Young Professionals Membership
The AHK is now offering a new kind of membership at its Beijing
and Shanghai offices: Young Professionals under the age of 30, with
-out company affiliation, can enjoy all the benefits as an AHK mem
-ber at a special rate. For more information go to:
AHK Chief Representative gets Honourary AwardMr. Manfred Rothgänger, Delegate & Chief Representative Delegation of German Industry & Commerce Shanghai, has been awarded as Honourary Professor from the Chien-Shiung In
-stitute of Technoloy in Taicang. In 2007 the AHK partnered with this institute and established the AHK-Chien-Shiung Vocational Training Centre, the first of its kind in China, to offer practical vocational education for skilled workers, in line with Germany’s dual system. Mr. Rothgänger has played a substantial part in the development of this AHK vocational training course as well as the adjustment of the academic and technical study courses in the past four years.
Oktoberfest 2010 in South China
This years’ signature social event in South China, the Oktoberfest, will be held for the 6th consecutive time in Guangzhou in cooperation with China Hotel, A Marriott Hotel in front of Jinhan Exhibition Center from
8th-12th October. The Oktoberfest in Shenzhen established since 2006
in cooperation with the Crown Plaza Hotel will be held from 4th-7th November. The German Chamber of Commerce in South China is proud to provide its members with original German festival atmosphere and food & drinks in both cities and is guaranteeing lots of fun, dance, music and entertainment. Sponsorship opportunities are available now! Don't miss your chance, become a part of this truly German tradition and share it with colleagues, guests and friend. For sponsorship inquiries or further information, please contact Heidrun Buss:
'020-8755 8203 | * firstname.lastname@example.org
Two New Heads for Controlling Workshops
Jens Peter Otto is an Assurance Partner of PricewaterhouseCoopers (PwC) based in Shanghai, seconded from PwC Germany since 2007. He leads the German Business
Group in PwC China, comprised of profes
-sionals in Assurance, Tax and Advisory services. His professional qualifications in
-clude Wirtschaftspruefer (German CPA) and Steuerberater (German licensed Tax Advisor). His clients currently are subsidiaries and joint ventures of European, in particular German, multinational companies. Jens Peter also heads the China Business Group in PwC Germany, supporting the German member-firm of PwC in servicing Chinese companies, as well as servicing outbound invest
-ment from Germany into China. On a regular basis he gives lectures to post-graduate students at Tongji University, Shanghai.
Dr. Thilo Ketterer, Wirtschaftsprüfer (German Public Auditor), has been with Rödl & Partner, a leading German-based international audit, tax and legal advisory firm, for more than six years in China. As Partner and one of the Managing Directors in China he is in charge of assurance, out
-sourcing, tax advisory and business consulting services provided by Rödl & Partner offices located in Shanghai, Beijing, Guangzhou and Hong
Get Ready for the German Ball Beijing 2010!After the ball is before the ball: Preparations for the 10th German Ball on 13th
November 2010 at the Kempinski Hotel Beijing have begun. Get involved now and support the event as a sponsor or partner. For more information please contact Magdalena Kempa at email@example.com
Kong with more than 120 professionals. After graduation in Business Administration at the University of Tübingen and doctorate at Ruhr-University Bochum, Germany, Dr. Ketterer has gained practical and profound experience in professional aspects for more than 16 years. His main focus lies in assurance (external and in
-ternal audit); prevention and forensic services, assets and inventory management; business consulting services including tax planning strat
-egies and M&A projects.
Ralph Dreher was leading the workshop from 2007 to date with ex
-traordinary engagement and commitment. He enriched the German Chamber community with his energetic, outgoing and open-minded character. The German Chamber of Commerce is thankful for his contributions and wish him all the best for his endeavours in Japan.
German Ball 2010 - Save the Date!
The 13th German Ball will be held on 27th November 2010 at the Grand
Hyatt Shanghai. Come and dance with us on the Orient Express. Ticket sale starts late September. For further information please contact Sebastian Zettelmeier:
'021 5081-2266 ext. 1605 | * firstname.lastname@example.org
Join our XING Group!
GCC l Shanghai is paying tribute to web-savvy members and social
networking trends. Become a member of the newly founded ‘German Chamber of Commerce in China - Shanghai Group’ to stay tuned on the latest news and happenings in and around Shanghai. Meet and interact with other members and systematically expand your virtual network. All just a click away at www.xing.com/net/gccshanghai/
Would you be interested in sharing your expertise with the community? Do you have a topic which you are passionate about and would like to present to business leaders in Shanghai? If so, you are welcome to contact our workshop leaders directly or send your topic suggestions to Jan Höpper at GCC l Shanghai. We are looking forward receiving your
suggestions, enabling us to offer even more interesting workshops in the future. For further information please contact Jan Höpper:
Tapping into the Business Potential of
Chengdu and Chongqing
West China Workshops in Shanghai and Beijing
This year marks the tenth anniversary of the Great Western Development Strategy (GWDS) launch, China’s first comprehensive funding programme to improve the situation of its hinterland. After a decade of regional development strategies, foreign invested companies still hesitate to make the move westward. The lack of qualified staff, modern infrastructure and professional government support presented a serious challenge for investors and, to a certain extent, still prevail today.
However, when taking a closer look at the last two to three years, development in China has changed dramatically, especially in Sichuan Province with the main centre of activity in Chengdu and the municipality of Chongqing. The industrial cluster is becoming attractive as a location for more and more foreign companies. 25% of the RMB 4trn spending package on infrastructure and social welfare were earmarked for earthquake affected areas in Sichuan province in 2008. A big portion of the stimulus package to counter the effect of the global financial crisis in 2009 is distributed to West China as well. Moreover, with the collapse of the global demand for the coastal belt’s export products, the Chinese government have been forced to refocus on developing the domestic market and boosting private demand. Paying tribute to this development,
under the umbrella of the German Chamber Networks (AHK) the Delegations of German Industry & Commerce and the German Chambers of Commerce in China are expanding its activities in West China, focussing on Chengdu and Chongqing. With the support of the German Federal Ministry of Economics, the office in South China has taken over the patronage of all related activities in this area since it’s the geographically closest office and has been present in Chengdu through a Liaison Manager since late-2008.
After a successful kick-off event with German company representatives in Chengdu in May 2010 and several company visits and discussions in Chengdu and Chongqing, the AHK South China strived to inform the Headquarters in Shanghai and Beijing about business potentials and strategies for further market development in this region. For this purpose, the Chamber recently updated its 2008 study on western China in cooperation with the Germany Trade and Invest (GTAI) and was therefore able to present the latest news and developments to its audience. About 30 participants joined the West China Workshop in Shanghai and Beijing respectively.
The Chamber’s new Chengdu Liaison Manager Ms. Astrid Schröter started her presentation by stating some general facts and characteristics of the two provinces Sichuan and Chongqing. Dr. Roland Rohde, the author of the AHK-GTAI Western China Study then presented key findings of the study, explaining that salaries, rental fees and prices for electricity and water are lower than coastal regions on average. However, companies should keep in mind the additional logistics cost and overall supply chain challenges due to a lack of experience of local transportation companies.
Afterwards, Ms. Schröter presented the ambitious infrastructure projects in Sichuan and Chongqing with massive investments in railways, roads, logistic centres, ports and airports. The Chongqing Free Port shall expand its capacity to 102 container and bulk cargo berths and a maximum annual capacity of 146mn tons by 2013. The port will then be able to cater to a greater capacity than any other inland port in China. Besides doubling the cargo capacity of Chengdu’s Shangliu Airport in 2009 to 400,000t, the fourth biggest air hub in China will be established in Jianyang airport north of Chengdu with planned 2mn tons of annual cargo capacity upon completion in 2015. Moreover, the Railway Bulk Logistics Centre in Chengdu will become the biggest hub in Asia with 26.3mn tons annual capacity by 2015. Subway construction and expansion of the high speed train to Chongqing is also under way. Additionally, the local government increases the quality of the power grid in order to (from left) Mr. Erik Oortwijn, Mr. Dr. Roland Rohde, Ms. Alexandra Voss,
Ms. Jutta Ludwig, Mr. Dirk Lange, Ms. Astrid Schröter
2010 August - September
www.china.ahk.deprovide a stable supply of electricity.
Despite overall improvement of infrastructure and investment climate, the Chinese central and local government offer specific tax advantages or abatement of rents for foreign invested companies operating in a promoted industry like automotive, chemical, logistics, hospitality, water treatment, and IT and electronics (Chongqing only).
Currently, there are about 70 German companies situated in Chengdu and 30 in Chongqing. The AHK South China invited one company representative from each city to share individual experiences and provide hands-on advice on the living and working situation in Chongqing and Chengdu. Mr. Dirk Lange from Duravit (China) Sanitaryware Co. Ltd. explained the challenges for his logistics operations since the companies products are big, bulky, easy to break and need to be timely transported to the customers that are mainly located in coastal areas. He also dismantled some of the Shanghai and Beijing audience’s prejudices about Chongqing. In Beijing, Mr. Erik Oortwijn of Balluff Sensors (Chengdu) Co. Ltd. shared insights about his personal and professional decisions to move to Chengdu, and the positive experience with local government and employees. He could especially share facts about the educational situation and living conditions for families, having a wife and two kids of his own.
When asked for their evaluation of the region’s future development, both Mr. Lange and Mr. Oortwijn agreed that Chengdu as well as Chongqing will be dynamic markets and great locations for catering to domestic demand. However, the region will certainly not overtake the development level of coastal regions, but might come very close. In closing remarks at the Shanghai event, Dr. Rohde inquired about
Event: Westchina Workshop – Business potentials and strategies for market development in Sichuan and Chongqing
Dates: 22nd June 2010 in Shanghai and 24th June 2010 in Beijing
Venues: Sofitel Hyland Shanghai and Kempinski Hotel Lufthansa Center Beijing
Speakers: Ms. Astrid Schröter | Chengdu Liaison Manager; Dr. Roland Rohde | Delegate for Hong Kong, South and West China, Germany Trade & Invest GmbH
West China Representatives: Mr. Dirk Lange | Managing Director, Duravit (China) Sanitaryware Co. Ltd; Mr. Erik Oortwijn | General Manager, Balluff Sensors (Chengdu) Co. Ltd.
Chair: Ms. Alexandra Voss | Delegate & Chief Representative | Delegation of German Industry & Commerce Guangzhou
The AHK-GTAI West China Study 2010 will be available from August 2010 via email@example.com or www.gtai.de
difficulties, differences and advantages of running a business in West China. With experience at his factory in Chongqing, Mr. Lange responded: “Its adventurous and you need China experience, but then you could have great success in this ambitious region of China.” We thank Mr. Lange and Mr. Oortwijn for their contribution to our Western China Workshop and for discussing and sharing their personal perspectives openly with the audience. HB
Executive Vice President
Daimler Northeast Asia Ltd.
Chairman & CEO
Mr. Ulrich Walker German Chamber Beijing
Delegation of German Industry & Commerce Beijing
Delegate & Chief Representative
Ms. Jutta Ludwig*
KPMG Huazhen Certified Public Accountants
Mr. Andreas Feege
Lufthansa German Airlines
General Manager Beijing, Chief Representative
Ms. Martina Grönegres
Deutsche Bank (China) Co. Ltd.
Director, Head of Corporate Banking Coverage, China
Mr. Eddy Henning
Volkswagen (China) Investment Co. Ltd.
Executive Vice President, Finance Department
Dr. Jörg Mull
Giesecke & Devrient (China) Information Technologies Co. Ltd.
Dr. Roland Savoy
TUI China Travel Co. Ltd.
CEO Mr. Marcel Schneider GMH – Holding China Chief Representative Mr. Jöran F. Treppschuh
Event: Market Research in China – A Challenge for German Companies
Date: 13th May 2010
S p e a k e r : P r o f . D r. S c h e l l h a s e | Professor of Marketing at the Darmstadt U n i v e r s i t y o f A p p l i e d S c i e n c e s , Chairman of the academic advisory board of Prof. Schellhase Consulting Ltd.
* All-China Board member
After a year of planning, Executive Chamber Manager Katja Sassi-Bucsit was finally able to welcome Prof. Dr. Schellhase to the Ger
-man Chamber on his most recent visit to the Middle Kingdom. Traveling from Germany three to four times a year, this time he was ac
-companied by a group of 23 students from his academic base, the University of Applied Sci
-ences in Darmstadt, and on his way to Xi’an, where he also teaches. A Marketing expert and authority in his home country, he lectures, publishes, consults and presides in numerous academies, journals, businesses and marketing societies – but conducting market research in China, he said, was an entirely new territory. Dr. Shellhase’s presentation detailed the re
-search project and related study he had con
-ducted between 2005 and 2008 among Ger
-man companies in China. This initial research was initiated by a worldwide customer satis
-faction survey for a German machinery pro
-ducer. His exploration of B2B market research activities of German companies in China, and how the intensity of market research impacted their target achievements, took him on a journey – including many taxi rides, he pointed out – between North and East China for personal interviews with 69 top level managers and CEOs of German companies. However, the professor had not come to lecture. Encouraging a lively dialogue with the expert au
-dience members, Dr. Shellhase’s qualitative and quantitative study findings were complemented and expanded by the participants’ experiences and observations. The professional exchange concluded that although the extent of market research greatly depended on the market entry strategy and there was a measurable positive correlation between a high intensity of market research activities and high target achievements, China still provided challenging grounds. The accessibility of market information, partic
-ularly in highly specialised fields, was still sub
-ject to countless barriers, and the problematics of obtaining current and reliable figures from quality sources were evident. Not available to everyone and sometimes available for a fee, statistics struggle to even remotely represent the geographic, demographic, social and com
-mercial vastness of the country. Industry and trade associations or clubs were pointed out as one promising contact point. One audience member related from personal experience that surveys conducted through foreign companies must be officially registered. Further discus
-sion lobbied for the need to register foreign
companies and offered recommendations for a culturally and circumstancially sensitive ap
-proach of the Chinese consumer in customer satisfaction surveys.
While on the German side, market research companies failed to impress their German clients exploring the Chinese market simply because they tried to do their work from a dis
-tance without any local references whatsoever, the participants agreed that on the Chinese side, companies still greatly lacked awareness of this effective tool and often moved around blindly in a ’goldrush environment’. Although market research was gradually establishing itself in the B2C segments, the B2B field still provided a large uncharted market in itself for market research service providers in China with plenty of growing ground to benefit from.
2010 August - September
Following the successfull series of workshops about mandatory benefits and payroll processing held across China by Dezan Shira & Associates, the Beijing Chamber organised the same workshop focusing on risk and efficiency management of small and medium-sized enterprises operating in China. Michael Maeder of Direct HR presented the major challenges in the recruitment process and provided tools on how to involve compensation in the four recruitment stages: profiling, candidate identification, selection and on-boarding. Adam Livermore of Dezan Shira & Associates covered the management of mandatory benefits and payroll processing. Payroll management is a concern for all companies, as ensuring that payrolls are processed correctly and efficiently is critical. Many have considered outsourcing their payroll processing due to its many benefits, including increased transparency and control, increased confidentiality of payroll information, as well as greater accuracy and efficiency. China’s mandatory benefit administration is complicated as it includes pension, medical insurance, unemployment, maternity, work injury and housing funds, all of which are dependent on local and national laws. Due to the complicated nature of these laws, companies find that outsourcing payroll management is a more efficient and accurate solution.
When considering mandatory benefits, em
-ployers should check before offering employ
ment to a candidate who requires mandatory benefit contributions. Usually, the cap for contributions is 300% of the city’s 'average social salary,' though the system varies in each city. Also, housing fund administration is complex, so companies and employees should agree on a precise method of payment and proportions before employment. Another important topic Mr. Livermore covered was the use of secondment contracts, which are contracts between employers and human resources agents who hire out employees. Compared to direct employment, secondment contracts can be worthwhile to the ultimate employer, but only if the terms of the service contract are appropriate. However, smaller companies are usually unable to negotiate favorable terms. It is important for companies in China to understand the key aspects of these contracts as some of the terms may affect your business. For example, if an employee is dismissed in the absence of misconduct evidence, the employer may be obligated to pay the employee’s salary until the end of the term (minimum two years); in cases with open-ended term agreements, that may be until retirement. Furthermore, secondment contracts should only be used for 'non-core' staff—temporary, substitute and auxiliary job positions. Lastly, the use of secondment contracts leads to high staff turnover, which can be inefficient and costly. For SMEs it can be cheaper, more efficient and less risky to enter into direct labour
Event: HR Workshops: Mandatory Benefits, Compensation and Payroll Processing
Date: 1st June 2010 in Shanghai, 2nd June
2010 in Hangzhou and 3rd June 2010 in
Speakers: Mr. Adam Livermore | Payroll Department Manager, Dezan Shira & Associates; Mr. Michael Maeder | Account Manager, Direct HR
Chairs: Mr. Rolf Koehler | General Manager, Freudenberg Management; Mr. Sebastian Wegener | Regional Manager Jiangsu & Zhejiang Province, German Chamber of Commerce l Shanghai
Event: HR Roundtable: Manage Risk and Improve Efficiency in your People Program
Date: 23rd June 2010
Speakers: Adam Livermore | Regional Manager, Dalian Office - Dezan Shira & Associates | Michael Maeder | Account Manager – Direct HR
contracts, while outsourcing mandatory benefit management and payroll processing to a specialist company.
Sustaining ShoresWhat happens in China does not always stay
in China – Dr. Steffen Kinkel from the Fraun
-hofer Institute for Systems and Innovation
Research in Karlsruhe feared no repercus
-sions for making a point out of that. After all, his objective was to examine the underly
-ing trends, patterns, motives and strategies of German direct investments in China in connection with production and R&D reloca
-tions, and to deliver a set of factors allowing German companies to successfully stay in China. Through economic periods of heavy swells and ebbing tides on the offshoring movement, the diametric phenomenon of backshoring remains under rug swept – but with every fourth or fifth relocation decision being fully or partially reversed within two to four years and one backshoring occuring per every five relocating companies, it is for the first time at a relevant level in connection with offshoring to China.
On the map he outlined both production and R&D sustainability for success in China, Kinkel also pinpointed clear landing stages on the way: a thorough definition and execu
-tion of the strategic role and goal of the new
site, the management of qualitative meas
-ures as quality standards, reliable processes, the innovation ability and the flexibility in the fulfillment of customer demands. Urging companies to seize their local sourcing po
-tential to the fullest, he advocated in-depth knowledge of local supply chains and ongo
-ing efforts towards the integration into local value chains. He also emphasised the devel
-opment of scenarios and monitoring of early indicators in preparation for dynamic local
Event: Success Factors for Sustaining Production and R&D in China – Perspectives for German Companies
Date: 8th June 2010
Speaker: Dr. rer. pol. Steffen Kinkel| Head of Department Industry and Services Innovations, Fraunhofer Institute for Systems and Innovation Research (ISI), Karslruhe
Chair: Katja Sassi-Bucsit | Executive Chamber Manager of * GCC Beijing Hanna Böhme | Managing Director, German Centre for Industry and Trade Beijing
Production and R&D Relocation
changes in combination with a Plan B and Plan C if local dynamics did not turn out as expected. As a further risk management strategy, he recommended the continuous supervision and coordination of innovation and know-how protection measures. Particularly the highly relevant case of in
-tegration into local supply chains stirred the gathered expert audience representing a variety of industries. An animated discus
-sion touched on concerns and experiences in this matter. With positive recounts of this time and cost-consuming process involving a great deal of justification, demonstration and convincing of the company home base
and management in Germany, the consen
-sus was that this path was one success fac
-tor that was essential to pursue. Old busi
-ness and industry China hands perceived the skepticism, hesitation and resistance received from the German side as major stumbling blocks to their personal localisa
Dr. Ulrike Tagscherer, Associate Professor at the Chinese Academy of Sciences, offered her perspective: “The topic of production and R&D relocation is of a particularly capti
-vating political matter as it almost automati
-cally raises concern about job losses in Ger
-many. Relocations abroad and specifically to China generate even more of an outcry; there is an immense fear of innovation potential and power loss in the home country. The studies we have conducted in our Institute in cooperation with the industries however statistically refute any basis for these fears
– quite the contrary: the relocation of R&D activities also contributes to and strengthens home. Of course, there are always individual cases of opposing examples, but the sum of these location shifts clearly conveys an over
2010 August - September
Hessen Meets Tianjin
During his China visit at the end of June, Hessen State Secretary Mr. Steffen Saebisch also made a two-day stopover in Tianjin. Accompanied by a delegation of the Hessen State Ministry of Economy, Transportation and Urban Development, members of the Hessen State Parliament and a group of entrepreneurs, the delegation’s focus of attention was a trilateral agreement for the extension of the ongoing Financial Sector Development Programme between the two countries.
The three parties involved were the Tianjin
Event: Hessen State Delegation in Tianjin
Date: 9th–10th June 2010
municipality represented by Vice Mayor Mr. Cui Jindu, the German Technical Cooperation represented by Mr. Immanuel Gebhardt, and the German Federal Ministry for Economic Cooperation and Development represented by Mr. Steffen Saebisch. The Tianjin Assembly Hall serving as the perfect backdrop for this indicatory signing ceremony, a new chapter in the already successful cooperation between Germany and China was opened.
To reinforce the business relations on both sides and proactively strengthen the fruitful
A New Chapter of Regional Sino-German Business Cooperation
cooperation between Germany and China in the financial sector, the delegation further met and held talks with representatives and officials of the Tianjin Property Rights Exchange and Tianjin Innovative Finance Investment Co. Ltd. At an excursion to the Tianjin Yu Jia Pu Financial District and the Tianjin Equity Exchange, the delegation was visibly impressed by the sheer enormity of the concept and Tianjin’s ambitions to secure its spot as a major financial hub in northern China.
BEIJING & TIANJIN
Mr. Changyi Zhang
Chief Representative Schmitz GmbH Beijing Office
'010 6788 - 9286
Mr. Dong Liu
Toennies Food Trading (Beijing) Co., Ltd.
'010 1391 – 0155 - 808
For full contact information and company profiles of our new and existing members please visit www.german-company-directory.com
Mr. Bernd Siegel
Fuchs Lubricants (Yingkou), Ltd.
'021 3912 - 2088
Mr. Peijian Chen
President & CEO Schenck Process (Tianjin) Industrial Technology Co., Ltd.
'010 6481 - 7880
Ms. Dongmei Chen
Head of Controlling Asia Continental Automotive Corporation (LYG) CD., Ltd Changchun Branch '0431 8468 - 4836 *firstname.lastname@example.org Mr. Johannes Mueller-Diesing ChinaContact '010 6590 - 6912 *email@example.com www.owc.de Dr. Kirk Mildner '010 8527 - 5171 *firstname.lastname@example.org
TIANJINMr. Thomas Nothdurft
Zollern (Tianjin) Machinery Co., Ltd.
'022 6623 - 1860
Event: German Night at Drei Kronen Tianjin - Networking Abend im Biergarten
Date: 18th May 2010
Focus On IP
The German Connection
With regard to China’s increasing competence and relevance in R&D and Hi-Tech Industry, the global management of intellectual property is becoming an increasing concern. By implementing a professional IP management strategy, western companies can considerably improve their competitive position and reach a higher added value in the Chinese markets.
Generally and technically speaking, China’s customs regulations ban the import or export from or to China of goods that infringe Intellectual Property Rights. China Customs
Event: How to protect your intellectual property through China customs
Date: 20th May 2010
Speakers: Mr. David Pho | Events and Communications Manager, China IPR SME Helpdesk; Ms. Mai Lin | Associate, Rouse LLP Shanghai
Intellectual Property Rights Seminar
German Night at Drei Kronen 1308 Bierhausalso have the authority to protect the IPR
of European companies by confiscating
infringing goods and imposing fines on
infringers. Many China-based companies are, however, not aware of this practice, and decision makers do not know how to cooperate with Chinese Customs or appropriate authorities on the protection of their IP rights.
To provide practical answers to European SMEs the German Chamber of Commerce in Tianjin, the EU-funded China IPR SME Helpdesk and the Tianjin chapter of the
The General Managers of German companies, business corporations and organisations in Tianjin are already familiar with each other – however the staff from one company are typically unfamiliar with their counterparts at other companies doing business in the same industry sector. Therefore German Chamber in Tianjin brought together HR, Sales, Project Managers and Assistants from all over the Beijing-Tianjin region to join in a social evening with German food and beer.
European Union Chamber of Commerce invited China Customs experts to meet and discuss the topic based on real-life cases.
A programme including live music, lucky draw and lots of giveaways and the tranquil atmosphere of the Drei Kronen Biergarten along the Haihe-River contributed to making a truly great evening.
2010 August - September
Two Inter-Chamber networking events provided a good reason to connect before the summer holidays – while the weather did not honour what was supposed to be a ‘Summer’ Networking Evening and the event had to be relocated inside the Swissôtel Atrium, the sky was the limit and a rolling green lawn set the stage at the subsequent European Networking Night. The elegant Purple Jade Country Club provided a charming atmosphere for a leisurely get-together on a warm summer night that left most wondering, “Are you sure this is Beijing and not New York or St. Tropez?”
2010 August - September
TIANJIN AROUND TOWN
2010 August - September
Prêt–à–habiter: JOOP! Living Store Opening at Easy Home Mall on 21st May with Kristian Markus, CEO of JOOP! Living, and
Pierre Tsalkas of Hüpeden & Co. KG, Hamburg.
World Cup Excitement
This is a tribute to the loyal, hard-working AHK Football Fan Team – no efforts or consequences deterred the loyal supporters of Jogi Löw’s army, even at 2.30 am on a workday.
* All-China Board member Lufthansa German Airlines
Managing Director Greater China
Mr. Arved von zur Mühlen*
SGL Carbon Far East Ltd.
Dr. Günter Hermann
Deutsche Bank (China) Co., Ltd.
Director – Head of Corporate Banking and Coverage, MNC
Mr. Andreas Odrian
German Chamber Shanghai
Delegation of German Industry & Commerce Shanghai
Delegate & Chief Representative
Mr. Manfred Rothgänger* Ernst & Young (China) Advisory Ltd.
Partner and Head of GBC China
Mr. Titus Freiherr von dem Bongart
Chairman & Managing Director
Mr. Thomas Dorn
Nokia Siemens Networks (Shanghai) Ltd.
President & CEO
Dr. Fan Zhijian
POLYMAX (Shanghai) Trading Co., Ltd.
Chairman of the Board
Mr. Ulrich Mäder
Management Engineers China Ltd.
Ms. Brigitte Wolff
Event: GC Roundtable
Date: 20th May 2010
Speaker: Mr. Jochen Homann | State
Secretary, Federal Ministry of Economics and Technology
Moderator: Mr. Frank Hollmann | China
Chair: Mr. Manfred Rothgänger | Delegate &
Chief Representative, Delegation of German Industry and Commerce in Shanghai
Post Crisis China Analysis
On the occasion of the visit of former German Prime Minister Horst Köhler to Shanghai, his economic delegation joined the German Chamber Roundtable in May to discuss recent issues of economic policies. German managers working in China exchanged their views with the delegation, who are also involved in foreign trade issues in Berlin.
Secretary of State Mr. Jochen Homann provided insights into the delegation’s China visit as well as hot topics in Berlin. Focusing on consequences of the economic crisis, Mr. Homann relayed some preventative measures and elaborated on China’s role in relation to Germany and the world. During the crisis, China revealed itself as one of the strongest nations that will undoubtedly continue further growth in the future. In the mean time, the German government has enhanced talks on intensifying co-operations with the Chinese economy.
Although recent developments, especially regarding the unemployment rate, have been quite positive, Mr. Homann still sees a lot of macro-economic risks. For example, there is a concern of increasing debt-burden of European countries. However, further analytical exploration of the situation is inevitable and required to develop future contingency plans. Mr. Homann sees a gap between some managerial and company risks and liabilities, which has lead to extreme excesses in the markets.
Causes of the crisis, reactive measures and the recent Euro-depreciation were also dis
-cussed, yet opportunities of the Chinese markets were of central interest. The consen
-sus was that there is great potential in the Chinese market, but also tough competition with local players. Chinese innovation, how
-ever, is a potential threat to Germany as an innovation centre.
China’s development has two vital tendencies: sustainable resources and energy management in booming cities. There may be great opportunities for German companies in these fields since they are well known for high-tech expertise, but the development of Chinese companies and solutions is also accelerating. From left: Mr. Frank Hollmann, Prof. Rolf Cremer, Mr. Ulrich Mäder, Mr. Jochen Homann and Mr. Manfred Rothgänger
Prof. Rolf Cremer contributes to the discussion
2010 August - September
Enviro-Techno Trade Fair
econet china participates in IFAT CHINA +
EPTEE + CWS 2010
Event: IFAT CHINA + EPTEE + CWS 2010
Date: 5th-7th May 2010
Germany was well represented at the International Trade Fair for Water, Sewage, Refuse, Recycling and Natural Energy Resources (IFAT CHINA + EPTEE + CWS 2010), as the only non-Asian country of the top five visitor regions among 84 other nations. Messe München International (MMI), the organiser of IFAT CHINA, and Shanghai ZM International Exhibition Co. Ltd, the organiser of China EPTEE + CWS, are credited for this astounding collaboration that yielded the biggest environmental technology trade fair in Shanghai.
IFAT CHINA’s prominent international profile and EPTEE + CWS’ domestic importance complimented each other as 7,000 guests attended the event and took part in the many prestigious workshops, conferences and exhibitions that were featured. There was a strong demand for exhibition space at the event, yet all 839 participating companies managed to comfortably establish their presence in the Shanghai New International Expo Centre (SNIEC) – including a booth from the German Chamber’s econet department that attracted a steady flow of inquisitive visitors over the three days.
The German Chamber’s econet also participated in a workshop to elaborate on possible measures for realising higher energy efficiency standards in China's water supply and waste water sector, titled ‘Energy Efficiency in Water Supply and Wastewater Treatment’. The workshop was organised by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety and featured presentations by several influential company representatives in the respective industry.
During the workshop experts from Germany and China offered a firsthand look at state of the art energy-saving technologies in waste water treatment and water supply, while giving practical examples from Germany and China and drawing comparisons between the two countries. Specific key technologies like cutting-edge aeration control systems were also introduced, and their potentials and lifecycle costs were analysed.
Event: Liability risks of the management and
the Board of Directors in China
Date: 11th May 2010
Speaker: Mr. Philipp Senff | German Attorney at Law, SJ Berwin LLP
Chair: Mr. Sebastian Wegener | Regional Manager Jiangsu &
Zhejiang Province, German Chamber of Commerce in China
Liability Risks for Decision
The Hangzhou Special in May had a specific focus on similarities and differences in management and supervision structures in Wholly Foreign Owned Enterprises (WFOEs) and Joint Ventures (JVs) in China. Attorney at Law, Mr. Philipp Senff of SJ Berwin LLP Shanghai, came to speak to this occasion. His presentation began by defining roles of key decision makers in a company such as the General Manager and Board of Directors and then covered the terms and situations in which each party may be held accountable. Some organisational aspects of companies can have an impact on the person’s liability for legal breaches. For example, a WFOE is the sole type of organisation with a Board of Shareholders (BoS) as the highest decision making body. Some examples of the power of the BoS include the appointment of the Members of the Board of Directors (BoD) and Board of Supervisors, the approval of reports of the BoD, the approval of the company’s proposed annual financial budgets and final accounts and the change of legal documentation. Contrary to the WFOE structure, an Equity Joint Venture (EJV)/ Cooperative Joint Venture (CJV) has a BoD that is appointed by its shareholders and acts as the highest decision making body of a Research Joint Venture (RJV)/CJV. A main task of the BoD in this structure is to issue resolutions, which are then executed by the General Manager. Articles of Association may specify the power of the BoD in both legal forms.
In the second part of his presentation, Mr. Senff focused on the obligations of management and the Board of Directors, stating that the main problem in China is that general obligations and compliance with PRC laws are often situated in a grey area and uphold a lack of transparency.
A difference between liability risks under company law, administrative liability risks under civil law and liability risks under criminal law must be distinguished. The legal basis for these risks can be found under article 149, 150 and 153 of the PRC Company Law, which states that all BoD members and Senior Officers are liable in these cases. The main requirements for a liability case are a breach of duty through the violation of PRC law, administrative regulations, or Article of Association.
The main requirements for administrative liabilities are illegal activities of the legal representative, such as the conduct of business beyond business scope, fraud against authority or unauthorised withdrawing of funds from the company. The legal consequences depend on the form of liabilities and can be an admonition, fine, confiscation of property or custody up to 15 days.
Dr. Fritz Holzwarth, Deputy Director General for the Federal Ministry for the Environ
-ment, Nature Conservation and Nuclear Safety speaking at the ‘Energy Efficiency in Water Supply and Wastewater Treatment’ workshop at the IFAT CHINA + EPTEE + CWS 2010
Better Communication, More Sales
Event: Kunshan Roundtable
Date: 25th May 2010
Chair: Mr. Sebastian Wegener | Regional
Manager Jiangsu & Zhejiang Province, German Chamber of Commerce in China
During the latest Kunshan Roundtable participants talked about the topic ‘Communication with Headquarters in Germany’. The discussion concluded that in most cases a company’s global sales strategy lacks the integration of Chinese market knowledge, which is a result of insufficient and poor communication between colleagues located at the headquarters and those based in China. The participants pointed out that an adaptation of global sales strategies to the local demands would bring forth a profound successful strategy, more achievable goals and higher sale revenues.
Further conversation steered towards strategy planning and it was noted that headquarters are often more lenient when the results are achieved. However, each experience deviates from one another. Companies that are in hand with Private Equity Societies require more complex reporting and attendants deemed that further alignment with headquarters must be developed in this respect. This may assist with comparative analysis of company figures to help determine the strong points and areas of improvement for each company.
The pursuit of one common goal enables parties to be formed, therefore the highest priority in this respect is to make the problem transparent and assign tasks to a group so it may be relieved. A candid relationship with the German colleagues at headquarters must serve as the foundation for this consolidation.
Participants also mentioned that it is vital to develop recognition of informal networks within the principal firm, as important decisions are often collectively made. Each case is dependent on the persons involved, but will progress through honest and direct communication.
Event: Dinner Reception
Date: 17th May 2010
Speaker: Dr. Walther Leisler Kiep | Honorary
Chairman and Chairman Emeritus, Atlantik-Brücke e.V.
Chair: Mr. Arved von zur Mühlen, Chairman
of the German Chamber of Commerce in China l Shanghai
Event: Joint Chamber Trade Fair
Date: 24th May 2010
A Bridge to China
The Board of the German Chamber of Commerce in Shanghai recently welcomed a delegation of 20 members from Atlantik-Brücke (Atlantic Bridge), a transatlantic institution established from decision makers of various fields as well as high ranking politicians. Former Finance Minister of Lower Saxony, Dr. Walther Leisler Kiep, who is also the Honorary Chairman and Chairman Emeritus of Atlantik-Brücke, led the delegation on its twelfth trip to China.
Due to the diversity of the participants the evening brought forth a very lively discussion
between the Chamber Board and the delega
-tion members. Focus was put on the further development of German companies in China as well as what China already means to the world. Dr. Leisler Kiep remarked that each trip of Atlantik-Brücke to China is different since the country changes and develops so quickly. Atlantik-Brücke is located in Germany and mainly aims to promote a better cultural understanding between Germany and the USA. Next to the organisation of seminars, conferences and others, Atlantik-Brücke also conducts several study trips to other countries, guided by its Executive Vice-Chairman Dr. Beate Lindemann.
Delegation members and guests
Dinner with the Delegation of Atlantik-Brücke
Dr. Leisler Kiep
Over 50 companies from different industries seized the opportunity to present themselves to spectators at the Joint Chamber Trade Fair held at the Shanghai Centre on 24th May
2010. The German Chamber of Commerce in Shanghai along with six other chambers from different European countries organised this special exhibition together.
The idea behind it was that members of
each chamber and other participants had the chance to meet each other during one day. Hence personal conversations and networking opportunities took place to deepen existing relationships and create new ties. The German Chamber is already looking forward to the next Joint Chamber Trade Fair with prospects of making it even more exciting and rewarding for both exhibitors and guests.
2010 August - September
Event: Germany’s Position for Sustainable Solutions in China
Date: 25th May 2010
Speaker: Prof. Albert Speer | Albert Speer & Partner GmbH (AS&P)
Chair: Ms. Magali Menant | Head of Department Building, Energy and
Environment, econet china
The AHK had the honour to welcome renowned Professor Albert Speer as the speaker of the construction workshop held in front of a crowded audience in its premises in late May. The focus of his presentation was Shanghai and the World Expo, both of which Prof. Speer approached with familiarity and confidence. Being involved in preparations of the 2000 World Expo in Hannover, he was able to consult with the frequent Chinese visitors who sought his assistance with planning the 2010 World Expo in Shanghai.
Professor Speer informed the listeners that the Shanghai World Expo was originally to be held in the outskirts of the city to prevent impact on existing development, but further consultation determined that it was much better to have the grounds in Pudong’s High Technology Park. This resulted in its transformation from an old run-down part of Shanghai into a dense and sustainable urban development that will last for centuries. Prof. Speer observed during his recent visit to the Expo that China’s great improvement in design is shown through its gardens and trees, the new Bund and the auto tunnel, noting that the quality of design in these areas are of world class.
Then speaking of the German side of construction, he said there are chances and risks for companies in all fields, but Germans around the world have a positive image in many aspects: they are reliable, tech
-nology savvy and relatively easy to work with. These aspects should be used as a resource, but mostly Germans are not using them to their advantage. They are not doing enough to concentrate their efforts and political separations, which is a large contributor to the problem. As a final Expo remark, Prof. Speer mentioned that the Urban Planet was also German-made to a large extent and encouraged the partici
-pants to visit the site to see what has already been done and what will be done. The project is a product of German firms, sponsors, and knowledge and is truly something to be proud of.
He also spoke about two large scale multi-function sustainable con
-struction initiatives that were not realised because of technical, legal, and distribution differences. This lead to his concern of cooperation between companies that are attempting to realise a multi-function project, but fail to succeed due to an inability to work together. The discussion then turned to a focus on the new DGNB (German Sustainable Building Council), and Prof. Speer expressed that the
current US counterpart, LEED (Leadership in Energy and Environ
-mental Design), is lacking the sophistication to cover all areas of
sustainable development. However, LEED has now been function
-ing worldwide for 20 years while Germany has been work-ing for 20 years to develop a system too. It is now so complex that no one is adopting it except for a few business buildings. Yet, even though it is too complicated to be implemented in China, it should still have long-term benefits.
Event: Chamber Meeting
Date: 25th May 2010
Speaker: Dr. Wolfgang Roehr, Director of
the task force ‘Germany and China’ at the German Foreign Office
Chair: Mr. Arved von zur Mühlen
Managing Director Greater China Lufthansa German Airlines, Chairman of the Board German Chamber of Commerce China l Shanghai
Event: Special Seminar: Insurance Coverage
for Expats in China
Date: 9th June 2010 in Shanghai and
10th June 2010 in Suzhou
Speaker: Dipl.-Kfm. Werner John | Senior
Consultant, Expatriates Insurance Consulting
Chairs: Mr. Jan Hoepper | Regional Manager
Shanghai, German Chamber of Commerce in China l Shanghai and Mr. Sebastian
Wegener | Regional Manager Jiangsu & Zhejiang Province, German Chamber of Commerce in China l Shanghai
At the May Chamber Meeting Dr. Wolfgang Roehr, Director of the task force ‘Germany and China’ at the German Foreign Office, presented the project ‘Germany and China – Moving ahead together’, an initiative by the Foreign Office in cooperation with the Goethe Institute, the Asia-Pacific Committee of German Business and the Marketing für Deutschland GmbH, along with support from Allianz, BASF, Daimler, Deutsche Bank, DHL and Siemens. The project was held under the joint patronage of Germany’s former Federal President Horst Köhler and China’s Presi
-dent Hu Jintao.
Dr. Roehr indulged the attendees with the project's aspirations, accomplishments and future implications of this three-year event series. With the goal of using mutual understanding as a tool for successful Sino-German cooperation, Dr. Roehr explained how the extensive event series has also helped to strengthen the image of Germany as a future-oriented, innovative country. His mesmerizing speech led to a very lively discussion between Dr. Roehr and the audience. The central theme of the three-year event was sustainable urbanisation, especially for China con
-sidering its rapid development instigates major social, economic, environmental and cultural chal
-lenges. Therefore the project required a broad time frame to allow more than 600 events to take place
in various regions and cities across China. Dr. Thomas Awe, Konrad-Adenauer-Stiftung
Dr. Wolfgang Roehr
Are You Covered?
Expatriates who plan to stay on a long-term basis in China should think about being adequately insured. Dipl.-Kfm. Werner John of Expatriates Insurance Consulting came to elaborate on Insurance for Expats during a two-day event series in Shanghai and Suzhou to the avail of a great number of participants. Most expats have little or no knowledge of insurance coverage in countries they are sent to. The company’s headquarters in Germany often dismisses to conduct or provide a neces
-sary risk assessment to its employee prior to his/her assignment abroad. This leaves room for vulnerability due to negligence and help
During the seminar, Mr. John gave the participants useful advice about social insurance security, health insurance, long-term care insurance, employer’s mutual insurance associations, accident insurance and disability coverage. One of the main issues discussed was how to minimise the risk of incurring medical expenses by carefully
reading policy information. Certain specifics to watch for in a health insurance policy are the coverage of return transport to Germany in urgent cases, accident coverage for the employee and family members. Furthermore there are differences between an expatriate contract, which requires the employee to contribute to social insurance in Germany, and a local contract where adequate private insurance is needed.
In general, it is advisable for expats who are working in China to have foreign health insurance, a contingent right of the German health insurance and nursing insurance, ac
-cident coverage and disability insurance. In addition, Mr. John advises to have a good retirement provision, casualty insurance and good provision for dependants if necessary. Legal protection insurance and household insurance are less important in China. Mr. John has been an insurance agent since 1975 and has over 20 years of China experi
-ence. He has profound experience in assisting
companies, individuals and other organisa
-tions such as the German Chamber of Com
-merce in China. Mr. John is willing to support anyone in need of proper insurance and can consult explicitly in regards to closing insur
-ance contracts, risks, and specifics for your livelihood in China.
2010 August - September
Following Taicang Day 2008 in Stuttgart and Taicang Day 2009 in Munich, Düsseldorf, the capital of the State of North Rhine-Westphalia (NRW) graciously hosted the third visit from Germany’s overseas thriving business partners in China.
Around 100 guests from political and economic backgrounds participated in the event including Mr. Lu Liusheng, Vice Mayor of Taicang City. At the seminar, Mr. Lu Liusheng made a brief introduction concerning the up-to-date economic, social and investment environment in Taicang. Mr. Manfred Rothgänger, Chief Representative Delegation of German Industry & Commerce Shanghai also delivered a speech regarding the stable and steady development of German enterprises in Taicang and important economic and training programmes taking place.
In November 2008, Taicang was designated as ‘Sino-German Enterprises Cooperation hub’ by the Chinese Ministry of Commerce and German Ministery of Economy and Technology. With numbers continually rising, more than 140 German companies have already settled down in Taicang.
The event was considered an overall success as many enterprises ex
-pressed interest in visiting Taicang and investigating the investment conditions of the
so-called hometown of German Enterprises in China next to Shanghai.
Gathering in Düsseldorf
Event: Taicang-Tag 2010 in Düsseldorf
Date: 27th May 2010
Event: Breakfast Seminar: Workshop Automotive
Date: 11th June 2010
Speaker: Mr. Hans-Georg Härter | CEO ZF Friedrichshafen AG
Chair: Dr. Marcus Hoffmann | Principal, Roland Berger Strategy
Mr. Hans-Georg Härter, CEO of ZF Friedrichshafen AG, spoke about the critical phases in the automotive industry during and after the economic crisis. Providing in-depth insight into his company’s fortunes during the critical times, the speaker identified an emergence of unforeseen chal
-lenges that the company has overcome.
Today, Europe and the U.S. have not fully recovered from the crisis, but the Asia-Pacific region is heading to ward new peaks. China has espe
-cially shown immense growth in the past years and according to Mr. Härter the nation’s automobile market is on its way to becoming the greatest in the world.
Confidence remains in the eventual recovery of other macroeconomic markets as well, but companies that have taken preventative measures from the beginning, particularly in relation to liquidity and a flexible employee structure, were equipped to cope with risks and challenges. As one of such, Mr. Härter sees his company even stronger today and well-positioned for future growth as the world economy recovers.
Sustaining Production and R&D in China –
German Company Perspectives
In cooperation with the Fraunhofer Insti
-tute for Systems and Innovation Research (ISI) the German
Chamber of Com
-merce held a special seminar on China’s potential as a R&D location for German
-sor Kinkel, Head of Department Industry and Service Innova
-tions, presented a survey recently con
-ducted by his depart
The survey inter
-viewed various Ger
-man company headquarters regarding their ac
-tivities and business plans in China. Its findings highlighted that the number of German com
-panies relocating to China has grown steadily, but that there is also a noticeable amount of companies doing backshoring. Labour costs and market access are usually drivers for going to China; however, lack of quality and qualified personnel are often reasons for returning back to Germany.
When looking at the production facilities of German companies, R&D activities in China are relatively low. According to the speaker, this is due to several influences: high investments are necessary, but risky; fear of insufficient IP-protection lingers; political disputes in the home country are resource intensive; and more attrac
-tive R&D locations exist in eastern Europe. Still, the speaker sees a potential increase of
Event: Chamber Meeting
Date: 24th June 2010
Speakers: Ms. Johnny Erling | Die Welt,
Peking; Dr. Astrid Freyeisen | ARD-Hörfunk, Shanghai; Mr. Matthias Kamp | Wirtschaftswoche, Peking; Mr. Janis Vougioukas | Stern, Shanghai
Chair: Mr. Arved von zur Mühlen |
Managing Director Greater China Lufthansa German Airlines, Chairman of the Board German Chamber of Commerce China l Shanghai; Mr. Frank Hollmann |
Event: Special Seminar: Success factors for
sustaining production and R&D in China – perspectives for German companies
Date: 10th June 2010
Speaker: Dr. rer. pol. Steffen Kinkel
Fraunhofer Institute for Systems and Inno-vation Research (ISI), Head of Department, Industry and Service Innovations
Chair: Mr. Kurt Fasser | Senior Advisor,
AHK Shanghai; General Manager, CON MOTO Consulting Group Shanghai Office
China through the Lens of German Media
Chamber Meeting June
German reports are known to pessimistically showcase economic and social activities in China. Although it is debatable whether good or bad news is more captivating for viewers, some Chinese attribute single-sided arguments and an ‘Anti-Chinese-Alliance’ to the German and other western media channels. However, what they may not realise is that such negative reports are equally, if not more, harmful to German businessmen in China whose hometown stakeholders turn to local media for up-to-date information.
To delve deeper into the topic, several well-known journalists from German tier media came to share insights from their experiences. Furthermore, they elaborated on issues regarding topics of interests to their editorial offices in Germany, whether Chinese allegations of negative media portrayal are true or hypercritical and what the German journalists think about these impressions. It resulted in a lively discussion between the speakers and the audience, which disclosed that most assumptions of German reporting are misleading and untrue.
During the Chamber Meeting the General Consul of German Consulate in Shanghai Dr. Albrecht von der Heyden and his wife bid all a farewell as they soon plan to leave Shanghai. Both thanked the German Chamber of Commerce and its members for the great times shared together.
Dr. Frédéric Jörgens, Consul at the German Consulate Shanghai, then seized the opportunity to present the running campaign titled ‘A Piece of Germany’, targeted at identifying Germany’s ubiquitous presence at the 2010 World Expo as well as at various companies and locations. The stickers are distributed free of charge at the German Consulate and the German Chamber of Commerce in Shanghai.
R&D activities in the future for China once the world economic crisis is overcome. In order to succeed with these activities, companies must make use of the local supply chain and impose a rigid intellectual property protection plan. The guest speakers receive gifts from
Mr. Arved von zur Mühlen
Farewell to Dr. Albrecht von der Heyden and his wife
Speaker Dr. rer. pol. Steffen Kinkel
Mr. Thomas Dorn holding the campaign sticker for ‘A Piece of Germany’
2010 August - September
Risk behind the Growth
Event: Suzhou Special: Corporate Payment Behaviour in China in 2009
Date: 26th May 2010
Speaker: Mr. Benjamin Gan | Deputy Regional Manager Greater
Chair: Mr. Sebastian Wegener | Regional Manager Jiangsu &
Zhe-jiang Province, German Chamber of Commerce in China l Shanghai
In his presentation Mr. Benjamin Ganat, Deputy Regional Manager Greater China at Coface Holding, a French company that provides
worldwide credit insurance and credit management services, fo
-cused on the fifth credit crisis in 2009. Most emerging countries were able make it through the crisis and the BRIC States still show high growth, however industrialised countries experienced many conse
-quences such as economic stagnancy and unemployment.
In China, risk assessment is a central issue. Through statistics gener
-ated by Coface, Mr. Gan illustr-ated the major economic indicators in China that allowed the company to deduct various risk assessments. The first assessment showed resilience in 2009, thanks to the eco
-nomic stimulus programme with a rebound expected in 2010. About 60% of respondents agreed that the government’s stimulus package has effectively helped their businesses. The top five sectors reported to have benefited from the government’s stimulus package include household electrics, construction, steel & metal, transportation and agriculture.
The second assessment states that there is a risk of overcapacity and default within 2010. High-risk industries such as steel, construction, textiles and toys show a persistent weakness. The third assessment shows a strong financial position in China because of its current high account surplus and foreign exchange reserve. However, the banking risk remains high due to the expansion of credit that has accelerated significantly in 2009. The fourth risk assessment indicates that there are deficiencies in China’s business environment. The gap between rural and urban areas is growing, environmental problems emerge and there are quick and unexpected changes in regulations as well as a weakness in the financial and legal environment.
A survey from 2009 containing information on the nature of inter
-viewed companies’ business activities and their region as a whole was then introduced to help explain the status of corporate credit
risk management in China. After that Mr. Gan mentioned the cor
-porate credit management practices such as procedures, difficul
-ties, high risk companies and responsible departments. He further showed a general analysis of China, which highlighted the potential
-ly strong sectors for 2010 and others that should be close-ly watched.
Potentially Strong Sectors in 2010:
l Industrial machinery & electronics sector l Household electric/electronic appliances sector l Construction
Potentially Weak Sectors in 2010:
l Textile & Garment l Paper & printing l Steel & metals sector
The speaker’s main conclusion suggested that credit sales are be
-coming more and more popular in China and there is yet further opportunity for growth. The crisis in 2009 pursued less aggressive strategies in business; however, among offered credit sales, 56% more companies offered credit terms that were longer than 90 days in 2009, especially in comparison to 2008. Securing existing market shares and enhancing existing customer relationships are the main
contributing factors to this change. As a general view, more than 60% of respondents believe that the default situation of payment will im
-prove by the end of 2010.
for career development elsewhere, insuffi
-cient contract renewals, not enough support from Germany, or their skill sets are better suited to another job. A lack of direct contact with management, or not seeing eye-to-eye with the CFO, HR manager, or GM assistant
(GM right-hand-man/administrative per
-son) were also repeatedly stated reasons. Most Chinese will not say why they are leav
-ing a company because they do not want disharmony or to hinder their chance of re
-turning to the company if needed. Therefore exit interviews are insufficient tools in deter
-mine the cause for their departure. Anony
-mous interviews with sincere interviewers can get more information. It’s important to talk to current and former employees. There should not be any conflicts of interest to the interviewee.
One issue with having a staffing agency hire your employees is they will often find the
person with the best education and back
-ground for the job. However, Dr. Lin’s strat
-egy is not to hire graduates of well-known universities because the candidate will even
-tually want to move on to bigger companies. The HR department or recruitment staff must find a balance between skills, educa
-tion and qualifica-tions in order to retain the
employee. Also, unstable personal circum
-stances contribute to retention rates, espe
-cially for those who live far away. Although
the distance between one’s home and work
-place may seem relatively close, factors such as increasing traffic can dramatically affect commute times and lead to dissatisfaction. Any miss-match between the employee and the company will never last and the best candidate is always the one most suited to the corporate culture.
Asia-Pacific Management Consulting, head
-quartered in Dusseldorf, has helped around
300 German companies (95% of their clien
-tele, the other 5% being Austrian and Swiss) to develop and carry out strategic plans for staff retention in a work environment with high turnover like in China.
Dr. Lin, President of the company, explained that Asia-Pacific Management Consulting currently generates around half of its reve
-nue from China operations, where demands for recruitment services seem relatively high. He explained that recruiting quality staff is difficult, but keeping them is even harder. Companies often absorb heavy costs related to flights and training, but after the first year, around 14% of staff leave the company. Three years down the road, the typical Chi
-nese office has only retained 10% of its ac
Using a case study example, Dr. Lin ex
-plained how one company effectively amended its staff retention rate from 40% to 0% for 8 years. This operation was undoubt
-edly expensive as it required the proper incentives; therefore, he more often recom
-mends altering the company’s staff retention rate by about 3-5%.
According to current studies, one-third of staff leave their company due to insufficient
pay. Not getting along with the supervi
-sor or manager makes up another third of unsatisfied staff, and a displeasing work environment drives away the other third. More specific reasons include lack of team-building, lack of training, non-transparent company info/rules/policies, the location is too far from home, there is a better chance
Hiring and Retaining the Right Employees
Foreign companies also tend to attract job-hoppers and people who are looking to build their resume. Therefore, an individ
-ual’s personality and loyalty must be a top condition for hiring. It takes a lot of effort to find the most suitable person, but this is the
stage that is most important for determining
whether the selected employees will remain in the company or not.
The hiring process is the next important step to ensure the employee will be retained. A
company must compare with how competi
-tors are handling bonuses, overtime and trav
-el costs. This can make a big difference when compared to a regular salary. Employees should know exactly what they are making so they never have to wonder or question. At the end of the presentation, the speaker sum
-marised his key messages and suggested a possible generic retention program.
Event: Taicang Workshop: Human
Resources – How to make sure your best talents and employees will stay at your company
Date: 11th June 2010
Speaker: Dr. rer. pol. K.-H. Lin | President
of Asia-Pacific Management Consulting GmbH in Dusseldorf, Germany
Chair: Mr. Sebastian Wegener | Regional
Manager Jiangsu & Zhejiang Province, German Chamber of Commerce in China