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| Europe |
| German exporters beat a path to the China market |
| 2004-12-05 |
| Them, too. Stand near the runway at Frankfurt airport any evening and you can be in no doubt about the strength of German exporters' trading relationship with China. Lufthansa, the national carrier, says passenger numbers on its China routes in the first 10 months were up almost 60 per cent on last year, and almost 20 per cent compared with 2002 (which was not affected by Sars and the Iraq war). The fastest growth has been in first and business class. But places on one flight to China this weekend were especially coveted. Gerhard Schröder, German chancellor, arrives on Monday with 35 business leaders on a trip largely dedicated to drumming up business leaving many disappointed colleagues behind. Friedolin Strack, Asia-Pacific co-ordinator for Germany's main business associations, says: "More than 150 companies applied to go." The enthusiasm is unsurprising. To the extent that the German economy has enjoyed a recovery this year, it has been export-led. Overall exports are up 10 per cent but exports to China, although accounting for 3 per cent of the total, increased 27 per cent in the first half of 2004. Only exports to Belgium showed stronger growth. VDMA, the German engineering association, says China overtook France in August to become its members' second biggest export market after the US. Such trends may be changing, however, making this trip more important. The brakes have been applied to China's expansion, and the euro's rise against the dollar is making German goods more expensive: the renminbi is pegged to the dollar. German exports worldwide in the third quarter were down 1 per cent compared with the previous three months. Dirk Schumacher at Goldman Sachs says: "German exports to China have grown to a level where a slowdown there would certainly be felt. Of course a recession in France would have a bigger effect, but it would be like when Germany has economic troubles and the effects are really felt in Belgium and the Netherlands." An aide to Mr Schröder admits that, as with the chancellor's five previous trips to China since May 1999, improving business ties will take centre stage this week, overshadowing talks with political leaders. Mr Schröder is to open a Volkswagen factory and preside over ceremonies marking expansion of the China operations of DaimlerChrysler and the GeorgsmarienhÃŒtte steel company. A deal worth up to €1bn on the sale of 23 Airbus aircraft to Air China is also expected to be unveiled. Mr Schröder's trip has not been universally welcomed. Critics in his centre-left coalition say too little emphasis is being placed on democracy and human rights. The Greens, the junior coalition partner, say the chancellor's proposal to lift the European Union's weapons embargo on China would "send the wrong signal to Beijing". Common sense among the Green's? My surprise meter pegged on that one. But to the businessmen accompanying him, the chancellor is doing his best to serve his country's interests. They applaud his emergence as a champion of German industry. Diether Klingelnberg, whose family runs a specialist engineering company and has secured a place on Mr Schröder's aircraft, says: "He has tried to help the German economy at home, but has not succeeded because of the opposition parties and some in his own side, so he helps in whatever way he can." But this time there are additional challenges. Joachim Schmid, managing director of the German construction equipment association, says credit restrictions in China are affecting his members, while the euro's strength is "adding difficulties". But, Mr Schmid argues, the medium-term potential for German exporters is considerable: large excavators and pumps are big sellers. Last month's German-organised Bauma construction equipment trade fair in Shanghai attracted 50 per cent more visitors and 60 per cent more exhibitors than its first show in 2002. So far the love affair with China seems to be continuing: Lufthansa says it has "not detected any notable slowdown" in China traffic in recent months. Germany also hopes to benefit from trade flows in the other direction: several Chinese-German travel agents this year launched package holidays to Germany for middle-class Chinese tourists. Chinese managers are being invited to join self-drive motoring holidays in Bavaria, giving businessmen familiar with the quality of Germany's excavators a chance to test the quality of its cars as well. |
| Posted by:too true |
| #1 Putting Chinese businessmen on the road in Germany!!! Good Lord, that's an invitation to vehicular homicide. They drive like maniacs here, honking the horn the whole way. Obscure concepts like "right-of-way" and "stop on red" are unknown. Some of you might think I'm joking or trying to be funny, but I'm dead serious. But to stay mostly on-topic, yes, China's economy is growing, and this story is rather humdrum. The English-language news regularly reports on the parade of foreign dignitaries coming to China to drum up business for their countries. |
| Posted by: gromky 2004-12-05 9:55:03 PM |