its borders because of COVID. So we looked for a pragmatic solution and worked through various concepts together with the embassy. We had to weigh up two main questions against each other: How can we give the Chinese authorities a sense of security in their zero-percent-infection strategy? And: How can we still make it possible for Germans to enter the country and make it as pleasant as possible? At the time, however, we could not have imagined that these travel restrictions would be in place for so long. This year we have already been able to bring six charter flights to China. Last year there were 14.
Still, you could only get some of the people who should be in China to enter the country.
Yes. Only in very urgent cases do Germans get visas. The travel restrictions are causing our companies more and more headaches. They prevent further investment and cooperation. Machines stand still because the engineers who maintain or install them can’t get into the country. The situation is becoming more and more complicated. Many Chinese companies are now saying: We are sorry. If you don’t manage to get your engineers in, then unfortunately we will have to switch to Chinese competitors. They can supply us locally.
When will that change?
It doesn’t look like things will change before the Winter Olympics near Beijing early next year. The People’s Congress, the Chinese parliament, will meet afterwards in March, and there is an important party congress in the autumn of next year. I have trouble imagining that China will introduce much relaxation in restrictions before then. On the other hand, China cannot shut itself off from the outside world indefinitely, especially since domestic consumption has not yet fully returned to pre-COVID levels.
However, no other country was able to return to economic normality so quickly. Last year, China was the only major economy in the world to post positive growth figures. And this year, too, things are looking good.
Yes. The only question is how sustainable is a policy that goes into local lockdown and tightens travel restrictions nationwide every time there’s a small outbreak. It’s not just foreign companies that get hit, after all. Many Chinese companies have international strategies that are central to their business. They, too, are sorely lacking in global exchange. At the same time, consumer confidence in COVID policies has yet to return, giving weak numbers in retail sales.
Is there also a little intention behind it? According to the motto: Now we make a virtue out of necessity and see how far China gets on its own?
There’s something to that. However, that is only one of Beijing’s goals. Another important goal is to achieve sufficiently high economic growth. And I am sure that in such a test, they would no longer allow growth to plummet. Therefore, my impression is that Chinese policymakers gradually realize that exchange is essential if China wants to maintain its growth.
This, in turn, means that China is increasingly becoming a competitor rather than a partner.
We have to adjust to this. Even if this is sometimes met with incomprehension in Germany. We must learn to understand that China is never just one or the other. Those who see China only as a competitor or even a rival are fuelling fears. Those who see China only as a partner are naïve. Balancing this will be an ever-greater challenge for us, too, especially since China will be our most important future market for a long time to come. For companies, but also for us, the Chambers of Commerce Abroad.
What else do we need to learn when dealing with China?
Firstly, in Germany, people have not yet fully understood the profound innovation thrusts that China is already generating today. And secondly, the fact that the state and the economy are so closely interwoven has not only disadvantages, keyword “state economy”, but also advantages, keyword “state promotion of innovation”. From the point of view of the competitive situation, this is bad because too much subsidization of Chinese companies means a competitive advantage. On the other hand, German companies also participate and profit from the economic power that innovation generates. At the same time, companies are emerging that want to overtake us in the sectors in which we are still strong.
You experienced this first-hand when you worked for a few years in Guangzhou in southern China. A region that is considered the new Silicon Valley.
What you never forget once you’ve lived there is the speed at which China is becoming more and more innovative. We can hardly imagine that in the West. And it’s not just the companies and research institutions, but also the customers with their wishes and preferences. Some of our companies are still too slow to react. In any case, my time in southern China has opened my eyes. The mixture of clever state support and courageous, fast start-up entrepreneurs is unique. While this mix is a Chinese model, we should still take a closer look and try to learn from it. The focus here is on two questions: How can the state support innovation in Germany? And how can companies themselves become faster and more agile in their innovation cycles?
What is still missing from the German economy?
It’s this try-and-error spirit in particular that we could build on: take risks. Simply taking a chance on something new. Having the courage to do something wrong and then accepting the time and financial costs as part of a development process. This spirit is more widespread in China than in the USA. And more widespread in the USA than in Europe. We can still improve on this point.
How did you actually come to China?
I was on a student exchange in Japan when I was 18. That’s when I started to get interested in Asian culture. But Japan was in a deep recession at the time and was pretty depressed. I then looked to see which countries in the region had development potential, and, unsurprisingly, I came across China. So I started studying Sinology …
…a niche subject. You must have met with a lot of skepticism from those around you. Why did you continue?
Yes, it was like that. But I didn’t stop because I felt that “niche” was not the appropriate term to describe China. Given the speed at which China is developing, I quickly realized that in all strategic global issues, there is no way around China. We will have to work more and more closely with China, and engaging with China is becoming more and more exciting.
You experienced the GDR as a child. Wasn’t that a reason not to get involved with China?
I was too young at the time to make a system comparison now. I was twelve when the wall came down. I can only remember the red slogans that still exist here in China. With slogans like: “Contribute to making your city more beautiful. Greetings, Communist Party.”
Can you compare the systems?
You can. The only question is what good it will do. In the end, the GDR’s economic system led to the GDR abolishing itself. You can’t really say that about China.
And politically?
I would rather focus on the peculiarities of the Chinese system: It’s an authoritarian system that is increasingly focused on one person tightening the reins, even in the party.
So civil society’s room for maneuver is shrinking?
It was already different in Beijing when I first came to study here 20 years ago. It was less developed, of course, but on the other hand much freer in its creativity, in the art scene, the music scene. A lot of things have disappeared. And those who have stayed act much more cautiously. In short, life is more comfortable today than it was 20 years ago, but it has clearly lost some of its freedom and flexibility. The restrictions on civil society go hand in hand with the now greater leeway of the party leadership.
So economic opening is not followed by political opening?
Unfortunately, no. The trend used to exist, but I don’t see it happening now for the next 20 years. The state and the party have an increasingly tight grip on the reins, and as long as they continue to succeed in generating wealth growth for the population, China as we know it will continue to exist.
In view of the political developments, have you ever regretted your decision to study Sinology?
No, I really enjoy my job. I learn a lot. Every day we have to ask ourselves anew here in the chamber: How has the situation changed in this fast-growing country? Who do we need to talk to about what? Who is in charge? Who is not in charge but has influence? And what tone do we strike with whom?
Is it getting riskier to invest in China now?
You can’t say that as a general rule: The starting position for companies is more complicated than it was 20 or 30 years ago because a politicization of economic relations is in full swing. It’s no longer just about economic success and opportunities but increasingly also about managing risks. Opportunities and dependencies are two sides of the same coin. The question is: How can I exploit opportunities while keeping dependencies manageable? This is a particularly difficult question in sectors such as mechanical engineering or the automotive industry, where around 30 percent of global business is in China. And the trend is rising. Companies will definitely have to invest more in risk and compliance management.
What questions does that raise?
One is whether Chinese or Western companies will be treated equally – keyword “dual circulation” – and how long and in what way German companies will benefit from China’s rise.
So?
We will have cuts in some industries – especially in safety-related areas. In other industries, new opportunities will open up. 20 years ago, foreign companies had a market share of 60 percent. Now the market is controlled by Chinese players. At best, we are still supplying. In the area of industrial automation and decarbonization, on the other hand, there are still great opportunities. China is and will remain the growth market of the future for most industries.
VW is still China’s most successful car manufacturer. Will it stay that way?
That depends on the innovative strength of car manufacturers in general and, in particular, on the question of how quickly they will succeed in adapting to Chinese customer wishes. This is a sore point in general, where German companies still have to catch up. One thing is clear: Chinese competitors are catching up. Faster than we all believed and still believe. At the same time, German companies are not afraid of competition, as long as it is fair and all market participants have to abide by the same rules.
Is the reputation of German business in China suffering in view of the political tensions?
The reputation of the German economy is excellent. We have created over a million jobs here in the past 30 years, contributed to the growth of the Chinese economy. German SMEs, in particular, are highly regarded. Hidden champions are closely associated with the label “Made in Germany”. Small and medium-sized enterprises are also the backbone of the German economy in China. We have over 5,000 German companies here in China. The vast majority of them are small and medium-sized enterprises. Made in Germany, therefore, continues to have a good reputation, even though the reputation of the West as a whole has lost some of its strength, especially in the last two years.
The perception of China in Germany and in the West as a whole, on the other hand, has changed. People have become more critical and skeptical of China.
That is the case. China itself certainly contributes to this, but above all, we have lacked exchanges in recent years. The trips by decision-makers, by politicians, senior officials, and CEOs on both sides are missing. But also the trips at the working level. This leads to a decrease in mutual understanding. This is a severe problem. The image of each other is increasingly shaped by fears, even anxieties, which are reinforced because people still know so little about each other.
What role does China’s domestic policy play in tightening the reins?
This policy does not make things any easier and, in addition to the reduced exchange and knowledge about each other, also leads to the fact that the balancing act between economic success and political risks is becoming ever greater for foreign companies on the ground. The Chinese government’s toolbox to fight back in terms of trade policy is growing with each passing month. And the conflict with the US is far from over, as are the frictions with the European Union.
That doesn’t sound very confident. What can German companies do in this situation?
It’s difficult for companies. They can only change a little. But they have to manage their risks more comprehensively because the political conflicts are having an ever greater impact on their business. One thing is clear: China is putting up with less and less, and the US does not want to share its power. Europe and Germany will increasingly define and defend their own interests. The question companies must now ask themselves: What could this mean for my business? Especially since China is likely to remain the Germans’ most important growth market and trading partner for a very long time to come. Companies are working on new China strategies for the next five to ten years.
Coalition negotiations are just beginning in Germany. What do you expect from the new federal government?
From the point of view of business: That it first conducts a dialog with German business about China in order to exchange views on the respective development goals. It is also important to determine which cooperations with China we want to continue in the future and which ones we might not want to pursue, and what our goals are in this regard. At the same time, we need more dialogue and clear rules of the game in our dealings with China. This also includes setting red lines. But the red lines must not be a political end in themselves or serve only to serve domestic political sentiments. Above all, they should have one goal, deal with one question: How can both sides cooperate more sustainably?
Didi Kirsten Tatlow (54) grew up in Hong Kong – right in the neighborhood of a huge country. From an early age, she came into contact with her big neighbor China. It became her vocation: “China was my world and the reason to become a journalist.” Because “Europe never understood China very well and still doesn’t”.
Tatlow is a Senior Fellow in the Asia Program of the German Council on Foreign Relations. Every day, she observes China’s growing role and influence in world affairs, its current negotiations with the Taliban, its close ties to Pakistan, and its dangerous role in nuclear research. “When I started my work, I was naive. I’ve since become critical.”
Too critical, many accuse her. But Didi’s view is based on years of experience, a life in China, Hong Kong, Taiwan, and a job that was fraught with danger. “Europe may largely turn a blind eye, but I can’t.”
After studying Chinese and politics in London, she worked as a journalist in Asia and Europe for 23 years, writing for Chinese and foreign media, exposing organ trafficking and serial killers. She won the Human Rights Press Award from Amnesty International, the Foreign Correspondent’s Club Hong Kong, and the Hong Kong Journalists Association. Working for her hometown newspaper, the South China Morning Post, brought her into serious conflict with Beijing’s government. As a correspondent for the New York Times, she became a target of the Chinese authorities.
Today, she lives in Berlin with her husband and two children. After a year of fellowship at Merics, Tatlow began the project she calls “China in Europe” in 2018, for which she explores the networks of the People’s Republic in Europe. As co-author and co-editor of the book “China’s Quest for Foreign Technology: Beyond Espionage,” she takes a look at Chinese power structures and espionage techniques. “We as Europe have a responsibility to be cautious, but also critical and courageous in addressing and analyzing the situation in the People’s Republic. Because it is a one-party state with a tyrannical tradition and the intention to become the number one state in the world.”
Didis Fokus liegt auf dem Technologietransfer und den wirtschaftlichen Strukturen zwischen China und Europa. Die Abhängigkeit von China beunruhigt sie sehr. “Eine große wirtschaftliche Interessengruppe in Deutschland verteidigt und unterstützt China und übersieht damit viele politische und menschenrechtliche Themen.” Dabei schaue man über die eigene Verantwortung hinweg: China verletze Menschenrechte in Taiwan, in Tibet, Xinjiang und Hongkong, im eigenen Land, aber auch international. “Ich verstehe nicht, wieso man so wenig tut. Doch es muss sich etwas ändern. China greift längst nicht mehr nur innerhalb seiner Grenzen ein, sondern weit darüber hinaus.”
Didi’s focus is on technology transfer and economic structures between China and Europe. She is very concerned about the dependence on China. “A large economic interest group in Germany defends and supports China, overlooking many political and human rights issues.” In doing so, they overlook their own responsibilities: China violates human rights in Taiwan, in Tibet, Xinjiang, and Hong Kong, in their own country, but also internationally. “I don’t understand why so little is being done. But something has to change. China has long since intervened not only within its borders but far beyond.”
Didi calls for a rethink and understanding as a journalist, China expert, Hong Kong native, and mother. “What kind of world will our children grow up in? We decide whether it will be in a democratic one.” Or in a world significantly influenced by the CCP. Lisa Marie Jordan
Some call it sinister, others ingenious: the business model of fitness studios. After all, who hasn’t experienced it: You sign up, go regularly for a few months, but eventually, your weaker inner self wins. However, you don’t cancel your membership either. The fitness boom has not passed China by. The young generation is spending more and more money on memberships, fitness apps, equipment, and the right diet. The billion-dollar market is further fueled by the CCP’s goals of making the population more athletic, report Jörn Petring and Gregor Koppenburg.
Jens Hildebrandt, head of the AHK in Beijing, describes the challenges faced by German companies in China in the CEO Talk with Frank Sieren: Travel restrictions due to COVID, competitive and innovation pressure from Chinese competitors. He calls for learning from Beijing’s state support and the People’s Republic’s courageous start-up companies. His motto: “Take risks and simply dare to do something new“. He advises German companies to adapt more flexibly and quickly to Chinese customer requirements. In the areas of industrial automation and decarbonization, there is still a lot of growth potential for Germany’s “hidden champions”.
We wish our readers in Europe a good start to the new working week – and those in China continued relaxing days off during Golden Week.
Jens Hildebrandt, 43, has dedicated his professional life to one question: How can German companies be successful in China? He became interested in this while studying sinology and politics in Leipzig, Beijing, and Hong Kong. Since 2007, he has been active in the network of German Chambers of Commerce Abroad (AHK). Hildebrandt was head of the East Asia department of the Association of German Chambers of Industry and Commerce (DIHK) in Berlin. As head of the AHK office in Guangzhou, he then became aware of how the People’s Republic wants to shape the future. Since 2018, Hildebrandt has been AHK head and executive board member of the German Chamber of Commerce for North China in Beijing. He has also been Asia-Pacific coordinator of the Asia-Pacific Committee (APA) of German Business since 2020. The COVID-19 pandemic recently presented him with a whole new set of challenges. You can watch the CEO-Talk in full length here.
Disclaimer: This interview has been translated into English and is not considered an official translation by any party involved in the interview.
Mr. Hildebrandt, as a result of the COVID-19 pandemic, the AHK has organized charter flights to China. How did the idea for the flights come about, which is still the most important way to get from Germany to China?
Like many ideas, this one was born out of necessity. In the spring of 2020, German companies could no longer get their employees and their families into China. China had largely closed its borders because of COVID. So we looked for a pragmatic solution and worked through various concepts together with the embassy. We had to weigh up two main questions against each other: How can we give the Chinese authorities a sense of security in their zero-percent-infection strategy? And: How can we still make it possible for Germans to enter the country and make it as pleasant as possible? At the time, however, we could not have imagined that these travel restrictions would be in place for so long. This year we have already been able to bring six charter flights to China. Last year there were 14.
Still, you could only get some of the people who should be in China to enter the country.
Yes. Only in very urgent cases do Germans get visas. The travel restrictions are causing our companies more and more headaches. They prevent further investment and cooperation. Machines stand still because the engineers who maintain or install them can’t get into the country. The situation is becoming more and more complicated. Many Chinese companies are now saying: We are sorry. If you don’t manage to get your engineers in, then unfortunately we will have to switch to Chinese competitors. They can supply us locally.
When will that change?
It doesn’t look like things will change before the Winter Olympics near Beijing early next year. The People’s Congress, the Chinese parliament, will meet afterwards in March, and there is an important party congress in the autumn of next year. I have trouble imagining that China will introduce much relaxation in restrictions before then. On the other hand, China cannot shut itself off from the outside world indefinitely, especially since domestic consumption has not yet fully returned to pre-COVID levels.
However, no other country was able to return to economic normality so quickly. Last year, China was the only major economy in the world to post positive growth figures. And this year, too, things are looking good.
Yes. The only question is how sustainable is a policy that goes into local lockdown and tightens travel restrictions nationwide every time there’s a small outbreak. It’s not just foreign companies that get hit, after all. Many Chinese companies have international strategies that are central to their business. They, too, are sorely lacking in global exchange. At the same time, consumer confidence in COVID policies has yet to return, giving weak numbers in retail sales.
Is there also a little intention behind it? According to the motto: Now we make a virtue out of necessity and see how far China gets on its own?
There’s something to that. However, that is only one of Beijing’s goals. Another important goal is to achieve sufficiently high economic growth. And I am sure that in such a test, they would no longer allow growth to plummet. Therefore, my impression is that Chinese policymakers gradually realize that exchange is essential if China wants to maintain its growth.
This, in turn, means that China is increasingly becoming a competitor rather than a partner.
We have to adjust to this. Even if this is sometimes met with incomprehension in Germany. We must learn to understand that China is never just one or the other. Those who see China only as a competitor or even a rival are fuelling fears. Those who see China only as a partner are naïve. Balancing this will be an ever-greater challenge for us, too, especially since China will be our most important future market for a long time to come. For companies, but also for us, the Chambers of Commerce Abroad.
What else do we need to learn when dealing with China?
Firstly, in Germany, people have not yet fully understood the profound innovation thrusts that China is already generating today. And secondly, the fact that the state and the economy are so closely interwoven has not only disadvantages, keyword “state economy”, but also advantages, keyword “state promotion of innovation”. From the point of view of the competitive situation, this is bad because too much subsidization of Chinese companies means a competitive advantage. On the other hand, German companies also participate and profit from the economic power that innovation generates. At the same time, companies are emerging that want to overtake us in the sectors in which we are still strong.
You experienced this first-hand when you worked for a few years in Guangzhou in southern China. A region that is considered the new Silicon Valley.
What you never forget once you’ve lived there is the speed at which China is becoming more and more innovative. We can hardly imagine that in the West. And it’s not just the companies and research institutions, but also the customers with their wishes and preferences. Some of our companies are still too slow to react. In any case, my time in southern China has opened my eyes. The mixture of clever state support and courageous, fast start-up entrepreneurs is unique. While this mix is a Chinese model, we should still take a closer look and try to learn from it. The focus here is on two questions: How can the state support innovation in Germany? And how can companies themselves become faster and more agile in their innovation cycles?
What is still missing from the German economy?
It’s this try-and-error spirit in particular that we could build on: take risks. Simply taking a chance on something new. Having the courage to do something wrong and then accepting the time and financial costs as part of a development process. This spirit is more widespread in China than in the USA. And more widespread in the USA than in Europe. We can still improve on this point.
How did you actually come to China?
I was on a student exchange in Japan when I was 18. That’s when I started to get interested in Asian culture. But Japan was in a deep recession at the time and was pretty depressed. I then looked to see which countries in the region had development potential, and, unsurprisingly, I came across China. So I started studying Sinology …
…a niche subject. You must have met with a lot of skepticism from those around you. Why did you continue?
Yes, it was like that. But I didn’t stop because I felt that “niche” was not the appropriate term to describe China. Given the speed at which China is developing, I quickly realized that in all strategic global issues, there is no way around China. We will have to work more and more closely with China, and engaging with China is becoming more and more exciting.
You experienced the GDR as a child. Wasn’t that a reason not to get involved with China?
I was too young at the time to make a system comparison now. I was twelve when the wall came down. I can only remember the red slogans that still exist here in China. With slogans like: “Contribute to making your city more beautiful. Greetings, Communist Party.”
Can you compare the systems?
You can. The only question is what good it will do. In the end, the GDR’s economic system led to the GDR abolishing itself. You can’t really say that about China.
And politically?
I would rather focus on the peculiarities of the Chinese system: It’s an authoritarian system that is increasingly focused on one person tightening the reins, even in the party.
So civil society’s room for maneuver is shrinking?
It was already different in Beijing when I first came to study here 20 years ago. It was less developed, of course, but on the other hand much freer in its creativity, in the art scene, the music scene. A lot of things have disappeared. And those who have stayed act much more cautiously. In short, life is more comfortable today than it was 20 years ago, but it has clearly lost some of its freedom and flexibility. The restrictions on civil society go hand in hand with the now greater leeway of the party leadership.
So economic opening is not followed by political opening?
Unfortunately, no. The trend used to exist, but I don’t see it happening now for the next 20 years. The state and the party have an increasingly tight grip on the reins, and as long as they continue to succeed in generating wealth growth for the population, China as we know it will continue to exist.
In view of the political developments, have you ever regretted your decision to study Sinology?
No, I really enjoy my job. I learn a lot. Every day we have to ask ourselves anew here in the chamber: How has the situation changed in this fast-growing country? Who do we need to talk to about what? Who is in charge? Who is not in charge but has influence? And what tone do we strike with whom?
Is it getting riskier to invest in China now?
You can’t say that as a general rule: The starting position for companies is more complicated than it was 20 or 30 years ago because a politicization of economic relations is in full swing. It’s no longer just about economic success and opportunities but increasingly also about managing risks. Opportunities and dependencies are two sides of the same coin. The question is: How can I exploit opportunities while keeping dependencies manageable? This is a particularly difficult question in sectors such as mechanical engineering or the automotive industry, where around 30 percent of global business is in China. And the trend is rising. Companies will definitely have to invest more in risk and compliance management.
What questions does that raise?
One is whether Chinese or Western companies will be treated equally – keyword “dual circulation” – and how long and in what way German companies will benefit from China’s rise.
So?
We will have cuts in some industries – especially in safety-related areas. In other industries, new opportunities will open up. 20 years ago, foreign companies had a market share of 60 percent. Now the market is controlled by Chinese players. At best, we are still supplying. In the area of industrial automation and decarbonization, on the other hand, there are still great opportunities. China is and will remain the growth market of the future for most industries.
VW is still China’s most successful car manufacturer. Will it stay that way?
That depends on the innovative strength of car manufacturers in general and, in particular, on the question of how quickly they will succeed in adapting to Chinese customer wishes. This is a sore point in general, where German companies still have to catch up. One thing is clear: Chinese competitors are catching up. Faster than we all believed and still believe. At the same time, German companies are not afraid of competition, as long as it is fair and all market participants have to abide by the same rules.
Is the reputation of German business in China suffering in view of the political tensions?
The reputation of the German economy is excellent. We have created over a million jobs here in the past 30 years, contributed to the growth of the Chinese economy. German SMEs, in particular, are highly regarded. Hidden champions are closely associated with the label “Made in Germany”. Small and medium-sized enterprises are also the backbone of the German economy in China. We have over 5,000 German companies here in China. The vast majority of them are small and medium-sized enterprises. Made in Germany, therefore, continues to have a good reputation, even though the reputation of the West as a whole has lost some of its strength, especially in the last two years.
The perception of China in Germany and in the West as a whole, on the other hand, has changed. People have become more critical and skeptical of China.
That is the case. China itself certainly contributes to this, but above all, we have lacked exchanges in recent years. The trips by decision-makers, by politicians, senior officials, and CEOs on both sides are missing. But also the trips at the working level. This leads to a decrease in mutual understanding. This is a severe problem. The image of each other is increasingly shaped by fears, even anxieties, which are reinforced because people still know so little about each other.
What role does China’s domestic policy play in tightening the reins?
This policy does not make things any easier and, in addition to the reduced exchange and knowledge about each other, also leads to the fact that the balancing act between economic success and political risks is becoming ever greater for foreign companies on the ground. The Chinese government’s toolbox to fight back in terms of trade policy is growing with each passing month. And the conflict with the US is far from over, as are the frictions with the European Union.
That doesn’t sound very confident. What can German companies do in this situation?
It’s difficult for companies. They can only change a little. But they have to manage their risks more comprehensively because the political conflicts are having an ever greater impact on their business. One thing is clear: China is putting up with less and less, and the US does not want to share its power. Europe and Germany will increasingly define and defend their own interests. The question companies must now ask themselves: What could this mean for my business? Especially since China is likely to remain the Germans’ most important growth market and trading partner for a very long time to come. Companies are working on new China strategies for the next five to ten years.
Coalition negotiations are just beginning in Germany. What do you expect from the new federal government?
From the point of view of business: That it first conducts a dialog with German business about China in order to exchange views on the respective development goals. It is also important to determine which cooperations with China we want to continue in the future and which ones we might not want to pursue, and what our goals are in this regard. At the same time, we need more dialogue and clear rules of the game in our dealings with China. This also includes setting red lines. But the red lines must not be a political end in themselves or serve only to serve domestic political sentiments. Above all, they should have one goal, deal with one question: How can both sides cooperate more sustainably?
Didi Kirsten Tatlow (54) grew up in Hong Kong – right in the neighborhood of a huge country. From an early age, she came into contact with her big neighbor China. It became her vocation: “China was my world and the reason to become a journalist.” Because “Europe never understood China very well and still doesn’t”.
Tatlow is a Senior Fellow in the Asia Program of the German Council on Foreign Relations. Every day, she observes China’s growing role and influence in world affairs, its current negotiations with the Taliban, its close ties to Pakistan, and its dangerous role in nuclear research. “When I started my work, I was naive. I’ve since become critical.”
Too critical, many accuse her. But Didi’s view is based on years of experience, a life in China, Hong Kong, Taiwan, and a job that was fraught with danger. “Europe may largely turn a blind eye, but I can’t.”
After studying Chinese and politics in London, she worked as a journalist in Asia and Europe for 23 years, writing for Chinese and foreign media, exposing organ trafficking and serial killers. She won the Human Rights Press Award from Amnesty International, the Foreign Correspondent’s Club Hong Kong, and the Hong Kong Journalists Association. Working for her hometown newspaper, the South China Morning Post, brought her into serious conflict with Beijing’s government. As a correspondent for the New York Times, she became a target of the Chinese authorities.
Today, she lives in Berlin with her husband and two children. After a year of fellowship at Merics, Tatlow began the project she calls “China in Europe” in 2018, for which she explores the networks of the People’s Republic in Europe. As co-author and co-editor of the book “China’s Quest for Foreign Technology: Beyond Espionage,” she takes a look at Chinese power structures and espionage techniques. “We as Europe have a responsibility to be cautious, but also critical and courageous in addressing and analyzing the situation in the People’s Republic. Because it is a one-party state with a tyrannical tradition and the intention to become the number one state in the world.”
Didis Fokus liegt auf dem Technologietransfer und den wirtschaftlichen Strukturen zwischen China und Europa. Die Abhängigkeit von China beunruhigt sie sehr. “Eine große wirtschaftliche Interessengruppe in Deutschland verteidigt und unterstützt China und übersieht damit viele politische und menschenrechtliche Themen.” Dabei schaue man über die eigene Verantwortung hinweg: China verletze Menschenrechte in Taiwan, in Tibet, Xinjiang und Hongkong, im eigenen Land, aber auch international. “Ich verstehe nicht, wieso man so wenig tut. Doch es muss sich etwas ändern. China greift längst nicht mehr nur innerhalb seiner Grenzen ein, sondern weit darüber hinaus.”
Didi’s focus is on technology transfer and economic structures between China and Europe. She is very concerned about the dependence on China. “A large economic interest group in Germany defends and supports China, overlooking many political and human rights issues.” In doing so, they overlook their own responsibilities: China violates human rights in Taiwan, in Tibet, Xinjiang, and Hong Kong, in their own country, but also internationally. “I don’t understand why so little is being done. But something has to change. China has long since intervened not only within its borders but far beyond.”
Didi calls for a rethink and understanding as a journalist, China expert, Hong Kong native, and mother. “What kind of world will our children grow up in? We decide whether it will be in a democratic one.” Or in a world significantly influenced by the CCP. Lisa Marie Jordan
