The BDI Beijing Office – a Direct Link to China
Herr Gätzner, you are heading the BDI office in Beijing since the beginning of this year. What are the main tasks of the office?
The BDI representation acts as an interface between German industry and partners in China. We maintain contact with government and administration representatives, as well as partners from associations, universities, and think tanks. Our network also covers the German Embassy and other representations of German institutions in China: for example, chambers of commerce and the offices of our member organizations, companies, foundations, and the media. In Beijing, we experience first-hand the current state of affairs in the Chinese economy and political arena – just as we can gather the challenges and issues faced by German companies in the country. With a total of three employees, we are a small but nonetheless effective team.
What are the fundamental challenges for German companies in China and what does this mean for your work?
German companies continue to struggle with restricted market access. Even if we have recently made significant progress in this area, compulsory joint ventures and bans on market access still prevail in various branches. Other important issues are legal uncertainty, insufficient protection of intellectual property and the requirements of the cybersecurity law. Moreover, the economy has recently slowed. In the fourth quarter of 2018, China’s GDP grew just 6.4 per cent – the slowest growth rate since 2009 during the global financial crisis. The ongoing trade dispute with the United States is only one reason for the slowdown. To a large extent, the causes are essentially structural and have to do with the strengthening of the role of the state in the economy in recent years. In the BDI office in Beijing, we take note of all the challenges faced by German companies in China so that BDI can feed them into the public discussion in Germany.
In January the BDI published a strategic position paper on China that attracted considerable media attention. What is the objective of this paper?
Above all, the position paper provides new food for thought for the public discourse in Germany and Europe about our relationship with China. On the one hand, China is enormously important for the German economy as a sales and supply market: more than 5,200 companies from Germany are operating there. On the other hand, this huge country is increasingly laying claim to shaping the global economic order. This has manifested itself, for example, in the Belt and Road Initiative – a gigantic infrastructure project consisting of construction and expansion of trade and infrastructure networks between China and over 60 other countries across Africa, Asia and Europa. In Germany, there has been an outcry in recent years about Chinese investors acquiring stakes in companies and making successful takeover bids. While BDI has always spoken clearly in favour of openness, we should nonetheless bear in mind that China is different. Its economic system combines state control with market economy elements. State enterprises have access to direct and indirect subsidies that are not available to German and European firms. The position paper points to these systemic differences. We must find ways to address the resulting challenges. This most certainly does not mean sealing off our own markets; rather, it involves encouraging China to undertake more reforms and more ambitious steps towards opening its markets. At the same time, Germany and Europe must make themselves fit for the industrial future. It is important that regulatory conditions are created in China that establish a level playing field for foreign and Chinese companies and reduce the number of market interventions. The same conditions for investing and conducting business should apply for all. Only with this condition can both sides sustainably benefit from global trade.