Life of GuangZhou - Events of "Sustainable Urbanization" and "German Promenade" to Be Showcased in GZ

The German Chamber of Commerce in China (GIC) just released a report called German Business Expansion in China (2008-2010). Ms Alexandra Voss, Executive Director of the GIC in Guangzhou shared with us her insights and information about the German operations in Guangdong province during our exclusive interview this week as below:

What are the main business sectors of Germans in the province? How do their businesses perform generally?

Alexandra Voss, Executive Director of the GIC in Guangzhou. (GIC)

We have currently around 450 German companies in Guangdong. Around half are engaged in production, the other half are service providers or representative offices. Focal areas of interest include: machinery construction, pharmaceutical industry, service sector, electronics, textiles and shoe industries.

Overall, their business performs very well, and the vast majority plan to expand.

What are the economic appeals of Guangdong and Guangzhou to Germans?

The most important include the large size of the local sales market, the favourable geographic location which also includes the possibility to set up a regional platform, the production for export business, and the still comparatively low production costs in Guangdong.

What are the challenges the German operations in Guangdong have in recent years? How do they do to cope with the cost rise?

The key challenges are increasing level of production costs and the difficulties of finding (and retaining) qualified staff.

But German companies suffer less than their competitors from Taiwan or Korea mainly because the share of labour costs in German companies is in comparison significantly lower. In many German companies they account for merely 15 to 20 percent of the production costs.

What do you think of the future development of Guangdong and Guangzhou in business aspect?

There are huge opportunities in Guangdong for local and foreign companies. German business does not yet fully make use of the existing chances. Take for example our exports. Less than 15% of Germany's exports to China are going to Guangdong. And the share of German investment among total FDI in Guangdong is comparatively low.

There are several interesting sectors and fields with excellent potential for further expansion of our business relations such as high-quality consumer goods, products of the automotive industry, petrochemicals, electronics industry, information technology, environmental protection technology, logistics, tourism, trade fair industry and others.

What will the German Chamber of Commerce in China and in Guangzhou do to promote the German operations?

In Guangzhou a key highlight 2008 will be the event series called "Germany and China – Moving Ahead Together" in October. It is the biggest event ever hosted by Germany in China and stands under the joint patronage of German and Chinese Presidents.

It runs for three years from 2007 to 2010 in a total of six Chinese cities. Guangzhou will be the third host after Nanjing and Chongqing. Under the overall heading "Sustainable Urbanization", a variety of events, conferences, workshops and exhibitions in the range of culture, economics, city vision, science and education will be held.

A "German Promenade" with innovative bamboo pavilions and a pop-festival will be staged from 7 to 15 November 2008 in the southern square of Tianhe-Stadium.

Besides we have regular roundtable on HR issues and the famous Oktoberfest.

China is undergoing countrywide economic transformation now, in need for energy development and environmental improvement. Will German companies further focus on these sectors of technologies transfers?

China’s rapid urbanization is underway. Furthermore Germany has plenty of know-how and experience as well as technologies to be shared with China in urban planning, energy efficiency, renewable energy and waste management.

More and more German companies are now realizing these demands and opportunities and will further focus on these sectors of technology transfers. German official institutions and NGOs foster dialogue with the Chinese government to support China in handling energy and environmental challenges.

(By Ronald Li)