Beijing's High-Tech Ambitions: The Dangers of Germany's Dependence on China

SPIEGEL Online ^ | 08/27/2010 | SPIEGEL Staff

[wolf78]

Germany largely has China to thank for its current economic upswing, given the Asian powerhouse's demand for German machine tools and other such products. But many German industrialists are asking themselves how long the symbiotic relationship can go on, given Beijing's ambition to become a high-tech economy itself.

Germany, more than most other Western industrialized countries, is currently tying its economic well-being to China's recovery. Trade with Beijing is the most important driving force behind the current German upswing. It also explains why economists also foresee a bright future for the German economy in the medium term.

With its luxury cars, machine tools and power plant turbines, German industry offers precisely the products the giant East Asian country desperately wants or needs. But the jubilant mood at German industrial giants like Siemens and BASF has recently been somewhat marred by worried questions. What is the significance of the Chinese starting to compete in more and more high-tech markets? What will be the consequences if the fates of entire industrial sectors are decided in the back rooms of Beijing's party bureaucracy in the future?

And what happens if growth in China proves to be an illusion? The government in Beijing, using the tools of a state-controlled economy, is already trying to prevent the next big bubble from bursting in its real estate market.

"I am aware that a growing portion of the company is dependent on this country," says Dieter Zetsche, the CEO of German automaker Daimler. And that relation of dependency applies both in good times and in bad.

[wolf78]

[nkycincinnatikid]

They will steal the dummkopfs blind.

[Moltke]

I’m not sure whether it was Leica or Zeiss, but a good 100 years ago German optics engineers transferred a good deal of know-how to the Japanese...well, we all know how that turned out.

The motives of the Chinese today are so obviously similar that it boggles the mind anyone would fall for it. Short term profit for long term destruction? Yeah, now there’s a smart move...

[The Working Man]

Just remember that thwe Chinese only need “one” example of a product to duplicate it. And that goes double for machine tools.

Get the Machine tool once and then use it to make more copies.

U.S. Manufacturers have learned that lesson way to late.

[indthkr]

"But many German industrialists are asking themselves how long the symbiotic relationship can go on....."

It will go on until the chicoms have stolen everything they need to replace and/or counterfeit the products that generate cash flow for Germany.

[Will88]

But many German industrialists are asking themselves how long the symbiotic relationship can go on, given Beijing's ambition to become a high-tech economy itself.

We can be sure that Chines reverse engineers and assorted copy-catters and counterfeiters are busy reproduceing every machine tool and bit of technology they now purchase from Germany. And there are probably a good number Chinese industrial spies assigned to Germany in various official capacities.

[dennisw]

They will steal the dummkopfs blind.

The Chinese will steal any and all German technology and produce it cheaper. If Germans set up joint ventures in China (only joint ventures are allowed) the ChiComs will steal it even quicker. They are stealing from the Krauts because they have no more left to steal from the USA

[dennisw]

FROM THIS DER SPIEGEL ARTICLE

China is seeking to engage with the West, but on its own terms. German companies are beginning to feel the effects of this policy. For instance, they note with concern that there is a growing tendency among the Chinese to blatantly demand the divulgence of industrial know-how in return for the right to do business in China. And it irritates them that China is treating traditional German industrial domains as strategic business fields.

And some Asia experts even predict that Germany's China connection could trigger the long-term demise of many icons of German industry. They warn that German companies that accept China's embrace could quickly find themselves being squeezed too tightly for their own good.

Risky Symbiosis The contradictions have even crept into the rhetoric of corporate leaders. When German senior executives are in Beijing or Shanghai, they have nothing but glowing praise for the country. But the minute they return to Munich or Düsseldorf, they complain about industrial espionage and instruct their personnel departments to avoid hiring Chinese interns at all costs.

[Flag_This]

One day people will look back in wonder at the breath-taking stupidity of the West.

[conservative cat]

they complain about industrial espionage and instruct their personnel departments to avoid hiring Chinese interns at all costs.

This would never happen in an American company. We hire from all over the world, regardless of the industry. The Chinese may be stealing what they can from the Germans and reverse engineering, but the Germans are also far less politically correct than the Americans, especially in business. They will protect themselves, much more than the we did. They will still lose out, but not as fast.

[wolf78]

I’m not sure whether it was Leica or Zeiss, but a good 100 years ago German optics engineers transferred a good deal of know-how to the Japanese...well, we all know how that turned out.

Interestingly enough, today Panasonic uses Leica lenses and Sony's are made by Carl Zeiss.

[Moltke]

True enough (my Korean LG mobile phone has a Schneider Kreuznach lens), but it’s a small market share over all. Same with home entertainment electronics (Grundig et al.).