China official partner as Hanover Fair opens | Business| Economy and finance news from a German perspective | DW | 23.04.2012
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China official partner as Hanover Fair opens

The Hanover Messe, the world's largest industrial fair kicked off on Sunday. This year's official partner is China. German companies are focusing both on cooperation and competition with the world's emerging giant.

Chinese Premier Wen Jiabao and German Chancellor Angela Merkel on Sunday evening opened the Hanover trade fair. As this year's official partner country, China was giving "the utmost attention" to it, said Li Nianping of the Chinese embassy in Berlin. "We hope that it will further our already strong and pragmatic cooperation," he said.

Around half of the 5,000 participating companies this year are from abroad. They use the fair to showcase their products and services to an international audience and to make contacts and expand their networks. "We hope that we'll find new partners," Li said. Already today, some 30 percent of Chinese trade with the EU is actually conducted with Germany.

Wen Jiabao and Angela Merkel

Merkel and Jiabao opened the Hanover fair on Sunday evening

German companies are equally interested in new contacts and partners. Engineering companies are at the heart of Germany's economy and highly dependent on strong exports.

While European countries remain the biggest market for Germany, the economic and financial crisis is beginning to bite. Orders are currently on the decline. The biggest growth opportunities are therefore thought to be in emerging economies, like China, India and Brazil.

Partnerland China

China as the partner country in Hanover has almost 500 companies present at the fair – the biggest showcase of Chinese manufacturing and engineering outside of China so far. According to Li, some 230 Chinese managers and experts are to join the German-Chinese economic summit taking place on Monday.

The cooperation between Germany and China has long been perceived as simply German companies outsourcing their production to China to profit from cheaper manufacturing costs. But the cooperation and exchange has become more complex. Last year alone, some 158 projects saw Chinese companies investing in Germany, said diplomat Li. "This cooperation can be expanded both ways."

This year's fair has a particular focus on green technology. "In this field, Germany is ahead in terms of technical expertise, but China has a huge market to offer," Li said.

Machinery on display at the fair

German engineering companies are looking to China as their main future market

From cooperation to competition

Yet this approach also holds a danger for Germany companies: Should they lose their head-start, they could easily lose out. German solar energy companies are a warning signal. In recent months, four large companies have gone bankrupt, including Q-Cells, which once was the world's largest producer of solar panels. Once Chinese companies master German technology, they most likely can offer the same products significantly cheaper.

The focus on green technology in Hanover, however, includes more than just renewable energy. "Greentelligence" is the slogan that the fair has adopted for the topic: Efficiency, resource-friendly use of production material and concepts for sustainable production are key, says Wolfram von Fritsch, chairman of the organizer Deutsche Messe AG. Love for nature is by no means the only motivation here. "It's only this combination that can ensure German companies will remain competitive in the long run," Fritsch told DW.

The Hanover fair will also look at Berlin's planned nuclear phase-out. Countries, like Belgium and Switzerland, also eye a future without a reliance on nuclear energy. "In the wake of Fukushima, we've seen a boost of innovation," Fritsch said, adding that the fair would also offer a glimpse into the future. "At Hanover, companies show what already can be done and what is on the verge of being introduced to the market – in all sectors of the industry."

Author: Andreas Becker / ai
Editor: Gregg Benzow

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