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tv   Close up - Hungry Dragon - Chinas Greed for German Companies  Deutsche Welle  January 23, 2018 6:15am-6:46am CET

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some people find it amusing the hordes of chinese out conquering germany with their cameras. but some of these visitors have their eye on very specific things technology and machines made in germany and they're not here for the perfect souvenir snapshot china has come to shop and it's buying up dozens of german companies. to be my source of our acquisitions are associated with strategic interests interests that china wants to shake its image as a producer of cheap goods and become a leader in global markets in just one year it invested more than ten billion euros in germany. to invest in germany it's a win win situation as a. win win what about job security. is why the initial reaction is shock. some experts fear for the domestic economy
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considers and wonder a survey that planners discipline foreign products with chinese words. of zoom wants to know how dangerous it is china's shopping spree for germany. i think but i think that will be at the back of the people you tongue is a chinese millionaire he's here in karlsruhe on business. a leading global manufacturer of packing in process technology is looking for a new investor several parties from both germany and abroad have already come to look at the production facilities today it's you tongue who's offered the company one hundred fifty million euros and sweetened the deal by ensuring that in the
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future would be able to sell its machines in asia without difficulties. for the german management this all sounds promising but the company's employees are skeptical because tang's company talking manufactures similar machines in china the new potential chinese investment has employees concerned. shockey haven't the first reaction is. china's far away and when tante there is difference they have to her is about working out as so it sort of takes that moment as a large part of the workforce sees it pragmatically the baby chef. assesses ahead of time we've become sellers if it's on the take off a call for this time however the biggest fear is that with this sale the entire production will be relocated to china. there was another development. wouldn't be
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so great for us of course if production removed elsewhere. but i can go us maybe we can also learn something from a china most. investor tongue ensures them he's not out to destroy. he wants to team up with the manufacturer in karlsruhe to overtake competitors such as bosh to the. teams china is a huge market and germany is highly developed scientifically and technologically us working together chinese and german companies could conquer the global markets. so we have a three year plan we want to increase from a close market share in china this. will not cause the change to korti so right now the annual turnover there is only five to six million euro.
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chinese corporation and that would mean in the future major decisions would be made by chinese investors a good reason for the german management to weigh up the situation carefully. jobs a lot at stake in the negotiations between trucking and we'll come back later to find out what kind of agreement was reached. just one of many companies chinese investors have shown interest in. twenty sixteen. companies in
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germany chinese. over ten billion changed hands for companies. and. it is one of several. agencies. in business with china. the financial transactions. open markets. and sometimes even. twenty seventeen was a record year for chinese amodeo activities abroad and also in europe and germany. we're seeing a solid upward trend most of the acquisitions we handle pursue strategic interests
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. in other words a chinese entrepreneur will say i have an objective i want to expand abroad or i need to upgrade my technology. old and operate for my intuition again back home why are china's investors so keen on germany in particular one yeah boy put. on products and german technology a highly regarded that. vietnam is in automobile industry mechanical engineering and machinery truck from a few or have an excellent reputation in china the good news in the horse for. one reason germany has become a focus of interest is because of a government scheme known as made in china twenty twenty five the country wants to put its days as a producer of cheap goods behind it to become a technological leader and industrial superpower. at the hanover messa the
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world's largest industrial trade fair it's clear where china's interests align robotics semiconductor technology and automation. up until now chinese companies often simply copy products no one does it better no other country churns out more reproductions or counterfeit goods. the cost to germany alone is over seven point three billion euro. a company based in the bavarian city of playing and back has felt the sting the cusp esche alliances in pressure temperature and level measurement technology their instruments are used primarily. in heating and industrial facilities and must operate with absolute precision. make up products have been widely copied by chinese companies for eleven years it's been bullish dimwit's job
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to track down the fakes. so what's original and what's a fake you know you know the difference between an original and a fake is not always easy to spot for the retail customer often on fakes the printed parts are a bit blurred the cascade is even worse my care at the front is being cut by hand perhaps with a pair of nail scissors and there's no way this seal is tight enough the main thing is that it won't measure the pressure properly subjected to vibration the instrument would likely fail fun if it's time to made in germany but wasn't and it does not adhere to the quality standards of made in germany that's not fair. it's a tough battle for de mood and his boss so why is china in particular causing so many problems. you know it's a lot of fuss over the past years china has grown from a developing country into an industrialized one and
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a lot of small companies want to gain a foothold in the market. and then they often take a very pragmatic approach to put a diplomatic way it's. the economic damage is significant but for this medium sized company there's even more at stake. interest imagine our instruments are often used for critical applications. involving hard pressure for example. under for devices and up to specs it could result in serious damage or even personal injury through a form of the wall and if there were to involve a device during the vico name. doesn't matter how many ways we can prove that it's not one of our products the damage to our game. has been. invented in germany and reproduced cheaply in china under the original name that shouldn't be possible in germany intellectual property is protected by the german patent office in munich
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but patents in germany aren't worth much in china they have to be registered there and the requirements are different in germany inventions must truly be new in china it's often enough for the goods to simply be new to the market that leaves room. is that also part of the chinese strategy attorney usually involved counterfeiters on behalf of german companies which takes a lot of time and energy. and china you have to submit a lot of paperwork before a judge will even. need to develop a very broad strategy. in any other kind of. property rights in china be responsible for your kind. of the property rights will ultimately help you win that case. if a case does go to court it's still not easy for his client chinese companies
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generally when. the impression the state is interested in supporting its own patents. china launched a major initiative a few years ago they wanted to see millions of peyton's filed within a few unfortunately the innovations. on the standards here differ from those in europe but chinese companies sometimes with tax advantages. and then push them through. the chinese courts go along with. us want to know if it's china first in case law. it's more like you realize there's a tendency to mistrust foreigners they always have to present their. anything to the chinese john for the triple stamina certified translation it's a lot easier for the chinese a lot of these hurdles are here and formality as much of course have been set up by the state. are german businesses systematically disadvantaged and working to find
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out and make our way to china the country is germany's most important business partner outside europe with a trade value of about one hundred seventy billion euro more than two thousand six hundred german companies are based in the greater shanghai area alone but if you hope to succeed you have to abide by chinese rules and they are strict foreigners are not allowed to invest in every branch for some you need to enter into a joint venture with chinese partners and there are limits to how much capital can flow in and out of the country. a third of german entrepreneurs complain about a lack of transparency bureaucratic hurdles and bias and legal interpretations. of the german chamber of commerce abroad is critical of the systematic bias to.
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germany as a country that is not open to foreign investment but we are still seeing limited market access in china before in the case of public tenders for example companies keep telling us that there is a lack of transparency and that it's not always easy to understand why they've been shut out of the process of ns few deaths in my time is not quite seen couldn't it tends to be a little complicated terry in china does as i list here in kenya any guns i am from . many companies would agree but few dare to talk openly about the problems for fear of reprisals by the chinese authorities but we did find one entrepreneur who was willing to talk to us on camera thank you heiko ventures company develop scanners thomas. perhaps and measuring instruments for industrial use eleven years ago she came to china and taught chinese engineers german know how then one of her employees started offering the same services outside company hours with the help of
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colleagues and equipment from their german employer. and them with the us because they don't like to say respect for property as we do that i didn't have the same sense of justice so i more or less have to expect that one in one hundred employees will say well i'll take that and do my own thing with it when i listed government officials that what security measures have you put in place to ensure that the no house stays within a company in india from apple i would fall into it was very important not to reveal every facet of our technical know how to ensure that didn't happen right for a start we continue to manufacture the only sensitive parts in germany and then have them sent here that's been stalled in the machine and we're headed in front of the russian. vince will dismiss the employee. but that's not the only bad experience she's had she also set up a joint venture with the chinese partner who made a profit while she lost half a million euros this mission from. the script so i mocked as
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a model gates in which europeans operate and it works quite well. as a market that is reserved for domestic manufacturers it says not just the your opponent market so we thought it would be a good idea to enter into a joint venture with a partner from china joint venture partner with kenya is that all just now us to conquer this other market as well. one so that didn't work out so well it was very very difficult wills colliding you might say it's the subject of the past so it's difficult for germans to succeed in china ventile experience is that every day applications and paperwork are required for everything nothing moves forward without a stamp and to. get that pencil had to present her case to three different authorities . position because that is worth more than my signature.
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time and again she feels the long arm of the state she wants to show us how it is we accompany her to one of the authorities a combination of a customs and labor inspector. she needs its approval to bring components from her own factory into the country. to. the head of the authority also wants to show german television what they have achieved here he's proud that in just ten years more than twelve hundred companies have settled in the region of his responsibility they are all in sectors that the chinese government sees as crucial to the country's future engineering semiconductor technology and automation. we asked the head of the agency what the broader vision is the. government has created many opportunities to transform and improve china's economy
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to develop it we are trying to move away from the traditional way of doing business with towards a new economy driven by innovation and high tech. very strange offers many opportunities for foreign entrepreneurs to especially from germany this is what you could. thank you very much for making makes it clear and nothing in china happens by chance. master plan for economic development is always present. made in china twenty twenty five envisions a quantum shift away from cheap producer to an industrial super power that will rival north america and europe. allocated. for investment. companies can't make the. own they have to buy.
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the company was on the brink of bankruptcy. and then. suddenly. an investor from china appeared on the scene and took over the company the money from china kept the company afloat. in german hands. to his german.
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in the chinese province of henan he made a name for himself as an automotive supplier he had nothing to do with cranes. we ask if they prevention or regional strategy was behind his investment. tower cranes serves a prime market. we want to be our development centers. its products are intended for the european market and we want to manufacture all the other larger products in china. we'd like to receive support from the chinese government and the provincial government. to develop production in china and make the brand known their financial build a church that would be in keeping with the government's development strategy. for.
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the soul of this investment was made with support from the state so that. he doesn't reveal the exact amount but without that money would have gone bust but in another respect it cost the company dearly because the way germany builds cranes is now also known in china. technology transfers and state subsidized shopping sprees what does this mean for germany as a business location experts. spent a long time looking at china's master plan and working out the strategy behind it. has analyzed chinese company takeovers including starter motor and generator subsidiary the chinese investors are actually made up of a complex network with locations in germany luxembourg and the cayman islands and
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in the end everything comes together in a special holding company. if you look at the chinese business register this holding company is owned entirely by hand. which is a very clear indication of the provincial plan for the automotive industry. enterprises have. another example n x p semiconductors in hamburg the buyer appeared to be a private investor but a look into numerous shell companies reveals a state fun directly subordinate to the council of state so not a private investor after all. trying to give the impression that this is a private plan when the government's actually behind it if you have nothing to hide no reason not to say that the government is involved.
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strategy. thinks it has to do with germany as a business location. is germany being sold off little by little as gifts in a part of the zyklon given by there are indeed risks that we have to observe in this travel an increasing proportion of investment is driven by state participants to a. basic aim is to supplant foreign products with chinese ones as it is. to prevent this takeovers would have to be blocked until recently the german government could only do that when it came to armaments and military technology but since july twenty seven teens the government has been able to veto deals if critical infrastructure is affected the e.u. is now considering expanding the rules to the whole of europe the numerous company takeovers the bad experiences with patents the hidden hand of the state and the made in china twenty twenty five. all of this has fueled mistrust we want to
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confront china's highest ranking representative in germany with our research. given the pace of china's master plan can ambassador she understand why businesses and politicians are wary. in the past the motto was growth growth and more growth now the motto was more quality and efficiency instead of quantity. and far we're only at the start of our investment in germany it's a win win situation. in the in by taking over companies we've created more jobs in these companies now have more access to the chinese market. so people are afraid of chinese companies but in essence it means they're afraid of themselves afraid of competition. because that china is developing. people are intimidated by the
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pace good a. job and. taught seems to fend off it at this stage is still behind it and subsidizing it with cheap loans how can something like this happen. if i don't understand this concern with state involvement. the german government also supports german companies overall. and what does the ambassador make of the discussions in germany and at the european level that new regulations will make the markets less open to china. if not. china is opening up far and wide and germany should also remain open. when problems arise we are prepared to deal with them by discussing them with the true restrictive measures and. secondly all such efforts are outdated. we have coming around liberal trade open markets. germany restricts matters it's sending out the
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wrong signal. in the bit china as advocate of free world trade and germany as an obstacle the german ministry of economic affairs rejects this notion. he does of all i do have to say china is an important trading partner china has to achieve a new level of value creation that is true it is absolutely crucial for growth and employment ten china and nothing can be said against it the question is what means and what conditions of a using to do that that is precisely where the principles of a market economy should apply not so to speak the principles of a state economy that distributes state subsidies. which at the moment china is fighting with unfair means. if i were to subsidize things in this way
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competition will no longer be fast and that will distort competition in the medium term too we cannot have any interest in that. the issue is essentially to prevent germany from being sold off to not just see the piles of chinese money but also to protect german. back in. chinese hands the firm was sold for one hundred fifty million euros with the majority of shares tongue the highest bidder location and jobs are supposedly secure even though the company didn't get that in writing but the german management is still satisfied. your. thought there are to do it. strategically. both sides. continue in a positive way if. the new boss promises a golden future. in his first address to the workforce he speaks of free market
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access to china generous investment new locations in europe and commitment to preserve. although we don't all know each other well it's a big day for me today because we all share a name now. the company is now a chinese worker and as we've seen the fight against counterfeiting is hard to win accessing the chinese market is still difficult for german companies there's no sign of a playing field and at the same time chinese investors are closing in on germany individual takeovers or investments don't seem to be a problem but they are increasing in number and the pace. and masterplan. china is on its way to becoming an industrial superpower.
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