Great potential attracts German investment

Huge national market, opening-up policy and dynamic innovations prove irresistible to foreign enterprises

Viewing China as a growing and vast market, German companies are optimistic about the country's innovative vitality and dividends of higher-level opening-up, industrial insiders said.

At the ongoing seventh China International Import Expo held in Shanghai, German company Karcher, the world's largest provider of cleaning equipment and solutions, is showcasing its latest cleaning robots and portable high-pressure washers, along with its subsidiary brand Hawk.

"China is an extremely important market where we can try, test and introduce very new and latest products, and see how the consumers here adapt to those technologies," said Rainer Kern, vice-general manager and chief financial officer at Karcher China. He emphasized that as China moves toward high-quality development, Karcher's products align perfectly with this direction.

The connection between Karcher and China began more than 20 years ago when this globally renowned provider of cleaning equipment established a small factory in Ningbo, Zhejiang province. As the business continued to grow, a larger and more technologically advanced factory was built in Changshu, Jiangsu province.

In Kern's view, China is not only an important consumer market but serves as an efficient base to support other markets in Asia. Recognizing this, Karcher subsequently established a regional headquarters in Changshu; a sales center in Shanghai; and a new global research and development center in the Suzhou Industrial Park, Jiangsu province.

"We have seen a continued very strong double-digit increase year-over-year for the China market," he said. China is the right place for Karcher to continue growing businesses due to its attractive government policies and strong market demands, he added.

Jan Rinnert, CEO and chairman of the board of managing directors of Heraeus Group — another leading German tech company focusing on precious metals and recycling, healthcare, semiconductors and electronics, and industrial applications — noted that China's rapid technological innovation is a key factor that attracts foreign investment.

With the growth of disposable income among the Chinese population, the consumer market is continuously expanding, leading to an increasing demand for high-quality products and services, he said.

Rinnert said that from establishing a refining plant in Hong Kong in 1974 to having production bases and R&D centers in more than 10 cities in China today, the company has achieved significant growth in areas such as electric vehicles, the circular economy, and renewable energy.

The company's development continues to benefit from the strong cooperative relationship between Germany and China, he added.

Entering the workshop of Jiangsu-based Chiron Machine Tools (Taicang), a subsidiary of German machine tool giant Chiron Group, one can see automated equipment process mechanical components.

The five-axis vertical machining center, the latest development by Chiron, produces components for new energy vehicle electric drive systems, destined for markets worldwide.

Since being established in 2012, Chiron Machine Tools (Taicang) has evolved from a sales office to comprehensive localization covering production, R&D, sales and services.

"Over the past decade, our business in China has tripled and our factory size has tripled as well. The rapid development of NEVs in China has brought new business growth opportunities," said Willi Riester, chief technology officer of Chiron Machine Tools (Taicang).

Riester said that the diverse services and a favorable business environment provided locally have helped the development of foreign enterprises in China.

Earlier this year, Beumer Group — an international leader in the design and manufacture of intralogistics systems for conveying, loading, palletizing, packaging, sortation, and distribution — entered Taicang, Jiangsu province, marking the 500th German company to settle in the area.

Today, Taicang has attracted more than 530 German enterprises, accounting for 10 percent of all German companies in the manufacturing sector in China, including more than 60 "hidden champions"; typically market leaders in their niche or specialized markets.

Walter Doring, chairman of the Academy of German Hidden Champions, stated that the prospects of the Chinese market are vast, offering continuous growth opportunities for German enterprises and aiding them in consolidating their competitiveness in the global market.

Currently, more than 90 percent of the approximately 500 German global market leaders have cooperated with China. For any company aspiring to become a global market leader, cooperation with China is indispensable, he added.

Zhai Qian, minister of economic and commercial affairs at the Chinese embassy in Germany, emphasized that the advantages of German companies in traditional fields such as mechanical manufacturing, automobiles and pharmaceuticals, combined with the cooperation potential in emerging areas including technological innovation, green low-carbon initiatives, circular economy, and digital economy of Chinese companies, inject new momentum into the economic growth of both parties.

Zhai noted that in Sino-German relations, economic and trade cooperation has always played the role of a ballast. Faced with current global risks and challenges, it is necessary to remove obstacles, cooperate hand in hand, expand win-win cooperation, and share the dividends of China's economic development.

This year marks the 10th anniversary of the establishment of a comprehensive strategic partnership between China and Germany, with economic and trade ties flourishing.

According to the latest statistics from Deutsche Bundesbank, the central bank of Germany, in the first half of this year, German investment in China reached a record 7.3 billion euros ($7.83 billion).

China has been Germany's largest trading partner for eight consecutive years. In 2023, Germany's direct investment in China increased by 4.3 percent year-on-year to 11.9 billion euros, a record high, the central bank said.

Prospects fuel growth

The continual increase in German investment stems from confidence in China's sustained economic development and innovative capabilities.

Zheng Chunrong, director of the German Studies Center of the Tongji University in Shanghai, said that when evaluating investments, German companies often consider market and profit perspectives, conduct comprehensive analyses of the global market, and seek opportunities in regions with the greatest potential for growth.

The continuous growth of German investment in China confirms the advantages of the Chinese market in terms of scale and development prospects, Zheng said.

China's growing strength in innovation leadership drives complementary advantages between China and Germany.

"The importance of China lies not only in its consumer market but also in its role as an innovation hub, leading transformations in various fields such as electrification, intelligent mobility, artificial intelligence, digitization, and energy efficiency," said Stefan Hartung, chairman of the board of management at Germany's Robert Bosch, a leading global supplier of technology and services.

He added that Bosch will continue to invest in China, leveraging local talent and innovation to drive breakthroughs in emerging fields.

Michael Schumann, chairman of the Board of the German Federal Association for Economic Development and Foreign Trade, highlighted that China's growing innovation leadership is prompting more strategic investments by German companies in China to better participate in local innovation.

Particularly in the automotive industry, German manufacturers will benefit from China's expertise in electric vehicles.

wangjinhui@chinadaily.com.cn