A Good Beginning in the Year of the Dragon Chinese Premier and German Chancellor Discuss Bilateral Cooperation with Entrepreneurs

In the afternoon of February 3, 2012, Chinese Premier Wen Jiabao and visiting German Chancellor Angela Merkel held talks with Chinese and German entrepreneurs in Guangzhou. Senior executives of nearly 40 companies, including Siemens and Volkswagen of Germany, Eurocopter and China Development Bank (CDB), Lenovo, China Southern Air (China Southern) and Sany Heavy Industry attended the event. Around a hundred Chinese and foreign correspondents covered the entire event.

In his opening remarks, Wen recalled his visit to Germany at the beginning of 2009. "At a time when the winter of the financial crisis was arriving, Chancellor Merkel and I talked about how to deal with the crisis in front of her office window. I told her that China and Germany have the confidence to handle the crisis because our two countries have relatively strong real economy, especially developed manufacturing industry. Over the past three years, we have overcome the difficulties and also strengthened the bilateral cooperation. It now appears that the bilateral trade volume will sure exceed US$200 billion in advance. We welcome more investment in China from Germany. Chinese enterprises have also started 'going abroad' and invested US$1.92 billion in Germany. This volume is still relatively small, but the Chinese enterprises are growing gradually and the Chinese government encourages them to make more investment in Germany," he said.

Merkel said that the bilateral cooperation helped both countries overcome the crisis. Such cooperation is win-win in nature. German companies expect very much to invest in other countries and Germany welcomes investment from Chinese enterprises as well.

The entrepreneurs also made remarks and exchanged opinions with the two heads of government.

Siemens which is headquartered in Munich, Germany has been in the Chinese market for over a century. China is Siemens' third largest market in the world after Germany and the US. Peter Loescher, Chairman of Siemens and Chairman of the Asia-Pacific Committee of German Business said that China and Germany are partners in the high technology sector. Such partnership serves both sides. Siemens especially hopes to enhance the innovation capacity jointly with the small and medium-sized enterprises (SMEs) of China, conserve resources through the development of high technology and solve the problem of sustainable development of cities. Both sides should not only look for opportunities in the Chinese market but also work together to find more opportunities in the global market.

Wen noted that China-Germany cooperation should open up new areas in addition to the traditional sectors, including high-end manufacturing, high-tech and energy conservation. The most important part of the bilateral business cooperation is the cooperation between SMEs.

CDB Chairman Chen Yuan said that CDB supports businesses of both countries to cooperate in the fields of shipping, new energy, telecommunications, finance and SMEs through establishing the €5 billion China-Germany special shipping fund and the €2 billion special loans for the cooperation between SMEs of China and Germany. CDB is making pioneering efforts to develop the financial cooperation in response to the characteristics of both sides. It intends to set up branches in Germany and hopes to get approval from the German government. Merkel said she would study this proposal.

Kurt Bock, Chairman of the world's largest chemical company BASF, mentioned that German companies doing business in China should contribute to improving the efficiency of energy use and chemical companies should fulfill their social responsibility. Wen believes these two points of view are very important. He hopes Germany could transfer advanced energy-saving technologies to China. China will protect intellectual property rights by all means in accordance with laws and international practices. BASF has many chemical companies in China and most of them are located along the rivers. Local people are very concerned about the environmental safety. He hopes the bilateral cooperation gives top priority to safety and makes the local people feel safe.

Chairman of Lenovo Yang Yuanqing introduced the deal of Medion. He stressed that in this M&A Lenovo did not take any single job away from Germany but greatly increased the number of German employees. The total number of employees in Germany has exceeded 1,100 and Medion has extended market beyond Germany to the whole of Europe. Now Lenovo is both a Chinese company "going abroad" and can also be said as a local German company. He hopes Germany includes Lenovo in the government procurement list.

Wen responded that some people in Europe believe China's efforts of strengthening cooperation with Europe during the international financial crisis aim to buy out Europe. He could make it clear that China does not have such intention, or appetite, or ability. Chinese enterprises' investment in Germany only equals one tenth of the investment of German companies in China. China's investment abroad has just started and is totally based on mutual benefit and in strict compliance with laws.

Merkel said that Europeans who have self-confidence are not worried about the investment of Chinese companies in Europe. In fact, this kind of competition helps both sides to grow stronger.

In recent years, China Southern has expanded cooperation in Germany and Europe. The two sides established an engine maintenance company. China Southern has opened office in Frankfurt, launched the all-cargo route from Shanghai to Frankfurt and conducted financing cooperation with a number of German banks. Si Xianmin, General Manager of China Southern expressed hope in his remarks that the EU will not impose carbon tax in the aviation field. In this regard, Merkel admitted that there are different views concerning the levying of aviation carbon emissions tax in the international community, including within Germany. The EU has made ​​the decision and to change it will not be easy. Wen expressed hope that a solution acceptable to both China and the EU could be found.

Senior executives of German companies Heraeus and Voith raised suggestions on the bilateral cooperation in energy conservation, which were recognized by the two heads of government. They all believe that energy conservation will become a major area of China-Germany cooperation in the future and enjoy promising prospects.

Wen especially responded to the EU's concern about rare earth and certification. He noted that China's rare earth reserve is less than 50% of world total but its supply meets more than 90% of global rare earth demand. China exploited rare earth massively over the past few decades without paying attention to protecting the resources, the ecology and the environment and sold rare earth at very low price. Now we want to achieve sustainable development of rare earth. He pointed out that China treats foreign and domestic enterprises equally and implements the same policy and treatment on the rare earth issue.

With regard to certification, Wen said that Chinese people have increasingly recognized the protection of intellectual property rights is not to put up a show for foreigners but first and foremost protect the national interest. Within China we also need to build a level playing field and protect the intellectual property rights. Therefore, we have made great efforts in this regard from law to management.

In the conclusion remarks, Wen pointed out that a common aspiration is expressed today and that is China and Germany need to strengthen cooperation for common development. The two sides should take the 40th anniversary of diplomatic ties as a starting point to lift the bilateral economic and trade relations to a higher level.

We have made a very good beginning in the Year of the Dragon and our two sides can further promote exchanges and cooperation through the governmental consultation mechanism, said Merkel.

At the end of the event, Wen and Merkel shook hands with the Chinese and German entrepreneurs. The latter expressed gratitude to the two heads of government and congratulations on the complete success of Merkel's visit to China.

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