ARRIVING in Shanghai a little more than one year ago, Jan Noether, chief representative of the Delegation of German Industry and Commerce (AHK) in Shanghai, has been deeply impressed by the racing pulse of the city.

"Shanghai is inspiring, buzzing and very dynamic," Noether told Shanghai Daily in an exclusive interview while sitting in his elegant office in the center of the Pudong New Area. "Shanghai sets its own pace and never sleeps."

At the helm of the Delegation of German Industry and Commerce in Shanghai, Noether and his team play a key role in matching the interests of investors and traders of the two countries.

The global AHK network has been promoting the interests of German companies worldwide for more than 100 years, with 125 offices in more than 80 countries today. Together with the Consulate General of Germany in Shanghai and two additional representatives of the German Chamber of Commerce, the German Industry and Commerce and the Germany Trade & Invest, the AHK has performed this role in Shanghai for many years. There are two additional offices on the Chinese mainland, one in Beijing and the other in Guangzhou, Guangdong Province.

"As a result of many German investors in and around Shanghai, the AHK Shanghai office grew its operations over time and now is among the biggest on a global basis," Noether explained. "China continues to play a key role in terms of future strategies of German companies. We will continue to strengthen our operations to, at all times, meet the demand of our corporate clients."

More than 1,300 of around 5,500 German companies in China have a close link to the German Chamber network in Shanghai, Noether said. Among them, there are global players as well as a substantial number of mid-sized and smaller entities, which form the backbone of German's economy. According to a recent survey conducted by the Association of German Chambers of Industry and Commerce in Berlin, Germany is expected to export products and services worth 85 billion euros (US$115 billion) to China in 2012, exceeding exports to the US and making China the largest sales market outside the European Union.

But that is not enough and should not be a reason for the AHKs in China to be satisfied, Noether said.

With Shanghai having successfully hosted the World Expo last year with the theme "Better City, Better Life," Noether discovered that there is much more to be done to strengthen business cooperation between the two countries.

"Germany is well-known for its leadership in urban practices and innovation, and China has a strong ambition to explore these areas as reflected in the 12th Five-Year Plan (2011-2015)," Noether said. "By identifying and combining our innovative strengths, we can create unimaginable power to make this world a better place for living and working. We owe this to our children."

Many global players from Germany are well established in China and hold the contacts and the means to service the requirements of the Chinese market. Now it's time for the so-called hidden champions of Germany to gain recognition in the world's fastest growing economy. The AHK directs a substantial portion of its capacities to offering its assistance to German companies that plan to enter China, or those that are in a transitional phase, Noether commented.

This is why he frequently travels between Germany and China, within China and around Asia. "At the end of the day," Noether suggests, "the efforts will contribute to strengthening the economic relationships between both countries."



Shanghai Daily: AHK in Shanghai plays an active role in promoting bilateral economic relations between Germany and China. Can you introduce some of your recent events?

Noether: The German Chamber offers a variety of workshops to keep its members informed on regulatory adjustments, to discuss matters of common concerns, to assist with the various training activities of its members, to help Chinese talent find attractive jobs in German companies or to act as a networking platform for the German community, to just name a few. For instance, we recently conducted a job fair with our partners of the German Center, which attracted around 1,500 Chinese talents to offer their services to more than 50 German companies looking to fill over 400 open slots. In Germany, the overwhelming interest of German companies in China is evidenced by countless events to be organized by the German Chamber Network. As often as possible representatives of the AHK network are present to discuss individual projects with company representatives or to run presentations on the current Chinese economic environment.

The feedback gathered in Germany matches the results of a recent survey of the German Chamber in China: German investors are keenly looking into the prosperous Chinese market, and many are planning additional investments to better suit the needs of their Chinese consumers. While Shanghai has been identified as the No. 1 destination of German investment due to the flexible and very professional assistance of the Shanghai government, which is moreover due to its impressive economic infrastructure and the still satisfactory access to a talented workforce, the so-called tier-two cities have recently gained importance.



Shanghai Daily: Germany is well advanced in technology, a domain that China clearly wants to improve. Is there any new partnership between the two countries in high technology?

Noether: We have to meet many common global challenges such as climate change, growing urbanization, the question of mobility, the ageing population and various others. Many German and Chinese companies have access to key competencies, which may contribute to mitigating or even solving some of the so-called Mega topics. As already proven in many common projects, be it in electric mobility, in the fields of renewable energy or in state-of-the-art mobility solutions, German companies are open for partnerships to tackle such issues or other challenges.



Shanghai Daily: Small and medium-sized enterprises are vibrant in Germany and they are important sources of growth for the country. What is the secret of keeping them alive during difficult economic times?

Noether: Many German SMEs are so called "hidden champions." They are world leaders in market niches although very few people know their names. Due to such businesses very often being run by families and handed over from generation to generation, there is the ability to preserve knowledge and experiences, which are crucial to long-term business success. In relation to their turnover these companies invest a lot of financial means and other resources in research and development and finally, the SMEs have the ability to react with great speed and flexibility to changing market environments. Such SMEs of Germany are now increasingly interested in entering the Chinese market to offer their products and solutions to a growing number of Chinese business partners and to the public. Allow me to put emphasis on the idea that German SMEs are very reliable business partners.



Shanghai Daily: How do you evaluate China's current climate for foreign investors, as well as China's growing outbound foreign investment?

Noether: China plays a vital role in the global economy, foreign companies irrespective of size are well aware of it. The German corporate sector rates China No. 1 in terms of investment destinations, even superior to its key market, Europe. This is very much due to China's economic strength, its predictable future and the efforts of the Chinese government to further integrate China into the world's economic policies and regulations. Whereas related guidelines are visibly improving, we look forward to further adjustments in the fields of market access, the protection of intellectual property rights and the mitigation of legal uncertainties. The Chinese investment in Germany is by far more visible compared to 10 years ago. According to the company Germany Trade and Invest, which is an entity of the German Ministry of Economics and Technology, China is the currently most active country according to investment enquiries in Germany. We may follow the idea that Chinese investment in Germany is still in its infant stage and lots of cultural bridges need to be crossed before a common understanding and a cementation of common business ethics can be achieved. Chinese companies value Germany as an investment destination due to its central location in Europe and following the idea that German partners are reliable and follow long-term strategies.