NEWS FROM BERLIN AND BRUSSELS - AHK

BUSINESS FOCUS

NEWS FROM BERLIN AND BRUSSELS

NEWS FROM BERLIN AND BRUSSELS

Economy Signs Charter About Flexible Labour Time Berlin. Family-friendly and flexible working times are the key when it comes to securing skilled employees. This was agreed upon by representatives of industry and labour unions when invited by Chancellor Angela Merkel and Federal Minister for Family Affairs Kristina Schröder on 8th February 2011. Mr. Hans Heinrich Driftmann, president of the DIHK, and the Minister for Family Affairs and several other business representatives signed a charter, in which they vow to support family-friendly working time

models and to reconcile family and work life. The countless possibilities that flexible working time models offer – beyond the common rigid conception of part-time or full-time jobs – will be further advertised and improved. In this process it is important to consider both employer and employee interests. According to Mr. Driftmann, “basic conditions that currently prevent companies and their employees from implementing flexible solution have to be addressed.” Contact: [email protected]

No Reporting Duties Through the Backdoor Berlin/Brussels. The DIHK opposes plans by the EU commission to force companies to publish their voluntary social and environmental commitment in their business reports, calling them harmful. The DIHK points out that the majority of companies have always been socially committed. Companies are active in many areas and in a variety of ways: ranging

from providing new jerseys to local soccer clubs, to offering child care to employees, to implementing energy efficiency initiatives. Most of the time, companies don’t publicise these activities which are considered normal. A bureaucratic obligation to report would rather endanger social activities. Contact: [email protected]

Summit Talk Over Skilled Worker Shortage Berlin. Federal Minister Ursula von der Leyen invited the heads of trade unions and trade associations to meet in Berlin and discuss potential joint strategies to counter the shortage of skilled employees. Mr. Hans Heinrich Driftmann, president of the DIHK, suggested to take advantage of the current demographic developments for

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reforms in education policy and to shift awareness in companies. The decrease in number of school graduates and applicants for apprenticeships are already affecting companies. The circle agreed to work out a strategic paper with potential solutions from the federal government, industry and trade unions in the first half of 2011. The main issues will be support in the transition stage from school to work, continuous training throughout employment as well as overcoming the skilled worker shortage in technical and healthcare areas. contact: [email protected]

Basel III Threatens Long-Term Loans? BERLIN. The “Working Committee SME”, a body of the DIHK, warns that Basel III could cause a decrease in the allocation of long-term loans. The nine member associations of the committee believe that Basel III will have a negative influence on the duration and interest rate conditions of bank loans. The new liquidity regulations could particularly lead to banks being forced to increasingly offer short-term credits. This conflicts the German tradition of long-term investment financing, which offers companies necessary reliance in planning. At the upcoming implementation of Basel III into European legislation, the DIHK will advocate for maintaining the well-proven ways of financing for small and medium-sized companies. Contact: [email protected]

EU Sets Up Resources Strategy Brussels. The unhampered access to resources in global markets is supposed to be a part of the new EU-resource strategy. This has already been demanded by the DIHK at the EU counsel on critical resources last autumn. Now it is up to the politicians to bring about European and international agreements with transparent rules and without confinements. The current DIHK survey, which is at the hand of the committee, shows that price jumps and market access problems cause the supply of raw materials to turn into a bottleneck for German companies. More than half of companies even worry they won’t have access to required resources anymore. As an accompanying measure, free commodity markets are a necessity. Contact: [email protected]

MEMBER NEWS BEIJING

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MEMBER NEWS BEIJING

With Compliments Europe’s oldest hotel group Kempinski was honoured with the Best Brands award in the category of Best Service Provider. The luxury hotel group was ranked first followed by Germany’s largest bank, Direktbank ING DiBa, and Lufthansa. This places Kempinski in the same league as Volkswagen, Lego and Apple among the most successful brands in Germany.

“During the survey, Kempinski stood out in all areas of service,” said Mr. Sigfried Högl, Managing Director of GfK, part of the awarding body. “The unique and decentralised nature of Kempinski’s strategy was recognised by those surveyed, and that makes all the difference.” Best Brands Awards nominees are determined by the consumers: brands were evaluated in

Reporting Growth

Expanding Dimensions

Deutsche Bank has announced its financial results for the full year of 2010: income before taxes was EUR 4bn; income before income taxes, excluding the Postbank and other acquisition-related charges, was EUR 6.5bn. A record fourth quarter reported revenues of EUR 7.4bn, and income before taxes in the fourth quarter totaled EUR 707mn. The Bank successfully completed its EUR 10.2bn capital increase; Tier 1 ratio was 12.3% and core Tier 1 ratio was 8.7%. The Bank proposed a cash dividend of EUR 0.75 per share for 2010, and reaffirmed its 2011 profit target of EUR 10bn.

Marking an unprecedented achievement in their history, Elster Group was awarded the contracts to deliver more than 80 sets of gas metering skids for the Second West-East Gas Pipeline Project, WEPP II.

Management Board Chairman Dr. Josef Ackermann said, “2010 was a year of investment and change for Deutsche Bank. In the process, we greatly improved our global market position and are eminently well placed for further growth. Using the momentum of these achievements we aim to pursue the ambitious earnings targets we set ourselves.”

The First West-East Gas Pipeline Project (WEPP) comprises 4,000km and pumps gas from Xinjiang to Shanghai, transmitting 12bn cubic metres of natural gas per year through more than 40 gas metering skids provided by Elster in 2004.

several categories in a study carried out by the German market and consumer research company GfK. The category ‘Best Service Provider’ focused on decision makers and opinion leaders. For this year’s ranking, 850 people were surveyed about indicators such as performance, reliability, availability and reputation.

the capacity of its predecessor, the second pipeline is expected to transmit up to 30bn cubic metres of natural gas each year. Apart from easing the supply shortage of natural gas in China, the WEPP II will significantly speed up the economic growth of the regions along the pipeline, improving local revenue, boosting employment opportunities and bringing about momentous economic and social benefits.

The Second WestEast Gas Pipeline Project starts in the west in Xinjiang, stretches to Guangzhou and Hong Kong in the south and to Shanghai in the east. Doubling 2011 April - May

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BUSINESS FOCUS

MEMBER NEWS BEIJING

Venturing Out

In November 2010, the Bucyrus Huainan Joint Venture, which is 60% owned by Bucyrus officially opened and celebrated the ribbon cutting ceremony at their new facility in Huainan, Anhui Province. Under the name Bucyrus Huainan Machinery (BHM), the factory has completed pre-production activities and is now strongly focusing on customer orders. Twelve months in the making, the new factory has already exceeded expectations with 16,000m2 of manufacturing space poised to capture a larger piece of the domestic and international belt conveyor system markets. The plant is complemented by a three-story office building with the first two floors configured for the belt conveyor office personnel and the 3 rd floor semi-finished for future expansion with other products. Currently, almost 200 BHM employees are working a full first and partial second shift.

Under New Direction

Mr. Florian Hackelberg is a Senior Manager in the Advisory practice of PwC, with over six years of experience in Transaction Services.

New Team Member Ms. Manuela Reintgen has joined the Dezan Shira & Associates team. As Business Development Associate, she is part of the German desk and advises international clients on incorporations and legal issues concerning their China investments. Manuela completed a degree in Translation Studies, during which she studied Chinese, French and Law, and was selected for an academic research position in transnational bargaining protocols focusing on Chinese and European relations. Prior to joining Dezan Shira, Manuela worked as translator and representative for academic institutions and legal and governmental organizations in both Germany and China.

Nearly 15 years ago in 1997, Interturbine Aviation Logistics – an approved supplier of CES materials such as standard hardware, raw and semi-finished materials, consumables, chemicals and composites to the aerospace and high-tech industries, MRO’s and airlines – recognised the big potential of the fast growing aviation market in China and opened its Representative Office in Beijing. This is when the success story of Interturbine i n C h i n a s t a r t e d a n d t o d a y, e l e v e n employees take care of the Interturbine customers in China. Now Mr. Markus Schultz will continue and develop the successful business operations of Interturbine in China. With their new Director of Operations and Chief Representative, Interturbine has found a well-experienced manager. After six accomplished years in China, predecessor D r. M i c h a e l A n d ru t h a s re t u r n e d t o Germany.

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Excellent Advice

He started his career with PwC in Berlin and later joined the valuation group in Shanghai where he worked for two years until 2009. After that, he focused on finishing his PhD at the Technical University of Berlin on the topic of real estate valuation in China. Mr. Hackelberg has substantial experience in performing business combinations (Purchase Price Allocations), land use rights, real estate and machinery and equipment valuations for transaction, tax and financial reporting purposes. He is a Professional Member of the Royal Institution of Chartered Surveyors (MRICS) and an associate lecturer at the University of Applied Sciences Aschaffenburg.

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Highlighted

Expansion Minded

TÜV Rheinland was awarded the honour of being a “Top Ten Highlight” at the 2011 SNEC Photovoltaic Power Expo. The group's 90m 2 booth housed the latest in PV product quality standards and offered visitors the chance to meet and discuss with the company’s reputed engineers. Demonstrating the company’s extended PV scope, TÜV Rheinland signed a MOU with Anhui EHE New Energy Tech. Co. Ltd (EHE New Energy), a leading PV inverter manufacturer, during the Power Expo opening.

Commerzbank has ambitious plans for corporate customer business with China: its business volume in the Corporate Banking segment of Asia’s largest country is anticipated to increase by 20% this year alone. Thus, the planned growth rate in China doubles that for the entire Asia region, in which Mittelstandsbank intends to grow by 10% annually. “We would like to clearly expand our market position in the booming region Asia,” says Michael Kotzbauer, Regional Board Member Asia.

Uwe Halstenbach, Director of Electrical Product, TÜV Rheinland Greater China, with Huang Mingjiu, president of EHE New Energy, at the MOU signing ceremony.

In Commerzbank’s corporate customer business, Asia is the most significant market after Western Europe. Mittelstandsbank offers consulting and services to German SMEs doing business in China, but also advises Chinese firms seeking to do business in Germany. Commerzbank has been represented in Asia for 50 years, and the representative office in Beijing was opened 30 years ago.

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BUSINESS FOCUS

MEET THE MEMBER

Company: E.R.P. Eastern Relationship Projectconsult & Real Estate GmbH Job Title/Position: Managing Partner Year of Foundation: 1994 HQ: Berlin Main Business: Consulting and Research Services Number of Employees: 20

Manfred Schönebeck Mr. Schönebeck, a year has passed since we spoke to your managing partner Mr. Olaf Tietz and first introduced your company. In retrospective, how has E.R.P. developed in the past year?

Although we have arrived, we are still permanently learning. Every day brings something new and unexpected. We have fallen in love with the country. We have seen more than 40 cities and thought we have seen it all and are successful, but we now understand that we are still at the beginning.

To which places in China has your work taken you so far and which was your most memorable trip? Our whole stay here is like a never-ending unforgettable trip. But the highlights were elegant Hangzhou, beautiful Lijiang, breathtaking Shanghai, powerful Urumqi, and romantic Chengdu. We also

discovered the highly dynamic growing city of Shijiazhuang, the capital of Hebei province close to Beijing. China is like a continent in itself. Now I always get a funny feeling when I meet those selfproclaimed “China Experts” in Europe or the USA.

With your renewed annual sponsorship, you continue your commitment to support the work of the Beijing Chamber, which we would herewith like to thank you for…

No, I have to thank you. This sponsorship is only a small gesture to show our gratitude. The Beijing Chamber was from the start our guide through the intercultural risks and to the right people. We had the honour of hosting a Chinese delegation led by the First Vice Mayor of Shijiazhuang, his executive staff and a member of the ICC/NDRC in Berlin. Frankly, we ourselves had to look up “Shijiazhuang” on the map, but welcomed them as friends. Of course, we got a return invitation and when we first arrived, we were invited to numerous ceremonies, “ganbei”, memorandums and contracts. Now we have the option of land rights to a 10km2 plot and a RMB 30bn project there: the concept, planning and development of a German Applied Technology, Research and Development Park. We are deeply involved in the German research and education community, so the interests of the city and our profile fit perfectly. But without the feeling of security the Beijing Chamber gave us through their support, we would have been reluctant to say YES to this project. We are open for more partners in this project – research departments of German companies, or SMEs engaging in R&D. We will build new cooperations with big Chinese companies to offer personal onestop services including IPR protection. With the planned new high speed train station, you can soon reach Shijiazhuang in one hour from Beijing. This could be interesting for any company which can’t find land in Beijing but wishes to invest nearby.

NEW MEMBERS BEIJING + TIANJIN Mr. Udo L. Thiel Managing Director Block Transformatoren – Elektronik GmbH ' 010 4231-6780 * [email protected] Mr. Matthias Voss Partner Allen & Overy LLP, Beijing Office ' 010 6505-8800 * [email protected] Mr. Thomas Brosig Lawyer, Partner DS PPR & Partner ' +49-211 8289-290 * [email protected] Mr. Dirk Meissner Managing Partner EastStep Consulting Ltd. ' 010 6590-0158 * [email protected] Mr. Pierre Eloy CEO Leenderson Construction Materials sales (Beijing) Co., Ltd ' 010 1589 1436 888

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For full contact information and company profiles of our new and existing members please visit www.german-company-directory.com

* [email protected]

Mr. FENG Xingliang Chief Representative NRW Invest China/Beijing ' 010 6590-7066 * [email protected] Mr. Ruediger Neumann Executive Director/General Manager Schleifring Transmission Technology (Beijing) Co., Ltd ' 010 8048-6340 * [email protected] Ms. Rupali Steinmeyer Managing Director MetaDesign China Limited ' 010 8523-5788 * [email protected] Ms. ZHANG Shiyan General Manager LEMKEN Agricultural Equipment (Beijing) Ltd. ' 010 6590-7738 * [email protected]

Mr. WU Janhong Chief Representative Deutsche Boerse AG ' 010 6502-8300 * [email protected] Mr. Kevin Barry Peake Managing Director Webasto (Changchun) ' 0431 1594 3098 100 * [email protected] Ms. YU Huiying Site Manager Beijing Shanghai Bertelsmann Commercial Services Co. Ltd. ' 010 6590-7990 * [email protected] Dr. Richard van Kasteel * [email protected] Ms. Mareike Kiy * [email protected] Mr. Bernhard Kohn CFO Siemens Mechanical Drive System (Tianjin) Co., Ltd ' 022 1382 1952 205 * [email protected]

2011 April - May

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BUSINESS FOCUS

MEMBER NEWS SHANGHAI

MEMBER NEWS SHANGHAI

Every second wind turbine features a seal product from Freudenberg.

Freudenberg Supplies World's Largest Wind Power Market The international wind power equipment industry was hard-hit by the world economic crisis, with a severe fall in new capacity installed. Only China was unaffected, reporting the largest number of new wind power facilities, with a capacity of 14,000 to 16,000 MW, about half of the global figure. This makes China the world's largest wind energy market, and Freudenberg is playing a key role as a supplier. Every second wind turbine already features a seal product from Freudenberg. The company offers tailor-made seal and specialty lubricant solutions under the "Lube & Seal" brand. Simrit and NOK products have a market share of about a third. In addition, Freudenberg manufactures high-quality products at its Qingpu and Taicang facilities. The customers are Chinese wind turbine producers such as Sinovel Windtech, Goldwind, Baoding Tianwei Wind Power and SEWind.

Ipsen Launches New Plant in Changzhou As a leading supplier of heat treatment solutions, Ipsen is experiencing a great development in China. To meet the demand of business and production expansion, Ipsen has established a new company in Changzhou National Hi-tech District, Jiangsu province. The new facility occupies 6,000m 2 with workshop, offices and much more.

Changzhou Ipsen will start operations in April 2011. This new plant will share advanced technologies and mature managements with Ipsen Shanghai. As a supplement to the Shanghai plant, it will provide powerful support, benefiting the whole Group’s development. After the new plant begins operating, Ipsen China plans to increase its yearly turnover by approximately 35% in 2011.

METRO Promotes Cold Chain Development and Food Safety with Partners

CMS Appoints New Senior Associate

On 13 th January 2011, METRO Cash & Carry China and Shuanghui Logistics Investment Company Ltd. held a “Cold Chain & Food Safety Forum” in Shanghai. More than 100 delegates from the government, industrial associations, research institutions, suppliers and customers joined the event.

CMS China is pleased to announce the recent appointment of a new senior associate to strengthen its TMT team. Mr. Samuel Yang is an experienced lawyer in the telecommunications and broader IT industry. He advises on regulatory matters and a wide range of corporate and commercial transactions.

At the roundtable forum, experts and industrial leaders from trade, food, logistics and relevant industries held indepth discussions and shared expertise on “how to create the whole-process supply chain for fresh and safe food”. METRO Cash & Carry China's high standard and strict implementation of the industryleading cold chain logistics and food safety management, as well as its commitment to the healthy development of food industry

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were highly recognised and appreciated by the experts. Under an earlier cooperation agreement, Shuanghui Logistics will provide cold chain services to METRO Cash & Carry China for its 2,000 perishable food products.

Two of the deals CMS advised on in 2010 were nominated "Deals of the Year" by China Business Law Journal and one is featured in its February 2011 edition. Joyou’s IPO on the Frankfurt Stock Exchange was named one of the 2010 “Capital markets deals of the year – offshore IPOs & listings”.

Henkel Delivers Record Results Henkel recently re l e a s e d i t s 2 0 1 0 annual results. With a sales increase o f 11 . 2 % t o EUR 15,092mn, 2010 marks the best result ever in the 134-years-history of the company. “2010 was excellent. For the first time, we closed a financial year with an adjusted EBIT margin above 12%,” said Henkel CEO, Mr. Kasper Rorsted. “We have improved the market positions of all our business sectors and have further strengthened Henkel CEO, Mr. Kasper Rorsted says 2010 was an our top brands. We excellent year. have also been able to further expand our positions in the emerging markets.” The upward trend was most pronounced in the Asia-Pacific region: sales increased by 30.8% to EUR 2,168mn and EBIT grew by almost 120% to EUR 306mn. The Cosmetics/Toiletries business sector successfully continued its growth trend, the Adhesive Technologies sector performed exceptionally well, achieving a record high sales increase of 17.4% worldwide, with the highest growth rates in the Asia-Pacific region.

Behr Asia-Pacific Hosts Supplier Day 2011

S u p p l i e r D a y 2 0 11 – Mr. Markus Franetzki, Director Purchasing, Asia (Behr Asia-Pacific)

On 19th January 2011, the Purchasing and Quality Department of Behr Asia-Pacific located in Shanghai hosted its “Supplier Day 2011”. Invited were more than 150 guests from suppliers across Asia. Purchasing Asia Director, Mr. Markus Franetzki presented the Key Note issued by the Behr Group CFO, Mr. Hermann Tetzner.

Mr. Franetzki also gave an overview of the outstanding achievements made in global sourcing from Asia. China contributed to all major Behr Group locations worldwide with continuously high growth rates of more than 100% year-on-year. Chinese suppliers are becoming leading global suppliers on a number of commodities in the Behr Group. A day earlier, Mr. Franetzki invited the most important CEOs of Behr’s suppliers in Asia and China to a formal “CEO Dinner” attended by all Behr Group PU Directors.

2011 April - May

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MEMBER NEWS SHANGHAI

East Meets West at Body & Soul – Medical Clinics

Schaeffler Signs Strategic Cooperative Agreement with NGC and SANY

Dr. GOU Jianhui, Managing Director of Schaeffler Group Greater China, has recently signed a strategic cooperative agreement on behalf of Schaeffler Group Greater China with Nanjing High Accurate Drive Equipment Manufacturing Group Co. Ltd. (NGC) and SANY Group. As one of the ten most innovative enterprises in Germany, Schaeffler Group and its three main brands – INA, LuK and FAG – strive for innovation and quality. Schaeffler

Body & Soul welcomed two new colleagues in February 2011: Mr. Greg Livingston Ph.D. from the US and Dr. Dagmar Dreher-Spika, General Practitioner from Germany.

possesses advanced R&D and manufacturing technology for bearings and has advanced experience in the transmission industry. The strategic cooperative agreement signed by Schaeffler, NGC and SANY strengthened Shaeffler Group’s position in the field of gear box, machine tool and especially in wind power. It will lay a solid foundation for win-win results and for promoting the progress of the three enterprises in the industry.

Dr. Greg A. Livingston, Ph.D. is a licensed Traditional Chinese Medicine physician with over 15 years experience specialising in internal medicine. He is one of the few westerners to have completed a Chinese Medicine Ph.D. in China entirely in Chinese. Dr. Livingston earned his B.Sc. in Biology from the University of California, his fouryear M.Sc. in Chinese Medicine from Five Branches University, and his Ph.D. in Clinical Chinese Medicine from Zhejiang Chinese Medicine University. Dr. Dagmar Dreher-Spika is practicing as a GP in our Minhang clinic. She studied General Medicine (M.D./Ph.D.) at JustusLiebig-University in Gießen. In 2006 she finished her studies as Medical Specialist in General Medicine. Afterwards, she practiced in several hospitals in Germany and Switzerland.

LAR Opens a New Sales Office in Shanghai LAR Process Analysers AG – the German manufacturer of online analysers for the measurement of TOC, COD, toxicity and other parametres in water, waste water, surface water as well as many industrial applications – is growing in China. In March 2011, a new sales office in Shanghai was opened to meet the progressive re q u i re m e n t s o f t h e C h i n e s e m a r k e t taking an upward trend in the water field. Following the motto "Nice TOC You!", LAR AG and its subsidiary in Hangzhou will closely cooperate with the German network

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of the German Centre for Trade and Industry in Shanghai, w h e re t h e n e w f a c i l i t y i s located. Its new work force will support and strengthen the headquarters in Hangzhou by extending the provision of technical support and enforcing the approach of new markets and cooperations. Hence, LAR – both in Germany and in China is expecting another successful year to come.

Small but nice – LAR's new premises at the German Centre Shanghai

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REMONDIS First Joint Venture

Roland Berger President Publishes New Management Book

Mr. Charles-Edouard Bouée, President of Roland Berger Strategy Consultants, Asia, hosted a launch party for his new book "China's Management Revolution: Spirit, Land Energy" on 13th January 2011 at the J&E Mansion in Beijing, China with more than 40 guests attending.

On 18th January 2011, REMONDIS held the opening ceremony of its first joint venture in China, the Changchun FAW ZH REMONDIS Environment Technology Co. Ltd. Mr. Li Changjiang, Assistant General Manager of FAW Group and board member of FAW Comprehensive Utilization Co. Ltd, Mr. Yan Wen, Head of Changchun Environment Protection Bureau, Mr. Liu Jianmin, President of China National Resources Association and other local representatives attended the ceremony. From the German side, Dr. Karsten, Minister and Head of the Economic Department of the German Embassy in Beijing and Mr. Jan Noether, Chief Representative of the German Chamber of Commerce • Shanghai, were present.

In Mr. Bouée's book, he argues that the new and distinctively Chinese style of management fits the fast, unpredictable and volatile business world of today. The book has been warmly and widely acclaimed by readers from different fields. Roland Berger Global CEO, Mr. Martin Wittig joined the party as well, along with prominent scholars and influential media to celebrate the publishing of Mr. Bouée's first book. "This book is the bridge for Westerners to get to know China's management style," said Mr. Wittig. Many media, including FTChinese, Forbes wrote book reviews and recommended the book in their publications.

Changchun FAW ZH REMONDIS Environment Technology Co. Ltd. is a Sino-German joint venture company between Changchun FAW CU and REMONDIS Industrie Service GmbH & Co. KG (RIS). The main business scope of the JVC is the collection, treatment, disposal and recycling of industrial hazardous wastes. The company is the first of its kind in China producing refuse derived fuels (RDF) generated from solid hazardous wastes. By disinfecting and recycling of hazardous wastes and providing this recycled product to a local cement plant of the Yatai Group, the company not only saves energy and protects the environment, but also reduces the consumption of natural resources (e.g. coal) and improves efficiency of national resources utilisation. Furthermore, it will generate sustainable economic growth and take full advantage of preferential policies given by local government for setting up a circular flow economy.

TMD Friction Forms Aftermarket Alliance with Hella in China On 9th December 2010, TMD Friction signed an agreement with Hella KGaA Hueck & Co. to form an aftermarket distribution alliance, marketing strong brands, Textar and Mintex, and premium original products through an existing, established business platform. TMD Friction is a leading supplier in manufacturing brake friction components in Europe to both the OE and independent aftermarket sectors. On the other hand, Hella, with a hundred years history, is a worldwide precedent OE and aftermarket supplier for automotive parts and accessories. The alliance stems from TMD Friction’s growing sales and market share in the OE sector, which has prompted them to look at the potentials of aftermarket business in China. Taking money and time into consideration, TMD Friction chose Hella because they share the same philosophy, strategy and standards as TMD. Since Hella is able to adapt to the constantly changing market, both parties are confident in the alliance. 2011 April - May

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MEMBER NEWS SHANGHAI

Grand Opening of Puls Electronics in Suzhou

O n 1 6 t h N o v e m b e r 2 0 1 0 , P u l s ’ To p Management inaugurated the new Puls Facility in Suzhou. Besides a unique design, this building features a multitude of energy-saving and sustainable elements. This qualified the project for the LEED GOLD CERTIFICATE. BMP Construction Consulting (Shanghai) delivered the engineering and construction management in the design and the construction phases, while also conducting the LEED certification by in-house LEED APs. BMP Construction Consulting (Shanghai) Co. Ltd. is a Sino-German Engineering and Project Management Firm with more than 100 highly qualified engineers. The company has major activities in the industrial building sector, but especially in the automotive and pharmaceutical sectors.

Pullman Shanghai Skyway Receives “Golden Leave” Pullman Shanghai Skyway Hotel was awarded the “Golden Leaf” which is the highest honour authorised by the Shanghai Municipal Administration for great efforts in environmental initiatives. The hotel has not only built a “Building Administration” system, through which it can supervise and regulate the hotel boilers, air conditioning, elevators and lighting systems but also encourages guests to stay in non-smoking rooms and to recycle towels and bed sheets. All staff at the Pullman Shanghai Skyway have devoted themselves to make the hotel more eco-friendly and to create a “Green” atmosphere for their guests.

New Representative at INCREON INCREON - Agency for Naming, Branding and Marketing Communications with many years of experience in China - welcomes Mr. Sebastian Born as the new Marketing Communication Consultant and responsible Account Manager at its Representative Office in Shanghai. Mr. Born has worked for INCREON at the Munich based headquarters. Previously he worked several years in an international advertising network agency. He aims to increase the number of business contacts in China and to successfully continue initiating business contacts. In 2011, Mr. Born will take over the position as Chief Representative Officer.

SEEBURGER China Inc. Appoints New General Manager I n J a n u a r y 2 0 11 , S E E B U R G E R I n c . announced the appointment of Mr. Gang Huang to serve as General Manager of SEEBURGER China Inc. Mr. Huang is now responsible for sales, market development and China operations for SEEBURGER’s business in Greater China. He is also working with the company’s home office in Germany to leverage SEEBURGER’s global footprint. Before joining SEEBURGER, Mr. Huang was formerly with Daimler AG as Data processing Manager. He has strong B2B domain expertise and an extensive background in manufacturing industry, especially in the automotive industry. He is familiar with many enterprise information areas, including ERP, SCM, MRP, B2B/

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EDI, WMS, BI, DW/DM, etc. Mr. Huang graduated from Technical University Berlin in Germany with a “Diplom Informatiker” degree. SEEBURGER China Inc. thanks former GM Mr. Philip Zhang for his efforts and contributions in the last three years. From 2011 onwards, SEEBURGER will invest more to support its expanding China customer base and to guarantee continued successful deployments.

www.china.ahk.de

CWS-boco China Welcomes New General Manager

Mr. Mark Ju has taken on the position of General Manager for China at CWS-boco Laundry and Hygiene Service Co. Ltd. since September 2010. In this role, he is responsible for whole P&L of CWS-boco China. The main target for Mr. Ju in his new position is to launch the new CWS-boco service model in China, expand the business in Beijing and Shanghai area, and find new opportunities to set up new plants in different cities. Mr. Ju holds a degree as a bachelor of engineering and a diploma of management in CEIBS. He began his career in 1992 and specialises in Sales & Marketing, business development and public relationship. During the last 19 years, he took different career roles in Atlas Copco China/HK, Wuerth Shanghai, HARTING China and Xella China. CWS-boco is an international leading service partner for washroom hygiene, professional work wear and textile services, and cleanroom services on a rental basis. With over 70 laundries, 1,600 vehicles and 8,000 employees in 18 countries, CWS-boco is washing and processing every year around 140mn pieces of linen, 100mn garments, 31mn cotton towel rolls and 8mn mats at the high standards of quality for over 360,000 clients worldwide. CWS-boco’s headquarter in China is based in Shanghai.

Kindgee Becomes TOG Representative in China To leverage the full capacity of IT in business, enterprises try to develop adaptable enterprise architectures. Many are using The Open Group Architecture Framework (TOGAF™), the world leading enterprise architecture framework and architecture development method. For over 25 years, The Open Group (TOG), a vendor and technology neutral consortium, has been guiding industry standards that range from the Single Unix® Specification to TOGAF – addressing end-user companies' requirements such as portability and interoperability, security and reliability. As a Platinum Member of the Open Group, Kingdee has a seat in the Open Group Governing Board and continues to participate in the Architecture Forum. In 2009, Kingdee became the representative of The Open Group (TOG) in China and has translated key documents of TOGAF into Chinese to promote the adoption of TOGAF and enterprise architecture to the IT community in China and Asia Pacific region. Kingdee provides localised access to information, resources and certifications to educate users on TOGAF standard. TOG in China will soon introduce “international standard + IT implementation platform”, with “IT innovation application laboratory” in the near future. TOG China will not only promote TOGAF and provide training, but also provide members with life-cycle solutions.

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MEMBER NEWS SHANGHAI

Kuehne + Nagel Strengthens National Management Kuehne + Nagel Ltd. has appointed Mr. Alec Fu as Director Central China in January 2011. In his capacity, Mr. Fu is in charge of business development and general management of all Kuehne + Nagel’s branch offices in central China, including Chengdu, Chongqing, Ningbo, Nanjing, Wuhan, Xian and Xiamen.

Salans Promotes Dr. Iris Duchetsmann

Kuehne + Nagel is continuing its network expansion initiative in China. Growing local consumption coupled with the strong “Go-West” push prompt for the accelerated strengthening of Kuehne + Nagel’s presence in the country. In the course of the next twelve months, nine more new offices will be opened. In China, Kuehne + Nagel operates in 40 locations and employs around 3,000 people.

New Director and New Headquarters for S+E CHINA SHANGHAI Mr. Klaus List, who brings with him nine years of China experience, has transferred from Beijing to Shanghai as the new Business Developing Director of S+E CHINA. Previously, he was a Professor at the China Agricultural University in Beijing and studied Chinese at Liaoning Technical University. He also has a master degree in education and IT Technology from HAW, Hamburg. The head office of S+E CHINA Shanghai also moved to a new location (Room 1102, Building 42, Oriental Global Headquarter, Lane 118, Yong He Road, Shanghai) on 30th January 2011.

New Location for Burkardt Böhland & Partner Burkardt Böhland & Partner Rechtsanwälte, headed by Mr. Rainer Burkardt, has opened its new office on the 35 th floor of SOHO Donghai Plaza. Burkardt Böhland & Partner, a member of the EunaCon Consulting Group, shares its premises with EunaCon Finance Solutions & Services. The new location in the prestigious West Nanjing Road office district marks another step in strengthening the profile of the EunaCon Consulting Group as an integrated provider of consulting services to the German speaking corporate community in Shanghai by specialised “Old China-Hands”. Besides the law firm Burkardt Böhland & Partner and the finance consultancy EunaCon Finance Solutions & Services, the group also comprises the executive search firm EunaCon HR Solutions & Services, which continues to operate from its premises in Zhangjiang.

Waldorf Astoria Wins Best Contemporary Cuisine Pelham's New York Cuisine, signature restaurant at Waldorf Astoria Shanghai on the Bund, recently clinched its very first accolade as one of the six 2010/2011 Best Contemporary Cuisine Restaurants in Shanghai in the annual awards for Cuisine Map, organised by Modern Weekly and Martell Cognac. Pelham's is a harmonious pairing of classical and modern elements to create a formal, cosmopolitan yet intimate dining space. Subtle references to the Big Apple

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April - May 2011

are made in the materials herringbone wood and custom stone mosaic floors, leather panelled ceiling, an American penny ceiling and metal grillwork. A contemporary exhibition kitchen anchors the main dining area, creating a s e n s e o f t h e a t re a n d d y n a m i s m . The restaurant features an exquisite menu based on modern New York cuisine with innovative dishes and the freshest seafood. A unique wine display offers a wide selection of some 500 bottles.

Salans announced the promotion of Dr. Iris Duchetsmann to Of Counsel in the Shanghai office as of February 2011. Dr. Duchetsmann is the head of the China e m p l o y m e n t g ro u p . H e r e n d e a v o u r in developing the labour law practice, supported by her team members, lead to Salans’ recommendation in “Legal 500 Asia Pacific 2010/2011” for its employment practice. Dr. Duchetsmann specialises in advising on labour law in Germany and China. She also has extensive experience in advising aspects that involve cross-border employment and international HR management. Dr. Duchetsmann also provides advice on matters such as residency, tax and social security, and is an active contributor for labour law publications and seminars. "We wish her all the best in her new position and thank her, together with our labour law associate Ms. Cynthia Lijuan Zheng for their hard work in the past year," said Salans Greater China Managing Partner Dr. BerndUwe Stucken when congratulating her on the promotion.

New Managing Director at Control Risks Mr. Kent Kedl joined Control Risks Shanghai in January 2011 as Managing Director responsible for the overall commercial and business operations for Control Risks in Greater China, the Koreas and Mongolia. Mr. Kent came to China in the 1980s, working initially in education and later in the IT sector before moving into strategy consulting. Prior to joining Control Risks, Kent was Vice President and General Manager at Technomic Asia, a boutique strategy consulting firm. Mr. Kent’s expertise lies in helping foreign companies understand the unique challenges in Asia and design and execute strategies to establish and grow sustainable operations. At Control Risks, Mr. Kent leads a multidisciplinary team of consultants that specialise in helping clients manage the political, security, operational and integrity risks that come with doing business in China and internationally.

Ms. Azure Cao and Mr. Martin Kuroczik Join Asia Briefing Asia Briefing, Dezan Shira & Associates’ company, welcomes two new additions. Ms. Azure Cao was appointed as East China Senior Marketing Executive at the start of 2011. She is in charge of distributing AB’s magazines and books, organising events and syndicating articles. Miss Cao, fluent in English and Mandarin, graduated with a double major in Business Management and Marketing from Seattle University. Mr. Martin Kuroczik started his role as German language Editor in October 2010. He is writing, translating and researching content for “China Aktuell”, the daily China news section of the German China Briefing website alongside the printed magazine, as well as sourcing contributions through collaborations. Mr. Kuroczik is fluent in German and English, speaks intermediate Mandarin and obtained a Master’s degree in International Political Economy from Leeds University. 2011 April - May

21

BUSINESS FOCUS

NEW MEMBERS SHANGHAI

NEW MEMBERS

For full contact information and company profiles of our new and existing members please visit www.german-company-directory.com

SHANGHAI

Prof. Arnaud Baril Managing Director Dynabond Power Tech Service Ltd. | Beijing ' 010 6468-1222 * [email protected] www.dynabondpowertech.com Mr. Philippe Bouquiaux Head of Global Sourcing and Bogie Bombardier Transportation Consulting (Shanghai) Co. Ltd. | Shanghai ' 021 6105-4800 * [email protected] www.bombardier.com Mr. Thomas Brosig Lawyer & Partner DS PPR & PARTNER Düsseldorf, Germany ' 0049 211-828-929-0 * [email protected] www.dsppr.de Mr. Chiang Kaiyuan General Manager Detectomat Safety Products (Kunshan) Co. Ltd. | Kunshan, Jiangsu ' 0512 5519-8100 www.detectomat.de www.job-bulbs.com Mr. Dirk de Cuyper General Manager Waldorf Astoria Shanghai on the Bund Shanghai ' 021 6322-9988 * [email protected] www.waldorfastoria.com Mr. Olaf Detlef General Manager INTORQ (Shanghai) Co. Ltd. | Shanghai ' 021 6828-4790 * [email protected]; [email protected] www. intorq.com Prof. FENG Xin General Manager Siemens Power Automation Nanjing, Jiangsu ' 025 5117-8521 * [email protected] Mr. Allan Finn CEO MWB (Shanghai) Co. Ltd. | Shanghai ' 021 2408-4899 * [email protected] Mr. Florian Fritz Shanghai ' 021 6173-2388 * florian.fritz@ sha.senator-international.com Dr. GONG Li General Manager SUSS MicroTec (Shanghai) Co. Ltd. Shanghai ' 021 5234-0432 ext. 102 * [email protected] www.suss.com

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Mr. Mirko Grüber Shanghai ' 021 3759-5585 * [email protected] * [email protected] Mr. HUANG Junbo General Manager S + E China | Shanghai ' 021 5237-0707 * [email protected] www.se-china.cn Ms. HUANG Zheng General Manager Admatec Hong Kong Co. Ltd. | Hong Kong ' 00852 8173-6146 * [email protected] Mr. Benjamin Kille Regional MIO Asia Pacific cargo-partner Logistics (China) Ltd. | Shanghai ' 021 6195-3812 ext. 0 * [email protected] www.cargo-partner.com Mr. Bert Krummrei General Manager TQ Electronic Equipment (Shanghai) Co. Ltd. Shanghai ' 021 3994-3010 * [email protected] www.tq-group.com Mr. John Lee Senior VP Asia Pinkerton Consulting Services (Shanghai) Ltd. | Shanghai ' 021 6103-3499 * [email protected] www.pinkerton.com Ms. LI Huini Salary Partner ADAMAS Attorneys-at-law Shanghai Representative Office | Shanghai ' 021 6289-6676 * [email protected] www.adamas-lawfirm.com Dr. LIU Bin President & CEO ERBE China Ltd. | Shanghai ' 021 6275-8440 * [email protected] www.erbechina.com Ms. LIU Leqi Representative MTU Aero Engines GmbH Shanghai Representative Office | Shanghai ' 021 5027-3522 * [email protected] www.mtu.de Ms. Canyue Mäck General Manager Miji Electronics and Appliances (Shanghai) Ltd. Shanghai ' 021 5169-2010 * [email protected] www.miji.com.cn

Mr. Norbert Meuser General Manager Viscom Machine Vision (Trading) Shanghai Co. Ltd. | Shanghai ' 021 6161-9368 * [email protected] Mr. Thomas Mueller General Manager SHERATON SHANGHAI HONGQIAO HOTEL Shanghai ' 021 6275-8888 * [email protected] sheraton.com/hongqiao Dr. Gerald Neumann Director/ General Manager WOTAX Management Consulting (Shanghai) Co. Ltd. | Shanghai ' 021 5081-2266 ext. 1852 * [email protected] www.wotax.de Mr. PAN Liping Managing Director Suzhou Draka Cable Co. Ltd. Suzhou, Jiangsu ' 0512 6578-9888 * [email protected] www.draka.com.cn Dr. QIU Hualai General Manager Festo (China) Ltd. | Shanghai ' 021 6081-5100 * [email protected] www.festo.com.cn Mr. Jens Richter Managing Director Multivac Packaging Equipment Ltd. Shanghai ' 021 3701-8118 * [email protected] www.multivac.cn Mr. Koen Rommel VP - Sales Bosch (Shanghai) Security Systems Ltd. Shanghai ' 021 6317-2155 * [email protected] www.cn.bosch.com Mr. Matthias Schaefer General Manager Walton HK Group Limited Hangzhou, Zhejiang ' 0571 8735-2720 * [email protected] www.walton-hk-group.com Mr. Frank Schmitt Technical Director BOA (Shanghai) Bellows Technology Co. Ltd. Shanghai ' 021 5818-7112 * [email protected] www.boa-china.com Mr. Gerhard Seizer Shanghai ' 021 5228-8112

www.china.ahk.de

* [email protected] www.wilddesign.cn

Dr. SHANG Erbing CEO / Managing Director China SAERTEX reinforcements China Co. Ltd. Taicang, Jiangsu ' 0512 3333-7770 * [email protected] www.saertex.com Mr. SUN Yuqiang General Manager Benteler Automotive (Shanghai) Co. Ltd. shanghai ' 021 3976-1088 * [email protected]

Mr. Reiner Waffenschmidt Chief Representative Lenord, Bauer & Co. GmbH Obrehausen ' 0049 208-9963-0 * [email protected] www.lenord.de Mr. WANG Weiguo Vice President SLC Siemens Ltd., China Jiangsu Branch Nanjing, Jiangsu ' 025 8456-0550 * [email protected] www.siemens.com.cn

Ms. TANG Huiqin Chairman Zhe Jiang Jiyou Leisure Products Co. Ltd. Huzhou, Zhejiang ' 0572 290-9316 * [email protected] www.jojoy-leisure.com

Mr. George Wee General Manager Shanghai Pudong Kerry City Properties Co. Ltd. Pudong Kerry Hotel Shanghai ' 021 6169-8888 * [email protected] www.shangri-la.com

Mr. Vincenzo Tumminelli General Manager Shanghai Paul Wurth Metallurgical Equipment Manufacturer Co. Ltd. | Shanghai ' 021 6118-6300 * [email protected] www.paulwurth.com

Mr. Nick Winderlich Head of Jas Projects China JAS Forwarding (China) Co. Ltd. Shanghai ' 021 5489-6968 * [email protected] www.jaschina.com

Mr. De Vuong Shanghai ' 021 6547-4891 * [email protected]

Mr. Dirk Wortmann Executive Director SimPlan Technology Consulting (Shanghai) Co. Ltd. Shanghai

' 021 6137-6091 * [email protected]

www.simplan-china.com

Mrs. Stefanie Xia-Bramekamp HR Director Lenze Drive Systems (Shanghai) Co. Ltd. Shanghai ' 021 5046-0848 * [email protected] Mr. XU Jing Project Manager Armstrong Advanced Flooring (China) Co. Ltd. Shanghai ' 021 6391-3366 * [email protected] www.armstrong.cn Mr. YE Weidong General Manager EMCO Building Technology (Chuzhou) Ltd. Chuzhou, Anhui ' 0550 356-7500 * [email protected] www.china-emco.com Mr. ZHANG Yunhua Rosenberger Asia Pacific Electronic Co. Ltd. Shanghai Division | Shanghai ' 021 5899-5997 * [email protected] www.rosenberger.de

2011 April - May

23

BUSINESS FOCUS

MEMBER NEWS SOUTH & SOUTHWEST CHINA

MEMBER NEWS

SOUTH & Southwest CHINA

Managing Director, Mr. Klaus Jacuk reflects on how his company has developed

Happy Birthday IKA Works Guangzhou All employees of IKA Works Guangzhou had a toast on their company’s 10 th anniversary on 13 th January 2011. The celebrations took place at The Westin Guangzhou, where Managing Director Mr. Klaus Jacuk gave an inspiring speech about the enterprise’s rapid growth during the last decade. The manufacturer of laboratory and analytical equipment f o c u s e s v e r y m u c h o n i t s “ We a re Family”-culture. This approach within the company is highly recognised and appreciated by the employees. Thus, the dinner buffet was followed by performances from the staff, featuring opera, a dancing performance, and instrument playing sessions as well as a chorus and even a model show. The delightful event was topped by the announcement of the Incentive Plan 2011 which is aiming to reward outstanding employees since 2007. This year, the first prize was a ten-day-vacation in Germany.

Quality Matters Most

1st ICCS E-Freight Forum in Shenzhen

Continuous product innovation and strict quality management – two reasons to award Linde (China) as the “2010 Fujian Top Brand Product”. On 6 th December 2010, Mr. Li Chuan, Vice Governor of Fujian Province, handed over the award to Linde (China) CEO Mr. CP Quek. Selected among famous brands in Fujian Province, the manufacturer of forklift trucks has long been known for its high reliability in China and around the globe. “With this award, we are going to work even harder to ensure that we deliver consistently good quality products and to remain the top brand in our industry,” said Mr. CP Quek during the press conference held by the Fujian Provincial Government.

ICCS (International Cargo Centre Shenzhen) successfully organised the 1 st E-Freight Forum in Shenzhen on 16th February 2011 in cooperation with SZATA (Shenzhen Aviation Transportation Association) and the German and European Union Chamber of Commerce in South China. 75 participants joined and learnt about one of the hottest topics in the air cargo industry. The initiative is promoted by IATA and is one of five “simplifying the business” projects that should replace paper documents with electronic messages. It is already implemented by Beijing and Tianjin

Mr. CP Quek, CEO of Linde (China) received the award from Mr. Li Chuan, Vice Governor of Fujian Province (Right)

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April - May 2011

Top speakers from the industry (left to right): Mr. Markus Witte, Head of Technology & Innovation, Lufthansa Cargo; Mr. Oliver Neerfeld, Head of Competence Center, Traxon; Mr. Li Yang, IATA North Asia IDFS Director; Mr. Dieter Oppel, Managing Director, ICCS.

Airport in mainland China. Guest speakers of the forum included high ranking industry experts and government officials.

Jebsen and TCG Unitech Form Joint Venture in China On 15 th February 2011, Jebsen Group and Austrian partner TCG Unitech announced the formation of a new joint venture: JebsenTCG Automotive Systems. The new JV will manufacture high-performance state-of-theart oil pumps for China’s rapidly growing automotive industry in the new Dalian development zone. Spanning 1,250m 2, the RMB 20mn plant is Jebsen’s second joint venture in Dalian. Following the Chinese government’s call for auto manufacturers to increase energy efficiency and reduce fuel consumption by investing in technology upgrades, Jebsen is one of the first to bring such advanced manufacturing technology from abroad to China. With advanced composite material and precision components ensuring high

performance and reliability across the full range of operating conditions, the oil pumps help reduce emission and improve engine life. The production facility has an installed capacity of 600,000 pumps per year. It began serial production in March 2011.

Producing high-performance oil pumps in Dalian: the new Jebsen-TCG Automotive Systems Joint Venture

www.china.ahk.de

New Arrivals for Wragge & Co’s Guangzhou Office

New arrival from Wragge’s London office: Mr. Ben Cooke.

Wragge & Co has boosted its capabilities in China with a number of new appointments to its Guangzhou-based team. Legal advisers Mr. Leo Rong and Ms. Edith Ruan are both Chinese-qualified lawyers. Mr. Rong advises international companies on corporate and commercial matters and also assists in daily managerial-related legal issues such as setting-up, employment and tax. Ms. Ruan is an expert in intellectual property

Expansion Strengthens Oiltanking’s Position 18 new product tanks with a total capacity of 59,600m3 - Oiltanking Daya Bay Co. Ltd. successfully commissioned its newly added Phase 2 expansion storage capacity and received its first vessel at its public jetty in Daya Bay, China. The total capacity for chemical products now reaches 80,150m3 and is supported by a total of two vessel berths. Huizhou Daya

Bay Oiltanking Petrochemical Public Jetty Company Ltd. (“OTPPJ”) invested RMB 120mn by adding two 5,000dwt berths. The very first vessel bound for East China, M.T. Jian Xing 32, has now been successfully loaded with 1,500t of Methyl Methacrylate (MMA). The expansion further strengthens Oiltanking’s position for the Daya Bay Petrochemical Industrial Park.

New Tank Farm of Oiltanking Daya Bay near South China Sea

Best Business Hotel for the 3rd Consecutive Time event was organised by Travel&Leisure Magazine, the well noted ChineseEnglish bilingual magazine in fashion and leisure area in Mainland China, and it’s Golf Magazine. The selection process integrated the views of readers, industry Mr. Bertrand Courtois and his team with “The Best Business Hotel” award experts, magazine editors, and thirdSofitel Wanda Chengdu has been awarded party experience and can be described as fair the “The Best Business Hotel” by the and objective. The winners are all live up to Travel&Leisure Magazine for the 3 rd their names and Sofitel Wanda Chengdu is consecutive time. The 2010 Annual Travel very pleased to be able to continue to deliver Awards & 9th Anniversary Celebration was reliable services to its business travelers. held on 20 th January 2011 in Beijing. The

matters, specialising in trade mark filing, patent enforcements and claims of unfair competition. The team’s latest arrival is Mr. Ben Cooke, an English-qualified commercial contracts lawyer seconded to China from Wragge & Co’s London office. Mr. Cooke will be working closely with Mr. Rong on a full range of corporate and commercial matters.

New German Executive Chef in Guangzhou C h e f M a n f re d K n o e p f l e j o i n s C h i n a Hotel, A Marriott Hotel from Marriott Shanghai Changfeng Park as Executive Chef. Originally hailing from Germany, he is no stranger to Asia and has already demonstrated his skills while working for the Guangzhou Oktoberfest 2010. With a culinary background spanning the globe, Chef Knoepfle has spent time perfecting his skills in Asian locations such as Thailand, Cambodia and Myanmar. In China, he has worked in Beijing, Chengdu, Shenzhen, Shanghai and Xi’an. With a personal mantra of taking a “guest oriented approach” when creating, preparing and executing his dishes, Chef Knoepfle is excited to be a part of the largescale operation that China Hotel, A Marriott Hotel has to offer. Drawing inspiration from past work experiences, he is eager to showcase the tastes of Europe, South East Asia, the Middle-East and China to present the guests with a unique well-rounded dining experience.

Chef Knoepfle brings new tastes to Guangzhou

2011 April - May

25

BUSINESS FOCUS

MEMBER NEWS SOUTH & SOUTHWEST CHINA

Fitness in Guangzhou Has a New Address Get fit in the newly opened personal training studio by Personal Trainer & Strength Coach, Mr. Sascha Telen, the only trainer in Mainland China with a Level 2 Certification in kettlebell training by the IKFF (International Kettlebell & Fitness Federation). The 100m2 former office was transformed into an ideal workout area, giving space for his mostly international clients and some future kids training. His functional training approach aims to improve one’s strength and conditioning in a holistic healthy way. The gym features advanced training equipment such as Kettlebells, TRX Suspension Training, power rack, and much more. Mr. Sascha Telen has been operating as a personal trainer in Guangzhou for five years as well as providing corporate wellness coaching to international companies in the Pearl River Delta. His new studio is located in Room 807, Xiang Long Tower, Xiang Long Garden, No. 177 Tianhe North Road, Guangzhou.

Balluff Expands Production Capacities in Asia

Conquering the Asian market from west China: Balluff production in Chengdu

The global sensor specialist and connectivity provider Balluff from Neuhausen a. d. Fildern expanded its presence significantly in Asia at the beginning of 2011. The capacities of the production plant in Chengdu, China, which was newly built in 2004, have been enhanced. In addition to inductive and electromechanical sensors, displacement transducers are now also manufactured there. The capital city of the Chinese province Sichuan is thus becoming the company's most important production location for conquering the Asian and Chinese market. Customers are benefiting from shorter delivery times, optimised logistics and a comprehensive service directly on site. Balluff GmbH, which in addition to Chengdu also has six other modern production sites in Germany, Hungary, Switzerland, Japan and the USA, employs 2,200 people worldwide and provides a full range of high-quality sensors, accessories and application specific customer solutions for all areas of factory automation.

NEW MEMBERS

SOUTH & SOUTHWEST CHINA Mr. Martin Bannwart General Manager Schurter Electronics Shenzhen Ltd. Shenzhen ' 0755 2994-0066 * [email protected] www.schurter.com Mr. Andreas Barthelt Director Mega Step Technology (Shenzhen) Ltd. | Shenzhen ' 0755 8630-7400 * [email protected] www.megastephk.com Mr. Thomas Brosig Partner DS Avocats | Guangzhou ' 020 8121-8669 * [email protected] www.dsppr.de Mr. Christoph Alexander Cordes Representative Club of Style China Ltd. | Shenzhen ' 0755 2230-1372 * [email protected] www.fashion4home.de Mr. Bertrand Courtois General Manager Sofitel Wanda Chengdu ' 028 6666-9999 * [email protected] www.sofitel.com

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April - May 2011

For full contact information and company profiles of our new and existing members please visit www.german-company-directory.com

Mr. John Dorris Founding Associate Sino-Associates Global Ltd. | Shenzhen ' 0755 8662-1995 * [email protected] www.sino-associates.com

Mr. Jean-Philippe Jacopin General Manager Hilton Chongqing | Chongqing ' 023 8903-999 * [email protected] www.hilton.com

Mr. Frank Melchert Director Fecos Company Limited | Shenzhen ' 00852 3078-7738 * [email protected] www.fecosltd.com

Ms. Daniela Faustino Managing Director Elka Pieterman Asia Ltd. | Hong Kong ' 00852 2915-7211 * [email protected] www.elka.com.cn

Mr. Peter von Jan Raylase AG | Germany ' 0049 9173-3927-452 * [email protected] www.raylase.de

Dr. Siegfried Merz Certified Public Accountant Tax Adviser, Lawyer | Merz Arnold Wüpper Consulting | Germany ' 0049 6151-3894-0 * [email protected] www.merz-arnold-wuepper.de

Mr. Manfred Fritz General Manager Guangzhou German Xiao Machinery Co. Ltd. | Guangzhou ' 020 3731-4090 * [email protected] www.gxm-tec.com Mr. Roland Groeppler CEO G&G Engineering Ltd. | Ireland ' 00353 9632-21 * [email protected] www.gandgengineering.com Mr. Thomas Hambloch OPS-INGERSOLL Machine Tool (Shanghai) Co., Ltd. | Shenzhen ' 0755 8639-7538 * [email protected] www.ops-ingersoll.com.cn

Mr. Axel Knörl Managing Director Bierhaus Shekou | Shenzhen ' 0755 2669-9591 * [email protected] www.bierhauschina.com Mr. Juergen Kracht Managing Director Fiducia Management Consultants Ltd. Shenzhen ' 0755 8329-2303 * [email protected] www.fiducia-china.com Ms. Melissa Lue General Manager Shenzhen Merkle Machinery Co. Ltd. | Shenzhen ' 0755 8882-7556 * [email protected] www.ahp.de

Mr. Jens Muenchow General Manager Fresenius Kabi (Guangzhou) Co. Ltd. Guangzhou ' 020 8222-3069 * [email protected] www.fresenius-kabi.com Dr. Martin Sonnek General Manager Shenzhen Ou Ya Nike Technologies Co. Ltd. | Shenzhen ' 0755 8147-6274 * [email protected] www.oyntech.com Mr. George Zhu Area Director Dextrys Co. Ltd. | Guangzhou ' 020 8107-8424 * [email protected] www.dextrys.com

Welcome to visit us in the 16th Beijing Essen Welding & Cutting Fair, from 2011.06.02 to 05 in Shanghai New International Expo Centre, Hall E3, Booth E3722, Shanghai, China

EWM焊接技术扎根中国

以德国最先进的技术服务于中国和亚洲 EWM WELDING TECHNOLOGY MADE IN CHINA

GERMAN STATE-OF-THE-ART TECHNOLOGY FOR CHINA AND ASIA

手弧焊 MMA welding

钨极氩弧焊 TIG welding

熔化极气体保护焊 MIG/MAG welding

等离子焊

PLASMA welding

最领先的焊接技术，最佳的焊接效果，最可靠的设备和最高的质量是我们 在焊机研发和生产中的指导思想。 我们的产品已遍布全球，包括世界上所有工业行业中的众多著名企业都信 赖和使用我们的产品。EWM在中国以伊达高科焊接(昆山)有限公司为生产 和服务基地，用德国领先的焊接技术来服务于中国各领域的高速发展： 从汽车工业，到船舶工业直至航空航天工业。 无论是手弧焊，钨极氩弧焊，熔化极气体保护焊还是等离子焊， EWM的技术和产品是完成您的焊接任务的最佳选择。 The best possible welding results thanks to hightech and maximum quality and reliability are the guiding principles in the development and production of our machines. Well-known companies from all sectors of industry around the world rely on our products. From its location in Kunshan, China, EWM ships welding technology in German state-of-the-art quality in many different growth areas: from the car industry to shipbuilding right through to air and space travel. Whether EWM MMA, TIG, MIG/MAG or Plasma technology - always the best solutions for your welding tasks.

EWM HIGHTEC WELDING (Kunshan) Ltd. 10 Yuanshan Road, Kunshan New & High-Tech Industry Development Zone, Kunshan, Jiangsu, 215300 P.R.China 伊达高科焊接(昆山)有限公司 江苏省昆山市昆山高新技术产业开发区圆山路10号 邮编: 215300 Phone: +86(0) 512 57867188 · Fax: +86(0)512 57867182 www.ewm.cn · [email protected]

伊达高科焊接 (昆山)有限公司 EWM Kunshan, China

伊达高科焊接德国总部 EWM Mündersbach, Germany 2011 April - May

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BUSINESS FOCUS

COVER STORY

China’s Five-Year Plans China’s policy process is not known for surprises; rather, reflecting the heritage of a command economy and the engineering background of many senior leaders, the Chinese policy establishment prefers a predictable and steady regulatory environment conducive to meeting its long-term development goals. China’s Five-Year Plan for National Economic and Social Development (FYP) is a critically important tool used by the government to achieve its development objectives by mapping out in five-year cycles the country’s future progress via guidelines, policy frameworks, and targets for policymakers at all levels of government.

The Twelfth Five-Year Plan The two-year drafting process for the 12th FYP (2011-2015) is at its end: on 14th March 2011, nearly 3000 delegates at the 4th Plenary Session of the 11th National People’s Congress gave the 12th FYP final approval. The 12 th FYP emphasises the quality, rather than the quantity, of growth, and ensures that more Chinese citizens benefit from China’s development. To meet this objective, the 12th FYP focuses on economic restructuring, social equality, and environmental protection.

China’s Twelfth Five-Year Plan What’s in Store for the Next Five Years 28

April - May 2011

Promoting Social Equality President Hu Jintao and Premier Wen Jiabao have made development of a “harmonious society” a key priority for their administration, and the 12th FYP continues their focus on spreading the benefits of economic growth to a wider community. Key measures in the 12th FYP to support this goal include income tax reforms, minimum wage increases, and strengthened social safety nets. Protecting the Environment The 12th FYP will tackle China’s severe environmental degradation by including both hard and soft targets for reducing pollution, increasing energy efficiency and ensuring a stable, and a reliable and clean energy supply. Restructuring the Economy While economic rebalancing has been a government priority for many years, the sharp decrease in Chinese exports during the financial crisis, leading to the layoff of millions of factory workers, underscored the importance for Chinese decision-makers of moving to a more balanced growth structure. As China looks inward for growth, key goals for the 12th FYP are to shift the relative importance of GDP components – from the current reliance on fixed asset investment (FAI) and exports – to a greater emphasis on consumption. The 12th FYP will include policies that support a lower GDP growth rate, consumption-driven growth, upgraded industries, backing for the government’s indigenous innovation drive, strengthened “national champions,” and the development of “Strategic Emerging Industries” (SEIs).

Technology & the 12th Five-Year Plan Transitioning from “Made in China” to “Designed in China” has long been a top priority for China’s government, but the country faces serious hurdles in making that crucial shift: an education system that rewards rote memorization over creative thinking, rampant plagiarism and corruption in higher education, top Chinese minds leaving the country to pursue careers abroad, and an economy skewed towards low-skilled manufacturing. The 12th FYP includes provisions to mitigate these problems, including the

www.china.ahk.de further development of China’s intellectual property rights system, heavy investments in science and technology education and R&D, and strong support for SEIs. As the government is clearly intent that local companies participate in key technological advances, China’s indigenous innovation drive will continue to play a central role throughout the 12th FYP. Indigenous Innovation Reinforced China hopes to improve indigenous innovation capabilities in technology through the use of several tools, including:

an aim to increase SEIs' contribution from approximately 5% of GDP today to 8% by 2015 and 15% by 2020. This policy underscores the importance China is attaching to developing core technologies as a means of enhancing industry competitiveness, and the plan outlines preliminary broad measures to increase technological innovation across all seven SEI sectors. For the energy efficiency and environmental conservation sector, for example, the aim is to develop technology for energy-efficient, resource recycling, and advanced environmental products. For new energy, a focus will be on the application of solar-power technologies. For biotechnology, a key component will be the application of core technologies for biological manufacturing and marine biology products. The technology-specific SEI, next-generation IT, is focused on accelerating the creation of next-generation information networks, mobile communication and the Internet. The government also plans to invest in R&D of the "Internet of things" and cloud computing, and digital and virtual technologies.

• Research & Development: The government will heavily invest in science and technology R&D in order to bring about key breakthroughs in targeted technology subsectors, such as core electronic devices, integrated circuits, life sciences, space, marine, earth sciences and nanotechnology. • Intellectual Property: China plans to continue its efforts to strengthen IPR creation, use, protection and management, particularly through support for companies that provide those services. This is an area Sector Snapshot: Automobiles where there is much room for progress. • Administration: The 12 th FYP plans to The aim to develop and apply core technology strengthen fiscal and financial policies is certainly not limited to the SEIs. According that support high-tech industry, including to the 12th FYP for the Automotive Industry, a updating research funding management and key aim is to enhance support for R&D in this venture capital investment systems. sector so that major Chinese automotive groups • Commercialisation: A key goal - and can independently develop product platforms challenge - for China will be to get the that are close to leading global standards. The research undertaken at governmentgovernment’s goal is for Chinese brands to s p o n s o re d u n i v e r s i t i e s a n d re s e a rc h control more than 10% of the domestic export institutions to the marketplace. The market by 2015. government hopes that both large enterprises and SMEs will increase their R&D investments as well.

In January 2011, the State Council provided a first look at the policy tools the government may use to develop SEIs: Several Policies to Further Encourage the Development of Software and Integrated Circuit Industries (also known as Document 4) refers to both the software and integrated circuit (IC) industries as "strategic emerging industries" and contains 31 incentive measures for these industries’ development, including preferential tax rates, central government investment plans, increased R&D funding channels, and stronger IPR protection.

“Informatisation” Increased The 12th FYP will focus on upgrading the technological capabilities of private and public services, including “triple play” services (the convergence of telecom, broadcasting and Internet networks), e-commerce, and e-government and statistics systems. Education Sees Heavy Investment The 12th FYP stresses the need for higher education reform in science and technology, as well as the importance of developing a human resources strategy for finding and nurturing talent. Initiatives include improving scientific achievement evaluations and rewards system, encouraging even more highly-educated overseas Chinese to return to China to work and increasing investments in human capital. Strategic Emerging Industries Heavily Supported No longer content with being considered the “world’s factory,” Chinese planners have included several preferential tax, fiscal and procurement policies designed to develop seven “Strategic Emerging Industries” (SEIs). The planners hope these industries will become the backbone of China’s economy in the decades ahead, and they have chosen sectors where Chinese corporations are expected to succeed on a global scale. The seven industries are biotechnology, new energy, high-end equipment manufacturing, energy efficiency and environmental conservation, clean-energy vehicles, new materials, and nextgeneration IT. The government is reportedly prepared to spend up to RMB 100bn on these industries during the 12th FYP period, with

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While Document 4 is limited to two specific sectors, it offers a good indication of how other SEI industries may be treated moving forward.

Implications for Foreign Technology Companies SEIs present both opportunities and challenges The government’s plan to increase SEIs' share of GDP by government investment and fiat should yield significant opportunities for foreign technology companies due to the incentives that will be created for private investment. However, given China’s current drive to develop its indigenous innovation capabilities, these preferential policies may be biased toward domestic firms. This could be additionally problematic if the government decides to use its government procurement market to develop these industries, given its earlier pledge to develop a national procurement list that favors domestic companies. Foreign firms must also be aware of the government’s proclivity to “re-innovate” foreign technology. Either way, foreign businesses should monitor China’s SEI policy closely and look for opportunities to inject comment and input into its development. Foreign firms may also consider the use of partnerships with local companies to better access the significant funding opportunities available. Changes to the business environment If the 12th FYP objectives are fully implemented, foreign business can expect costs to both rise and fall. For companies in the technology sector, increased costs could result from proposed minimum wage hikes, pension and healthcare reform, and value-added tax hikes. However, there are benefits to foreign business embedded is this plan, as well. Foreign companies can expect the government to further develop its talent recruitment through education reform and strengthening the country’s IP regime. A more complex operating environment Proposed reforms in the 12 th FYP will introduce additional stakeholders into various industries. Foreign business should continue to update their understanding of relevant stakeholders emerging as a result of the 12th FYP, the development of SEI and other reforms, and begin developing targeted engagement strategies. The plan will also likely introduce a host of new regulations. A clear understanding of the changes in China’s regulatory environment as a result of these developments, coupled with robust relationships with key institutions and actors involved in its execution, will enable foreign business to better monitor potential issues and effectively inject their views into the policy process. Seeking assistance from foreign businesses The implementation of the 12 th FYP objective to increase technological capabilities in a wide range of sectors will have Chinese regulators welcoming advice and training from experienced foreign companies, offering an opportunity to help guide implementation. This assistance could range from informal consultations to more formal programs including foreign-established R&D bases in China. Mr. Roger Somerville is Director at APCO Worldwide, a communications and public affairs consultancy with a presence throughout Greater China (Beijing, Shanghai, Guangzhou, and Hong Kong), as well as over 25 other global cities. For more information please contact him at: * [email protected]

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Green-Fuel The 12th Five-Year Plan Sketches New Energy and Environmental Technology

The preceding 11th FYP having marked the transition toward a more gentle and sustainable development of the economic and social system, the 12th FYP focuses on inclusive growth quality rather than exclusive growth quantity. Centering on economic restructuring and social rebalancing, the 12th FYP also assigns environmental protection and conservation a momentous prominence.

A New Cycle The priorities that were defined for industrial policies in the upcoming five years substantially differentiate from past strategies. Setting the foundation for the overall economic aim of global expansion, they represent an unprecedented political directive for the prospective development of the country and facilitate a new, environmentally friendly course of economic action. The “green development” baseline for the next five years undoubtedly signals a comprehensive green modernisation of China ahead. The crucial motor to continuing and developing economic growth and maintaining a stable and strong world ranking is a consistent assurance of the energy sources backing the world’s second largest economy. Consistently, the 12th FYP addresses the core areas energy efficiency, renewable energy as well as hi-tech and new materials. One focal subject is the improvement and advancement of energy efficiency, considering China’s still significantly low energy utilisation ratio - one fourth - to the developed nations. Three of the seven key Strategic Emerging Industries (SEIs) anchored in the 12th FYP are devoted to the sectors Energy and Environment: • New Energies: Development and advancement of nuclear energy as well as the renewable energies water, wind and solar • Energy Efficiency: Waste recycling and recycling based economy as well as clean coal technologies and coal production emissions reduction • Electromobility: Battery cell technology and a production target of 1mn electrically powered vehicles by 2015. During the policy period of the 11th FYP, the government was able to generate additional financial activity totaling RMB 2bn through investments in energy efficiency and environmental protection, and this new term aims to trigger the flow of an additional RMB 3bn into the environmental industry. The 12th FYP pronounces China’s intention to reach its ambitious energy efficiency targets by means of investments in production engineering and facilities, and the anticipated growth of between 15 and 20% offers spacious potential for international cooperation. The declared investment volume of RMB 4bn allocated to

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led Prospects Green Business Environment for German in China energy conservation and emissions reduction technology alone in the five years to come offer a broad scope of action.

The German Advantage This new set of environmental goals also opens up doors of opportunity specifically to the German economy with its export-oriented outlook and solid know-how foundation. The Hi-tech and Environmental domain in general and the Clean Energy and Energy Efficiency sectors in particular provide a continued attractive market segment for German technologies, services and goods. Numerous high-ranking federal and central government-level business delegations travelling between China and Germany last year laid a sound groundwork from which to build and expand on now. Their established tradition and good reputation in the Chinese environmental technology market will remain an excellent vantage point for German engagements, last but not least since intensified avoidance strategies and their corresponding hi-tech solutions are gaining in on the demand for conventional End-Of-Pipe solutions.

Easing the Black Burden The 12th FYP sketches out the greatly needed resolute “greenprint” for clean and renewable energies. The new green direction contributes not only to dampening emission numbers today in order to fulfill the pledge of a CO2 consumption reduction of the 2005 numbers by 40-45% per GDP unit in the following decade and a 17% reduction by 2015, but also to achieving increased energy efficiency rates tomorrow. One of the major parameters of the current environmental situation in China is the nation’s unchanged dependence on the conventional energy source coal with a consumption of 70%. Its production and subsequent electricity conversion are weighed as the most energy-intensive manufacturing industries. The mining industry in general – from the extraction itself causing extensive land degradation to the emission-heavy logistics within the coal plants – is a steadfast crux to the enforcement and implementation of environmental laws. Even if the coming five years will still not see China’s coal consumption ebbing off on grounds of mined-out deposits – this country, too, does not have an unlimited fossil

fuel supply, and the next decades will be demanding our preparation for their substitution. The coal sector is subjected to a consolidation period with a planned cut to half of the currently over 10,000 affected companies, and the PRC is tending toward a state monopoly of less than a dozen enterprises to solely bolster up to two thirds of the nation’s total coal production. With a concurrent shift in the national power plant structure, China stipulates a primary non-fossil energy supply quota of 11.4% by 2015 and 15% with the conclusion of the successive 13th FYP. Alongside the quantitatively rather ‘insignificant’ renewable energies, hydro and most notably nuclear power will play dominant roles in the energy transformation process. The projected changes in energy production are the increase • of hydropower by 30% (from 7 to 9% of the total energy mix) • of nuclear energy by 100% (from 1 to 2% of the total energy mix), and • of wind, solar and bio energy by 150% (from 0,8 to 2% of the total energy mix)

Empowering Geography The switchover of the power plant structure from fossil to renewable is only one side of the green coin – as other countries including Germany, China needs an efficient supply chain from the production site to the consumer hubs in the industries and in the cities. The State Grid Cooperation of China (SGCC), established nearly ten years ago as a domestic and global flagship state-owned power enterprise, operates the bulk of the nation’s power distribution within its network of five regional subsidiaries. This new five-year cycle will generate a powerful upgrade of the state grid – placed high on the government’s priority list with a RMB 17bn investment. And there are even higher aims: a reach for China’s tangible sky with the construction of a “super grid” comprising an investment volume of over USD 500bn by the SGCC. But even if the 12th FYP encourages stronger than ever the decentralization of energy solutions in a country featuring vast potential for solar power in the desert regions to the north and northwest and wind power in the east and southeast, the country also features vast geographic dimensions challenging the logistics of supply and allocation. To prevent or even eliminate the occurrences of power grid overloads and safeguard

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the provision to outlying developing regions, the country w i l l p ro m o t e t h e establishment and inclusion of micro grids as well as smaller stand-alone energy generating systems on wind, Mr. Gregory Gilligan, Managing Director of APCO solar, or wind hybrid Worldwide Beijing power basis. The growing popularity of and growing political interest in renewable energy sources (RES) is generating a new awareness about such low-voltage micro grids as a sustainable solution for on-site power generation in China’s remote areas. “There is reason for both continued optimism and concern in the developments around industrial policy in China. A great focus is placed on what many view as an IP-challenged environment or domestic protectionist measures, but there should also be a view to new opportunity, particularly when considerable state-funded spending will go into spurring advancement in the commercialisation of science and technology. Increased cooperation is imperative to receiving access to state funding, and companies will need to carefully weigh the pros and cons of expertise and technology transfers if their core business offerings are involved. But for those who can develop new business complimentary to their existing competencies, a significant upside exists.”

Building Commitment The third great challenge for Chinas green future is the surging energy consumption. Roughly a third of the general energy consumed by China’s society is attributed to the building and construction sector; in the first three quarters of 2010 alone, the industry rose by roughly 24% compared to the same period in the previous year. At the same time, the energy efficiency of Chinese buildings still only assumes around 20%, 30% at most, of the European standards. Integral weak links to the energy balance of buildings are low-grade materials, insufficient external wall, door and window insulation, and the poor construction and control of heating, ventilation and air conditioning systems. Efficient technologies are sought after, opening another door to extensive investment potential in the fields of energy conservation and emissions reduction. German manufacturers and their suppliers are pooling into influential lobbies or working groups, and existing associations include the German Chamber platform econet or the Beijing-based ETICS Quality Alliance Group for external thermal insulation composite systems. In a mutual effort to improve energy efficiency in the building sector, they contribute to the design and development of standardised quality certifications according to the benchmarks set by the European and German construction industries. To expedite the reduction of carbon emissions in the building sector with special attention to new buildings, the ratification of the new FYP runs parallel to discussions in government circles on the introduction of a carbon tax by 2013 alongside the installation of a carbon trade system by 2015.

Hale and H

Examining the Well-Being of the Chines China, as many countries in the world, is facing some major challenges in regard to population growth, health care and agriculture. Infectious diseases, aging society and the huge pressure on the ecoenvironment from agriculture are just a few examples. Politicians, Economists and Scientists worldwide are incessantly searching for solutions. In recent years, life sciences and biotechnology have seen important developments in China due to the constant support from national and local governments. Both fields seem to have become a top priority for research and development. However, it needs a more detailed analysis on whether China will be able to successfully answer some of the most important questions of our future.

Seizing The Green Momentum China’s unrelenting economic growth coupled with the forthcoming politico-economic emphasis of the 12th Five-Year Plan implies a steady continuation of demand for the proven know-how of foreign solution providers in the areas of energy and environment. In the face of the existing policies and the strong history of cooperation and trust between China and Germany, there is no need for German companies to lower their sights on this innovation-friendly exchange. Overseas technology along with a more open invitation to seize available funding and subsidy programs also to foreign investors will be an essential driving force to ensure China’s aspiring development targets. Mr. Ingo Schulz is Head of the Department Environmental Technology & Services at the GIC German Industry & Commerce (Taicang) Co. Ltd. Beijing Branch (AHK Beijing), and in this capacity manages different projects in the fields of energy efficiency, renewable energy, waste management and raw materials. For more information, please contact Mr. Schulz at * [email protected]

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One example for the increased attention of Chinese authorities for public health and medicine is reflected by the three-year budget: from 2009 to 2011 it reaches RMB 850bn. Additionally in 2010-11, the World Health Organisation (WHO) is supporting the Chinese Ministry of Health with USD 5.88mn for 73 public health programmes in more than 20 provinces in mainland China. As part of the National 12th FiveYear Plan the executive meeting of the State Council recently passed the implementation plan of the "Major New Medicine Creation" science and technology programme. The financial support ranges from RMB 3mn to 25mn for each project, with the goals of promoting indigenous innovation of medicines. The strategically relevant emerging industries recently named by the Chinese government, which also play an important role in the 12th Five-Year Plan, also list the bio industry as the only one among seven industries that are related to life sciences. Bio industry includes bio-pharmaceuticals, bio-agriculture, and bio-manufacturing. It has to be seen how much is spent and how much is achieved in the coming years in these areas.

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Hearty?

se Life Sciences and Innovation System Biotechnology has already been identified as one of the frontier technologies in the National Medium and Long-term Science and Technology Development Plan (2006-2020). Five subfields were specifically prioritised: target identification technology; plant-animal species and drug molecular design technology; gene manipulation and protein engineering technology; stem-cell based human tissue engineering technology; new generation of industrial biotechnology.

Scientific Publications The research output of Chinese authors in terms of scientific publications has undergone and is still undergoing enormous growth rates. The numbers of publications in the Science Citation Index quadrupled in the period between 2001 and 2009. Life science publications grew above the Chinese average in the last decade. While organic chemistry and TCM have an activity level above the worldwide average if scientific publications are taken into account, areas like biotechnology and pharmaceuticals are slightly below, while medical equipment and especially medicine are far below the world average. Increases in the relative position can be detected in almost all areas, but the largest field of medicine shows a rather moderate change. The shares in worldwide publications in all life science fields still remain far below the Chinese average.

Looking at the impressive growth numbers and the efforts that are being made in life sciences, one of the most interesting questions is where China is standing on the global scale. Does China compete with the developed nations like in other fields, e.g. material sciences, and partly Information and Communication Technologies (ICT)? How innovative is China in the field of life sciences today? This can be analysed thoroughly by looking at different and internationally comparable indicators. Investments in R&D show the input side whereas scientific publications indicate the output of the science system. Patent applications refer to the application side and also indicate the output of the technology system. Moreover, trade data reflects the output of the market.

Patents

R&D Expenditures

The patent activities in biotechnology and pharmaceuticals are not able to meet international expectations, but those in organic chemistry almost

China's expenditure on R&D from government and enterprises has increased considerably over the last decade. The absolute amount in the year 2007 is more than five times the expenditure of 1998. Most of this is dedicated to natural sciences and engineering, which account for 97-98% of total spending. More than 80% of the expenditure targeted engineering activities and about another 9% (in 2000) was dedicated to natural sciences. Medical sciences account for less than 5%, but increased considerably between 1998 and 2000. These data show that investment in life sciences is still rather low, especially when compared with other developed countries. Despite these rather low inputs on the national scale, the National Science Foundation of China (NSFC) has more than tripled its number of life sciences projects and it still spends more than one third of its funding on projects in this area. A small number (about 2-3%) of NSFC projects deals with Traditional Chinese Medicine (TCM). This is an area of great hope for China in an international market perspective. However, these high hopes cannot yet be backed up by empirical data, even though China shows some strength in terms of publications and patent filings. It has to be stressed that other countries also conduct similar research and have been able to transfer their research into patents and products – although they call this homoeopathic or alternative medicine rather than TCM.

Again, the absolute numbers of Chinese patent applications have grown very rapidly and this growth has even accelerated recently. Genetics and TCM feature prominently in the patent applications of Chinese inventors to the State Intellectual Property Office (SIPO), while medical equipment and organic chemistry are not among their strengths. The Chinese profile is completely different on the international technology markets. Although some strength in genetics and in TCM are still visible, it becomes even more evident that no comparative advantages exist in medical equipment, even though this area has been among the most dynamic ones in recent years.

Companies spent 13.2% (more than RMB 11.7bn) on medical and pharmaceutical products research and another 6.1% on medical treatment instruments and meters. It is remarkable that about 32% of the expenditure of large and medium-sized companies on modernising technical equipment was spent on medical and pharmaceutical products as well as medical treatment instruments and meters. This still leaves some good opportunities for German medical and technical equipment manufacturers.

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Specialisation profile of SIPO patent applications, 2005-2007

materials and 5-6% in medical instruments are still far below what would be expected from a technology-oriented country of the size of China. Trade deficits exist in organic basic materials, in pharmaceuticals and in parts of medical equipment, which means that China imports more of these goods than it exports. If biotechnology products are considered, the picture changes and China achieves a trade surplus, albeit with a decreasing trend, as the national demand is growing even faster than the supply to international markets. Furthermore, China does not occupy an above-average position in the world markets in any of the life sciences or adjacent areas.

Note: TCM core covers medicinal preparations and selected foodstuffs with ingredients from animals or plants. TCM general covers medicinal preparations with organic ingredients in general. Source: EPA – PATSTAT; Fraunhofer ISI calculations.

reach the international average. These findings suggest two effects: On the one hand, it seems that activities by foreign invested companies in China are focused on certain areas (medical instruments and chemistry). This is why it is much harder for Chinese inventors to reach a relatively good position in the Chinese technology market. On the other hand, these results corroborate once again that the national activities are not yet internationally competitive in all areas. So far, there are no comparative advantages compared to the established industrialised and innovationoriented countries.

Trade China is solely responsible for more than 16% of the world-wide exports of processed goods. However, the finding from the analysis of scientific publications as well as patents, namely that the life sciences are not a Chinese strength, also holds for international trade. If all the life sciencesrelated goods are taken into account, China has the largest shares in sap, pectin, algae and the like but only accounts for 2.3% of the global trade in medicine and pharmaceuticals, a figure which is even decreasing over time. When looking at the high-tech areas only, the situation is

The export specialisation profile of China does not show any positive values in the life sciences, either in high-tech or in total life sciences exports. Figure 3 provides evidence for the strong position of the US in the life sciences and also for some comparative advantages for Germany in these fields.

Summary The life sciences – that is medicine, biology, biochemistry, biotechnology and several other adjacent areas like medical instruments or food and foodstuffs – do not currently feature among China’s strengths. Considerable comparative advantages for China can neither be detected concerning scientific publications nor in terms of patents. While the Chinese innovation system in general is characterised by enormous growth rates on the input side and some respectable successes on the output side, this is not yet true for the life sciences. The major challenge for China is the transfer of research, development, and patents to industry and markets. The challenges in the field of life sciences are even larger as there is not only an enormous gap to overcome. It is a field in which traditional, industrialised countries are actively engaged and are continuing to build on their currently very strong relative position. For China, closing this gap will be even harder to do. In the coming 12th Five-Year Plan, the bio industry will see investment as well as political support, but it remains to be seen how effective this support will change the current situation.

China's export-import specialisation profile (revealed comparative advantage (RCA)), 2006-2008

Source: UN – COMTRADE; Fraunhofer ISI calculations

even clearer: the world-wide production of pharmaceuticals does not take place in China and the Chinese world market shares have actually fallen since the mid 1990s. Even if it is taken into account that the Chinese exports are dominated by ICT-related goods and that these technologies are responsible for the overall huge share of China in world-wide trade, the market shares of 5.5% in biotechnology, 7.6% in organic basic

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Dr. Ulrike Tagscherer and Mr. Rainer Frietsch are both researchers at the Fraunhofer Institute for System and Innovation Research, Karlsruhe and the Institute of Policy and Management, of the Chinese Academy of Sciences, Beijing. This article is based on a report on behalf of the Federal Ministry of Education and Research, Germany, that was published as: Frietsch, R.; Meng, Y. (2010): Indicator-Based Reporting on the Chinese Innovation System 2010 - Life Sciences in China, Discussion Paper "Innovation Systems and Policy Analysis" Nr. 26, Karlsruhe: Fraunhofer ISI. It can be downloaded at: http://isi.fraunhofer.de/isi-en/p/publikationen/ diskpap_innosysteme_policyanalyse.php.

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Taking the “War for Tale Long gone are the days when an employer could sit back and wait for the candidates to line up outside his office. Nowadays, traditional job advertising must be supplemented by an online presence. After a slow start, Business Social Networking Sites (BSNS) are gaining traction with scores of professional communities developing online. More and more users are making connections and sharing information. The question now is, on which BSNS will you meet your future Chinese senior executives? Here are two communities you’ll want to network your way into. NG These interviews were edited and condensed.

Ushi.cn

Hengzhi.cc

In Numbers: There are 100,000+ users, 12,000+ CEOs, 4,500+ CTOs, 80,000+ professionals, 1,500+ groups, 2,000+ jobs posted; 98% of users have college degrees; 93% of users are China-based; 7% of users are from international locations. Noteworthy: Ushi.cn’s job channel caters to positions with a starting annual salary of RMB 200,000. Users can apply to the first ten jobs for free and then must buy Ushi Coins, the site’s virtual currency. The recently launched event platform has a mobile component that allows users to “check-in” at events and communicate with other participants. Ushi.cn is available in Chinese and English.

In Numbers: There are 200,000+ users, 1,000+ professionals groups, 2,000+ jobs posted, 3,000+ events posted and 4,000+ documents shared; 90% of users come from tier-one cities; 90% of users are between 25-45 years old; 97% of users have college degrees; 65% of users have overseas experience. Noteworthy: Hengzhi.cc allows you to share documents (PDF, PPT, etc.) and to post project proposals (start-ups, investment opportunities, etc.) and events. The network is available in Chinese only.

Interview with Mr. Dominic Penaloza, CEO Ushi.cn

What kind of community is Hengzhi.cc? Hengzhi.cc is a high-quality invitation-only and virally growing business network. We are the official business network in several leading university alumni groups and prominent professional groups, such as Guanghua Management School, China Entrepreneur and the China Western-Return Scholar.

What is Ushi.cn’s development focus? Ushi is a private and invitation-only network of professionals and entrepreneurs. It was founded by 100 Charter Members who are all successful business leaders in China, including XING founding member Daniel Wild. Ushi basically helps users accelerate their connections with its networking platform. Instead of going to one business dinner after the other to find the right contact, Ushi will help users get to dinner with the right person sooner. What is the difference between online networking in the West and in China? I think there are two main differences. The first is in agressivity – Chinese users are more agressive in making connections. They want to connect with everyone in every field, even if there’s no immediate purpose. The second difference is that Chinese users have a certain bias. They prefer to do business with people who are directly referred to them. That’s where Ushi’s extended network becomes very useful. What is your advice to users who want to make connections on Ushi.cn? I’d recommend they use the group section. There are over 1,400 groups in all fields and industries. Through these groups they can connect with industry people and with users they didn’t know they needed to connect with. What is your advice to companies who post job advertisements on Ushi.cn? One great advantage of advertising job openings on Ushi is that you can easily perform reference checks on applicants without relying on the references provided by the candidate. Reference checks are important in China, because it’s common for people to exagerate their work experiences on their resumes. Using Ushi, you can check if you have any mutual connections and get in touch with them to find out more about your applicant. If you don’t have mutual connections, you can search for users who worked in the same company in the same timeframe and get in touch with them.

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Interview with Mr. Tong Li, CEO Hengzhi.cc

What do Chinese users want from Hengzhi.cc? They want to maintain a professional network, and they want to use this professional network to accomplish something – be that to find new friends, new opportunities or new jobs. Number one, they establish and maintain a professional online presence. Number two, they exchange professional ideas, questions, business inquiries, partnerships and job postings. Number three, the site is also social, in the sense that people will share photos and travel experience with their friends. What is the difference between online networking in the West and in China? There are many user behaviour differences. For example, westerners tend to be very direct when they contact other users. They will say: “Here is what I have, here is who I am, here is what I want – can you help me or not?” Chinese users tend to be vague. They will say: “I want to get connected with you, and maybe something will happen.” You don’t really know what the purpose is at first, but let me tell you there will be a purpose. What is your advice to companies who post job advertisements on Hengzhi.cc? First, I recommend filling out as much information as you can when posting an advertisement. Jobs being posted online tend to be mid-level management positions or professional positions that require work experience. Candidates either already have a job or are very picky about what they are going to do next. Providing as much information as possible about the company and the position will help candidates understand and know more about the company and the position. Second, I recommend managing the job functionality that will go into the system. Hengzhi.cc users normally have very detailed profiles, keywords, and professional interests and the system can match job offers with potential candidates.

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ent” Online Is a BSNS just another out-of-date directory of names and addresses? If that’s how you treat it, then that’s what it is. But if you take initiative and reach out to other users, this may be your low-cost gateway to high-quality candidates. Develop a Social Media Strategy. Before jumping on the BSNS bandwagon, companies need to have a plan. Questions you should be asking include: What are my company’s needs? Who and what is going to be represented on the company’s profile page? Pick the Right BSNS. The internet is boundless, but don’t spread yourself thin. Invest your time wisely and concentrate on one or two BSNS. You should ask yourself: Who are we trying to reach and where are they congregating? Go find your candidates where they already are. Create an Attractive Profile. The profile is

gets the word out like a viral campaign.

Set privacy settings. Most BSNS allow you to control what people see on your profile and what they can post onto your profile. Don’t let your settings turn your page into a blank slate, but don’t let embarrassing posts through either. Time to network. Keep in mind: BSNS are not

about advertising and selling. They’re about engaging with other users. Forget the sales pitches, forget the canned PR speeches. Instead, start conversations with users.

Don’t be shy. Comment on other users’ content,

Consider this.

There are 457mn Chinese “netizens”. 235.05mn use Social Networking Sites (SNS). 66.2% of netizens use mobile phones to access the internet, and 36.6% mobile internet users log onto SNS. All these numbers keep growing. You want to reach local Chinese talent? You need to log on and go mobile. Figures according to the 27th Statistical Report on Internet Development in China published in January 2011 by the China Internet Network Information Centre (CNNIC).

afraid to ask for introductions. The more interesting people you know, the more interesting people you will meet.

Join groups. Good candidates are likely to be part of industry-related or professional groups. Go to the source and interact with members who may be the candidates you’ve been looking for – or might introduce you to who you’re looking for. Use advanced searches. Most BSNS allow

When creating your company profile, DO:

ask questions on your own wall, post interesting links on industry topics, and post relevant events. With so many distractions online, you need to give users something to follow. The more followers you have, the more reach your posts have.

Show personality. The goal is to create a

Find your dream employees. BSNS are

the reach of your search by announcing it to your network. A simple update can get you connected with professionals you might never have met otherwise.

a window into your company – it’s your platform to communicate information and to build relationships with users.

bond with visiting users. Take it easy on the corporate tone and include personal or unexpected information that makes your page more personable. Nowadays, employees want to find meaning in their jobs, so show them you’re more than a corporate machine.

Share photos and videos. Multimedia adds liveliness to your profile and gives a different perspective on your company. TIP: Make sure photos and videos can easily be shared by users. Nothing

low-cost gateways to high-quality candidates. They even put potential candidates who aren’t actively looking for a job onto your radar. Moreover, you can empower your employees to announce the opening through their own profiles. Here are some tips to get you started in your search:

Build connections. You never know where you’ll find your next star employee. Build relationships with people of all backgrounds and don’t be

you to customise your searches. Find the perfect employee by refining criteria in education, industry, interests, etc.

Update your status message. Maximise

Go mobile. Staying on top of your network doesn’t have to be time-consuming. Save time by checking network updates during downtime, like when you’re waiting for appointments or travelling. Your future employees are using mobile phones to browse the internet – that means you need to make sure you’re using mobile-friendly BSNS.

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April - May 2011

2011 April - May Design AD.indd 2

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2010.11.26 3:06:50 PM

BUSINESS FOCUS

NORTH CHINA

Arming To Catch Up

Xi’an Bets On Its Modern Force

Xi'an instantly conjures up the image of a proud ancient terracotta warrior in front of most peoples’ inner eye. But there must be more to the city than its historic grandeur: why else would world-renowned companies as Honeywell, Pratt & Whitney, BOSCH UAES (China's most successful joint-venture according to their own information), German Micron, Heidelberger Zement, Siemens Signaling Company Ltd., Micron, Infineon and many more settle down in Xi'an in this millennium? BOSCH Rexroth even relocated to Xi'an from its original production site in Shenzhen. Xi'an entices potential investors with arguments as cheap land and low labour costs, but this can’t possibly be enough to convince a global player to invest here. Of course, Xi'an has so much more to offer, and is without a doubt a place to bear in mind. Due to its geographic location, Xi'an is not a suitable investment place for every industry. Enterprises wanting to export their products might find similar places closer to the coast and the sea ports more attractive. Hence, Xi'an has been focusing on software development, R&D, and in recent years also more strongly on the solar energy industry. Three national level developmental zones provide the right environment and infrastructure for settling down. Furthermore, there are rich resources of natural oil and gas about 500km to the north of Xi'an. More than five years ago, Applied Materials began the construction of a state-of-the-art research and development facility in Xi'an – a strategic step that attracted numerous semiconductor companies. Now, over 300

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employees work at the facility in the areas of semiconductor equipment, solar energy, training, software and procurement operations. Xi'an is one of four aviation centres in China. Yanliang to the northwest houses China's only national level aviation zone, the CIAB, with projects as the first China-made regional aircraft Modem Ark (MA) 600. Yanliang is poised to play a key role in the development of the domestic jumbo aircraft project. These industries call for qualified employees, but unlike the east coast, where enterprises are poaching skilled engineers, there is no bottleneck here (yet). The city will be reaching 10mn inhabitants soon, which will have direct consequences for the status of the city within China and probably impact the financial support by the government, too. More than 100 national and private universities and colleges are releasing around 30,000 graduates onto the labour market each year – of course still without relevant working experience, but several cooperation projects between local enterprises and universities already exist to better prepare the students for their future jobs. The Xi'an International Airport with the German Fraport AG as a 24,5% shareholder is expanding. The airport aims at a total capacity of about 31mn passengers per year once the new Terminal 3 is ready by March 2012, and there are plans to establish non-stop flights to destinations in Europe. At a par with any other city in China, the Xi’an traffic is one big jam, and local driving has its very own typical traits that even differ from the driving styles in other parts of the country. Maybe this is rooted in the long history of the

city and the fact that once upon a time, the entire country’s eyes were on Xi'an as the residence of over 200 emperors. The locals cherish their traditions: “It has been this way since the early beginnings, so why should anything be changed now? “ Foreign idea(l)s and standards are only slowly adapted in business and in life. The same applies to the interpretation of laws by the government, though one rule applies for sure: the bigger the company, the more instant the solutions. Infineon for example was able to establish its company within a few days. To cater to the new demographic of buying power and the growing demand for high quality foreign products especially from Germany, the city developed the entirely new district Quqiang featuring hotels, conference centers and entertainment facilities in addition to the normal city-wide offers. Xi'an is a city of antagonism: old and set traditions meet metropolitan lifestyle. Modern skyscrapers stand next to small villages similar to Beijing’s hutongs. But Xi'an is, in contrast to Shanghai or Beijing, still original and calm – neither as anonymous and hectic as Shanghai nor as vast as Beijing. The local cuisine makes Xi’an interesting especially to Germans: potatoes are widely grown in the north of the province and are consequentially a staple ingredient to local dishes. Secondly, no other place in China produces so many different kinds of bread. Once a month, a German-speaking Stammtisch invites to exchange matters of daily life and business while enjoying a beer together. Another more international platform is the Xi'an International Business Forum that offers periodic events and activities. To sum it all up: for German investors in the right industries, Xi'an is a very attractive site offering advantages and opportunities. The (Terracotta) Warriors are just waking up. It is up to you to decide whether to participate or not – whether to arrive in Xi'an to a bottle of local ‘Hans’ beer and immediately think: “Home, sweet home!” Jehnichen Consulting Ltd. is a professional internationally oriented business consulting company based in Xi’an. Comprehensive experience and a strong network of established business experts have been an integral part of our operations since 2006. Jehnichen offers a wide spectrum of one-stop services also in cooperation with external specialists. For more information, please visit: www.welcome2china.de

Empty Chair? Find the right fit.

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BUSINESS FOCUS

EAST CHINA

Located in Jiangsu province at the estuary of the river, Nantong is the first window on the Yangtze River. A busy river port, it borders Yancheng to the north, Taizhou to the west, Suzhou and Shanghai to the south and the East China Sea to the east. As a prefecture-level city, Nantong boasts a population of almost eight million over an area of 8,001km2. In recent years, Nantong has received much domestic and foreign investment. The city’s GDP grew by 14% in 2009, reaching RMB 287.2bn. The area is already home to more than 50 of the world’s top 500 companies, but officials hope to attract more companies under the 12th Five-Year Plan. Five-Year Plan to Stimulate Growth The Nantong Economic and Technological Development Zone is set to undergo major development over the next five years to increase its economic and innovation strengths and international competitiveness. The local government is interested to develop modern service industries, such as logistics, scientific consultation, information and finances. It will focus on building optical-electronics, biomedical, innovation, and service industry parks. Meanwhile, traditional industries such as textiles, clothing and fine chemicals will be upgraded and veered towards high-end development. Part of Nantong’s ambitious makeover plan is to promote scientific innovation and research. A special fund to support university-business partnerships will be set up to encourage inventors. Furthermore, the government expects to spend RMB 200mn to develop a technological innovation system over the next three years. Record-Breaking Shortcut Since 2008, the completion of the Sutong Yangtze River Bridge has reduced the

commute between Shanghai and Nantong from a four hour ferry ride to a one hour drive. This bridge increased the jurisdiction’s role in the Yangtze River Delta economic zone and helped bring development to the poorer northern Jiangsu regions. Moreover, the bridge is a 21st century engineering feat. Standing at 1088m, it is the world’s longest cable-stayed bridge. The bridge’s cables are also made of a new kind of zinc-galvanisedsteel strand, reducing their diametre and cutting wind drag. And that’s not all. Sutong also has the deepest foundation of any cablestayed bridge, going as deep as 120m, and the highest concrete and steel bridge towers standing at 300m. Nantong Port and Offshore Rigs As one of China’s category-one national ports opened to foreign trade, Nantong Port is a major river port in the Yangtze Delta and an important hub port of the country. It spans over a shoreline of 4.2km and holds a land mass of 1.5km2 with five major terminals. They together operate 24 berths, including two berths for vessels of 150,000dwt. The main cargoes handled are iron ore, minerals, cement, steel, coal, sulphur, fertilizers, grains and edible oil. The

port houses the second largest distribution centre for bulk cargo down-stream. It is also the largest sulphur feeder port in the nation and the largest hub port for iron ore transshipment along the Yangtze River. Nantong Port provides easy access to the Yangtze Region by road and waterway which is an ideal hub port for cargo trans-shipment. In 2009, Nantong Port had reached over 100mn tons annual throughput for the fourth consecutive year. Annual cargo throughput of Nantong Port Group recorded 55mn tons in 2009, representing 2% year-on-year growth. The China National Offshore Oil Corporation (CNOOC), the country’s leading offshore oil and gas producer, has also promised sustained demand for rigs produced in Nantong with its plans to invest up to RMB 200bn on oil and gas exploration in the South China Sea. In September 2010, the Corporation also announced it had expanded the handling capacity of its product oil storage in Nantong to one milion metric tons per year. NG

Nantong: Yangtze’s First Window City to Revamp Image Under the 12th Five-Year Plan 42

April - May 2011

MEET THE MEMBER Tell us a little about your company and activities in China?

Founded in Germany in 1931, the FUCHS Group has grown to be the largest independent manufacturer of specialty lubricants in the world. Recognised internationally for its innovative lubricants and industry related specialty products, FUCHS has a global reach with manufacturing facilities in over 40 countries. FUCHS provides high quality lubricants to a wide range of industries in China since its first entry in 1988. The superior customer service is supported by two manufacturing facilities in Shanghai and Yingkou and ten warehouses covering all major economic regions in China. From underground mines to makers of complex metal components including automotive, appliance and aerospace manufacturers, FUCHS CHINA has products that can always meet the specialised needs of our customers.

What has been your strategy in terms of production and R&D?

Quality is the life of FUCHS. We have been adhering to the high-tech line, focusing on the development of new, specialised and customerspecific lubricants with leading technology. Moreover, FUCHS CHINA established a new Asia-Pacific R&D centre in Shanghai. With the increased investment and R&D ability improvement, there are more than 70 projects launched annually to localise the technological superiority of FUCHS Group in order to provide clients with the most fitting lubricants solutions.

What kind of benefits can companies using your services in China expect?

Most clients of FUCHS enjoy, next to high performance products, adequate and systematic service that comes in form of technical support. One of our defined services is CPM - Chemical Process Management.

www.china.ahk.de

Qingping Zhu

Company: GERMAN FUCHS GROUPFUCHS CHINA Job Title/Position: Chief Executive Officer Year of Foundation: 23 HQ (location): Mannheim, Germany Main Business: Lubricants Number of Employees: 301 (China) Sales/Revenue: RMB 1.261bn (China) (FY 2010) It shows exactly what our advantages are by providing services for the supply of industrial fluids or other chemicals in a specifically designed system to meet the needs of each individual customer. FUCHS is one of the biggest service providers for comprehensive and professional service packages which include management of the total process, cutting production cost, optimising resource allocation with focus on core business.

What are your aims and hopes for the future?

FUCHS Group committed to be the number one independent lubricant company in the world, and today we are already the market leader for specialty lubricants in China. Our goal for the future is to provide premium lubricants and high quality services in the aftermarket. We will focus on research and development, and inherit the cutting edge technology from the German headquarter to pursue our sustainable development.

2011 April - May

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BUSINESS FOCUS

SOUTH CHINA

30 Year Time Lapse: Shenzhen’s Economic Transformation Since its announcement as China’s first Special Economic Zone (SEZ) in 1980, Shenzhen has undergone various phases of economic development in extremely fast motion. Within 30 years, the metropolis miraculously achieved what western cities usually took a couple of hundred years. Besides its development from a small fishing village to a 10mn megacity, the pace of economic transformation is truly breathtaking. The economic reforms implemented by the central government did not only allow foreign investment but actively attracted it through providing preferential policies. Shenzhen’s proximity to Hong Kong, tax exemptions and reductions, low rental costs and the abundance of cheap labour was the perfect combination. After just a couple of years, the SEZ had become a major manufacturing hub, first through investments from Hong Kong companies. Later, more and more companies from the rest of the world chose Shenzhen as a location for manufacturing. Consequently, it expanded its position as an export oriented economy. Today, Shenzhen is the biggest exporting hub in China with exports worth USD 204bn in 2010, ranking first for already eight consecutive years. However, in recent years the economic structure has shifted from low-end productions, like manufacturing of clothes or toys, to more sophisticated products. A shift in government policies, stricter environmental standards and rising costs are the main reasons for these developments. ZTE did the first move in 1985, being the pioneer and one of the first in hightech manufacturer in Shenzhen. Today, the company is the biggest supplier in telecommunication equipment in China. Many more followed shortly after. Huawei, for example another telecommunication equipment supplier was founded in 1988, and recently, the software giant Tencent and the major car manufacturer BYD have been founded in Shenzhen. The numerous homegrown technology giants have evolved into global companies strongly underlining Shenzhen’s entrepreneurial and technological spirit. With more and more hightech companies settling down in Shenzhen, the export of technology related products reached USD 108.73bn or 53% of exports in 2009. The composition of the city’s Gross Domestic Product (GDP) is another turning point in the economic transformation of Shenzhen. In the early years, it has been dominated by the secondary sector (industry and construction),

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with the tertiary sector (services) only contributing a very small amount. Today, according to official sources in terms of GDP growth, the tertiary sector has surpassed the secondary sector in 2009 with percentages of 53.2% and 46.7% respectively. Moreover the development of wages further influences this development. Shenzhen’s minimum wages gradually went up over the years, reaching one of the highest levels in all of China, and consequently making low cost production more and more unattractive. Hence, labour intensive businesses are shifting their manufacturing grounds to other regions of China predominantly to the western provinces or less developed areas in South China as well as other regions of Southeast Asia. This is not only because of relatively cheap labour costs but also due to more attractive property prices. The current focus of the government and the plans for the future development is on seven strategic emerging industries, namely biotechnology, alternative energy, new generation information technology, high-end equipment manufacturing, advanced materials, energy-saving, environment protection and alternative fuel cars. The efforts in the emerging industries have already been bearing fruits with BYD and Daimler signing a cooperation contract to co-develop an electric energy car in Shenzhen. Next to the strategic emerging industries the main focus of the future development lies in the service sector. Herein, the Qianhai area is projected to be a role model for southern China. The Qianhai area is an area of 15km2 and is situated in the western coast of Shenzhen. It is scheduled to be developed into a modern service industry hub including finance, modern logistics, information services and science and technology. The area is scheduled to be finished in 2020 with over USD 5.9bn to be invested in Qianhai by the government. Companies investing into the Qianhai area will benefit from preferential conditions such as subsidies and tax reductions. As an example, technologically advanced companies will enjoy an income tax of 15% instead of 25%. Resulting from those conditions and the geographical proximity and close cooperation, 20 Hong Kong firms already signed agreements to invest in the area. The cooperation between Hong Kong and Shenzhen is a perfect example of the implementation of the “one country, two systems” scheme. In recent years facilitations in many areas, such as logistics and infrastructure, led to projects and bilateral investments. One

Shenzhen today is a modern metropolis and high-tech export hub.

From a small fishing village to a 10mn mega-city: Shenzhen’s urban development at breathtaking speed.

The connection to Hong Kong as a major drive in business: the Shenzhen Bay Bridge was opened in 2007

of the major measures to facilitate trade and investment is the “Closer Economic Partnership Arrangement” signed in June 2003, which for example provides beneficial conditions to financial service companies to conduct businesses on the mainland such as cross-border RMB trade settlements. The possibilities in the service sector in Shenzhen are vast and will be trend-setting in China - like many times before. Compared to the economic strength of the city, German companies are still relatively underrepresented. This situation will hopefully change for the best in the near future with more German companies settling down in one of the most important economic metropolises of China. Shenzhen is no longer a place for labour intensive, low cost production as it was designed to be 30 years ago. It has become a technologically advanced and modern city with breathtaking growth potentials. CHL

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