Further Regional Expansion and Strengthening Ties with ... · PDF fileWhen it comes to regional variation within China, ... sor, Institute of Policy ... The theme of our event „Chances

The German Chamber of Commerce in China

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The first meeting of the board of directors of the German Chamber of Commerce in China in 2009 took place on 12th February at the brand new Swissôtel Foshan. As was decided during a previous meeting, the All-China board had changed its constitution. Besides the Executive Direc-tors from the chambers, the three Chairmen Mr. Michael Stein (Trolli Confectionery, GCC • Guangzhou), Dr. Richard Hausmann (Siemens China Ltd., GCC • Beijing) and Mr. Arved von zur Mühlen (Luft-hansa German Airlines, GCC • Shanghai) represented the interests of the member companies. The GCC All-China Board meets twice a year to discuss how to better re-present, promote, integrate and protect the interests of the German Chamber and its members in China. Another objective of the meeting is to strengthen ties with local authorities in the city or region, where it is being held.

In Foshan the board members discussed several topics relat-ing to the structure of the chamber and the develop-ment of memberships. Due to the ongoing expansion of many German companies

into the Chinese regions and further away from the GCC offices in Beijing, Guangzhou and Shanghai, all three chambers are extending their activities geographically. While the GCC • Beijing has recently strengthened its presence by opening an office in Tianjin, the GCC • Shanghai offers its services already in Taicang, Suzhou, Hangzhou and Ningbo. With the opening of an office in Shenzhen in April, the GCC • Guangzhou reacts to the growing presence of German companies in this Special Economic Zone close to the Hong Kong border.

Besides regional confer-ences, seminars, and roundtables there were two outstanding events to discuss. Under the lead of Executive Director Mr. Manfred Rothgänger, the GCC • Shanghai was on the point of final

preparations for the Greater China Day, successfully held on 12th March in Hanover. Ms. Alexandra Voss, Executive Director of the GCC • Guang-zhou, looked back to the third station of the event series ‘Germany and China – Moving Ahead Together’ in November 2008, where the GCC • Guangzhou contributed four successful events. The GCC • Beijing, represented by Executive Director Ms. Jutta Ludwig, is already involved in advisory and preparatory work for the next station of series, which will be held in the city of Shenyang in June.

Sticking to its traditions, the board meeting was framed by meetings with representatives of German companies and the local government. At a busi-ness breakfast, senior representatives from Osram, Caterpillar, ARC Pacific and Kautex informed the board members about their specific working and investment conditions and business opportunities in Foshan. All partici-pants contributed helpful suggestions for improvement.

The board gathered this information for the following meeting with Mr. Xian Ruilun, Executive Vice-Mayor of Foshan. Mr. Xian and other representatives of Foshan Municipal People’s Government warmly welcomed the board members and informed them about the city’s eco-nomic and overall situation. The government also encourages German companies to expand their investments in the region and assured the board of its full support to the German Chamber’s member companies. The authorities are already looking forward to hosting the 3rd Chinese-German Environmental Forum in June, which will be opened by German Minister of Environment, Mr. Sigmar Gabriel. A vivid discussion then developed on the current economic crisis, its impact on Foshan and the measures to be taken by authorities.

Vice Mayor Xian expressed his best wishes for the new year and honored the board by presenting it with the sculpture of a red ox. Mr. Michael Stein, chairman of the board, reassured the city officials of the board’s continuous commitment to a strengthened cooperation with the local authorities. When handing over two bottles of German wine to the Executive Vice Mayor, he reminded him to save one of them for the next occasion when they would meet to extend their good cooperation.

Further Regional Expansion and Strengthening Ties with AuthoritiesAll-China Board Meeting of the German Chamber of Commerce in Foshan

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All China - Chamber Events

China is Catching Up in Terms of InnovationSpecial Seminar: Beijing, Guangzhou, Shanghai

At a series of events held by GCC in Beijing, Guangzhou and Shanghai, Dr. Henning Kroll and Rainer Frietsch from the Fraunhofer Institute for Systems and Innovation Research (ISI) in Karlsruhe, presented fascinating insights into the increasing efficiency of China’s research and development sector and the regional differences in its progress. They were joined by Prof. Ulrike Tagscherer from the Chinese Academy of Sciences in Beijing.

R&D is on a steep rise in China in terms of spending, innovation and publications. While spending as a percentage of GDP is still low compared to Germany or the United States, China will soon approach the EU average. More and more of Chinese R&D is the result of private, rather than government spending. The number of published articles has increased sharply, with Chinese experts frequently cited in such areas as organic chemistry, polymers or material science. Patents from China are showing a particularly strong hike, whereas new Japanese applications are in decline and registered innovations from Europe and the US are increasing moder-ately.

The effects of these indicators on the economy are noteworthy. Although goods with no or little R&D input still account for nearly 50% of Chinese exports, the share of cutting-edge technology has already risen to more than one fourth of Chinese exports. Quality is also on the increase. China’s R&D has begun to develop patents to a world standard inde-pendently. There is a flood both of inno-vation and of design and utility patents. Overall, China has already surpassed

technology leaders like Canada, Sweden, Finland, Switzerland and the Netherlands.

When it comes to regional variation within China, most academic and techno-logical activities are still concentrated in a few cities and coastal provinces. Aside from the traditional research centers in Beijing, the Bohai Region, Xian and Shanghai, significant clusters of know-ledge and development have settled in the Yangtze and Pearl River Deltas and such provinces as Shaanxi, Sichuan and Liaoning.

The expert panel agreed that China is becoming more of an innovation com-petitor for the likes of Germany and other exporting nations, but it is interesting to note that Chinese and German strengths are largely discrete, and thus complemen-tary. The potential for Germany and China to become important partners in research as well as economic development is undi-minished.

Topic: Chinas Innovationssystem auf dem Prüfstand – internationaler Vergleich und regionale VariationDates: February 2009 in Beijing (16th), Guangzhou (17th) and Shanghai (18th) Speakers: Rainer Frietsch | Deputy Head of Competence Center Politics and Regions; Dr. Henning Kroll | Project Leader, both Fraunhofer ISI, Karlsruhe; Dr. Ulrike Tagscherer | Associate Profes-sor, Institute of Policy and Management, Chinese Academy of Sciences in BeijingChair: Dr. Matthias Hack | First Counsellor Science and Technology, German Embassy Beijing.


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What has already become a well-established tradition, the Greater China Day has been organized by the GCC China again in March, this year in cooperation with the Chamber of Industry and Commerce (IHK) Hanover. A full report of the event will follow in the next issue of GC Ticker Magazine. Before his departure to Hanover, Mr. Manfred Rothgänger, Executive Director of GCC • Shanghai, the coordinat-ing chamber of the event, explained why the Hanover forum is more topical than ever before.

The Greater China Day takes place during turbulent times. What does it make so necessary to discuss the opportunities of business in China these days?It remains to be seen how strongly the current crisis will affect the Chinese economy, but it is expected that the cost-saving pressures exerted on manufacturers these days will bring another wave of outsourcing deals to China. The theme of our event „Chances in the Crisis” could therefore not be any more appropriate.

Where do you see the attractiveness of the Chinese market today?The last edition of our annual business confidence survey showed that 60% of respondents expect China to suffer less severely from the financial crisis than most other countries. As a matter of fact the 460bln Euro stimulus package of the Chinese government will open new business opportunities for some German companies, especially in the infrastructure segment.

The operating environment in China has improved a lot, so that it has become relatively easy today to start up a business. Stockholders clearly enjoy more information rights, the credit market has become more transparent and the protection of private property is anchored in law.

In spite of all these positive trends, some foreign companies are considering withdrawing from the Chinese market, others have already left. Is this a sensible strategy?Certainly not! The most commonly stated reason of German investors

for setting up their own production here is the huge potential of the Chinese domestic market. Thanks to economic reform policies a sizeable middle class has emerged, especially in the cities. The purchasing power, life style and consumption habits of these households are becoming comparable to those in some western markets.

The German presence in China is also far from being fully developed yet: Only one percent of the current German FDI outflow is directed at China. Just three percent of all German exports go to the former Middle Kingdom. In view of this, German enterprises should position themselves pro-actively as long-term partners in China in order to come out of the economic crisis stronger and more competitive than before.

China has recently stepped up its efforts to attract more high-tech investments and to diversify from a pure low-cost production. What does this mean for German companies operating in China and what further measures are needed?Already now German companies make important contributions to the development of society and the technological and environmental situ-ation in China. German investors are responsible corporate players in their fields. Very often the working conditions, security and social pro-grams for workers in these factories are far above the local minimum requirements. Same goes for environmental standards.

Business-friendly strategies aimed at supporting research, develop-ment and innovation have to be further fostered in China, but also in Germany, to bring more high-tech industries to China. This has to be secured by national and international public institutions, which protect innovations. To create an attractive environment, where innovative industries can research and develop more solutions in this market, non-tariff business barriers between China and Germany must also be further diminished.

“Chances in the Crisis” - Annual Spring Assessment of China in GermanyGreater China Day in Hanover, 12th March 2009

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Beijing - Chamber Events

In the beautiful setting of the Imperial Granary, numerous high ranking Chinese guests of honor, German Ambassador Dr. Michael Schaefer, the Board of the GCC • Beijing with its Chairman Dr. Richard Hausmann, and the leadership of a selection of member companies celebrated the New Year, both according to the Gregorian and the Chinese calendar. As Dr. Hausmann commented, he hoped the Year of the Golden Bull would turn the markets bullish.

It was an evening of many notable successes. In his keynote, Ambas-sador Schaefer praised the work of the Chamber and its Executive Director, Jutta Ludwig, he highlighted the very successful visit of Premier Wen Jiabao to Germany in January. Schaefer also noted the promising path of integration China was taking to become part of the global society and assume its natural role therein. In his closing he recapped the success of the ‘Germany and China: moving ahead together’ event series, which had begun in Nanjing in 2007 and passes through Shen-yang and Wuhan this year on its path to the Shanghai Expo in 2010. The upcoming forum on ecological industrial policy in Shenyang, in June, with German Minister of the Environment, Nature Conservation and Nuclear Safety, Sigmar Gabriel, and the Governor of Liaoning Pro-vince, will be particularly important.

Success also came in the area of social responsibility, when Dr. Haus-mann and Ms. Ludwig presented the net profits from last year’s German Ball – RMB 60,000 – to Ms. Zheng Wei of the Amity Foundation. This Chinese Christian NGO is focusing on education, rural development, healthcare, social welfare, blindness prevention and disaster relief and rehabilitation, particularly for children. In 2007, the organization spent more than RMB 83mn on diverse projects. The GCC • Beijing’s funds have been earmarked to take care of 30 children for a number of years. And, Jutta Ludwig handed over a RMB 6,000 contribution of proceeds from the sale of the ginger bread houses made by GCC • Beijing at last year’s annual German Embassy Christmas Charity Bazaar. The creation and sale of the houses has become a tradition for the Chamber, while the Christmas Charity Bazaar is an annual Embassy highlight. Lead by Birgit Baur-Gallizioli, the Bazaar had generated more than RMB 620,000 last December, with over two thirds thereof already disbursed to seven charitable organizations this year.

Success was also projected for German-Chinese cooperation in master-ing the global economic crisis and for developing a joint approach to the restructuring of the world’s financial system. A coordinated tackling of global problems like carbon emissions, air and water pol-lution, rapid urbanization and securing of healthcare will be further points on the Sino-German agenda towards success. Both nations

stand together in their firm opposition to protectionist tariffs. In his speech, Dr. Hausmann mentioned the purchasing delegation that had left China for Germany on the day of the reception under the leader-ship of Chinese Minister of Commerce Chen Deming. [It added more than 30 contracts to the eleven inked during Premier Wen’s Berlin visit. – ED] Ambassador Schaefer called the delegation a sign that China was actively helping to provide solutions to the crisis, that it stood against protectionism, and that Germany was China’s preferred partner in Europe for cooperation on economic issues. Dr. Hausmann also welcomed the delegation, although he commented tongue-in-cheek (and as the CEO of Siemens Ltd. China) that Chinese companies and government agencies could purchase German products right here in China, without having to make such a long trip.

Among the many projects that the Chamber is actively supporting this year, Hausmann accentuated ‘Germany and China’ and Econet, a German environmental initiative started in China under the patronage of the German Ministry of Economics. His New Year’s wish for 2009, he said, was that the excellent relations between China and Germany would remain exactly as they were. If this was the case, 2009 would become a year of many opportunities.

The beautiful Imperial Granary buffet, German wine from Baden pro-vided by the Heidelberger Weinkontor and the Jazz band’s swing put everyone in a good mood and furthered the conversation.

Topic: New Year’s Reception 2009Date: 25th February 2009Speakers: Dr. Michael Schaefer| Ambassador of Germany in China; Dr. Richard Hausmann | Chairman, GCC • Beijing, and CEO, Siemens Ltd. China

German-Chinese Relations Better than EverNew Year’s Reception 2009


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Network throughout 2009 with Beijing Board MembersKammerstammtisch

Throughout the year, at least one Board Member of the GCC • Beijing will be in attendance at every Kam-merstammtisch to facilitate network-ing. A schedule of who will attend will be published in advance. Please consult our website for up-to-date details.

Guest at the February edition of the Kammerstammtisch was Board Member Mr. Eddy Henning, Direc-tor and Head of Corporate Banking at Deutsche Bank (China) Co. Ltd. Attendees stayed late and enjoyed a lively discussion on the global finan-cial situation, travel tips, the merits of Currywurst versus other perennial favorites of German cuisine and pros-pects for German business in China in the Year of the Golden Ox.

Topic: KammerstammtischDate: Every third Monday of each month, 7pm at Paulaner Bräuhaus, Lufthansa Center

Next Stop ShenyangChamber Dinner: Germany and China - Moving Ahead Together

The next stop of “Germany and China - Moving ahead together”, the most wide-ranging event series ever initiated by Germany abroad, will take place in the North Chinese city of Shenyang in June 2009. This series of programs, which began in Nanjing in October 2007, aims to enhance the local Chinese understanding of German science and tech-nology, environmental protection, design, education, culture, indus-try and commerce, and to further develop the bilateral relationship between the two nations. More than 200,000 visitors made the kick-off event in Nanjing a great success.

The event in Shenyang is an excellent opportunity for the companies on-site to position themselves as innovative and attractive part-ners. Mr. Michael Kahn-Ackermann, Director of the Goethe-Institut in Beijing and project director for the Germany and China initiative, explained the goals of the campaign at a Chamber Dinner in Shenyang and demonstrated how German companies could participate mean-ingfully and profitably. Dr. Florian Keßler of GCC • Beijing added his summary of recent legal developments in China.

Topic: Chamber Dinner “Germany and China – Moving Ahead Together”Date: 19th January 2009Speakers: Dr. Michael Schaefer | Ambassador of Germany in China; Mr. Michael Kahn-Ackermann | Director, Goethe-Institut Peking; Dr. Florian Keßler | Head of the Legal and Business Departments, GCC • BeijingChair: Ms. Jutta Ludwig | Executive Director, GCC • Beijing

A Bit of Romance for the Next GenerationPraktikantenstammtisch

The regular Praktikantenstammtisch is a networking opportunity, orga-nized by GCC • Beijing for young professionals and interns that takes place at changing locations around Beijing. Please consult our website for up-to-date details.

In February the romantic surroundings of Club Obiwan in Beijing’s Xicheng District played host to the popular event.

Topic: PraktikantenstammtischDate: Every second Tuesday of each month, 7pm

Chinese Purchasers Interested in German Energy EfficiencyPurchasing Delegation to Germany

“Is it possible to control the air’s humidity with the heating system you just presented to us?” was one of the questions raised by the rep-resentatives from Beijing, adding that they would like it to be more humid. “No, no, we need it to be drier”, was the immediate reaction from a South Chinese official in the delegation. To offer solutions to such questions and to a lot of other energy related challenges in the Chinese construction sector, the GCC • Beijing organized a purchasing trip to Germany in January titled “Energy Efficiency in Buildings” and financed by the Federal Ministry of Economics.

During this tour, German companies introduced their products and service solutions to guests from China. They covered improvements in buildings’ energy efficiency, including external thermal insulation composite systems (ETICS), heating systems featuring low energy consumption, and methods to analyze the energy efficiency of build-ings. The main goal was to build relations with Chinese clients and to strengthen economic ties in this sector between the two countries.

The 18 representatives from different Chinese companies, research institutes and governmental organizations visited the open-air test grounds of the Fraunhofer Institute for Building Physics to attend a seminar with diverse speakers. After a very successful match-making event at the Chamber of Commerce in Munich, a visit to the BAU trade fair with almost 2,000 international exhibitors from the construction sector completed the tour.

The Chinese delegates participated very actively in the seminars and presentations and received answers from different perspectives to their very specific questions, including the one about influencing the discharged air’s humidity. “That can easily be done”, was the speaker’s reply.

Topic: Chinese purchasing delegation to Germany focusing on energy efficiencyDate: Late January 2009Organizer: GCC • Beijing in cooperation with the German Ministry of the Environment, Nature Conservation and Nuclear Safety and the Chinese Ministry of Construction

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2008 Data on Localization and Expat Pay ReleasedStudy Results Presentation

Socializing Season Opens in Tianjin and TEDAInter-Chamber Networking

The first Tianjin Business Net-working organized by the GCC • Tianjin, in cooperation with the Tianjin Networking Club, the Tianjin Expats Website, Swiss-Cham, BenCham and AmCham, was held in January at the Nikko Hotel in the city’s center. It was a great success with more than 130 attendees, who obviously enjoyed each other’s company.

For the second “Tianjin Biz Socializer” in February the Tianjin Economic Develop-ment Area (TEDA) and the German Business Circle Tianjin also joined as co-organizers. This time the event was held at TEDA and the TEDA government provided a complimentary shuttle bus to take attendees from the Tianjin Train Station to the venue and back. Participants brought along so many friends, colleagues and business associates that close to 180 were present this time. The networking seems to have been so successful that some participants missed their return shuttle to Tianjin and had to spend the night at TEDA.

Topic: Tianjin Business NetworkingDates: 13th January and 17th February 2009Organizers: GCC • Tianjin, Tianjin Networking Club, Tianjin Expats Website, SwissCham, AmCham, German Business Circle Tianjin, TEDA Government

Optimize Your Logistics in Times of CrisisTianjin Chamber Dinner

Winning new business and driving up sales means serving more customers over greater geographic areas and across more suppliers. Especially in times of crisis, it is crucial to optimize logistics services, thereby reducing costs and saving resources.

Mr. Dieter Buchinger, the managing director of Militzer & Münch China Group, discussed the positive effects that improved supply chain man-agement and outsourcing can have on a business at a recent GCC • Tianjin event. He has been with M & M International for 20 years, ten of which he spent in China. The company started out in China as early as 1981 with a representative office in Beijing, expanding to Tianjin in 1994 as one of the first international freight forwarders.

Customs issues were also a topic. Mr. Damon Paling, a partner at PricewaterhouseCoopers, provided an overview of key changes in 2008 as well as the outlook for 2009. The new rule on advance manifests for inbound and outbound goods movement which took effect on 1st January 2009, is set to increase industry costs while speeding process-ing. Other briefing topics were on how to ensure customs compliance, adding value in the customs space during a time of economic crisis, and resolving customs audits and investigations. Mr. Paling has twelve years of experience in Asia advising companies on their customs, trade and related supply-chain and logistics matters.

Topic: Chamber Dinner Distribution Logistics and CustomsDate: 24th February 2009Speakers: Mr. Dieter Buchinger | Managing Director, M&M Interna-tional; Mr. Damon Paling | Partner, PricewaterhouseCoopersChair: Ms. Claudia Barkowsky | Regional Manager North China, GCC • Beijing

What are the major shifts around expa-triate demographics in China? How is the expatriate pay landscape evolv-ing? With the increase in local hires in China, how do their packages compare to traditional expats? What perks are remaining and which are being cut? What is the general market reac-tion in China to the global economic downturn? These and other questions were discussed and coverer in a recent study, that was presented at the GCC • Beijing office.

With more than 170 companies participating in Hewitt’s 2008 Expatri-ate Study, understanding of the current expatriate pay landscape has become better than ever. The study covered 300+ positions, including Asia-Pacific regional roles, and looked at the great diversity in expat reward packages while covering all major benefit items, from housing and children’s education to tax assistance and transportation cover-

age. The annual study builds on eight years of data, making it one of the longest running in China. Expat categories covered were Westerners, Asians, China-hired foreign-ers, Hong Kongese/Singaporeans, Taiwanese and Chinese returnees. The survey also provided detailed benchmarks for education, insurance and housing expenses among others. Particular emphasis was given this year to localization, PRC returnees and ‘China hires’. To offer a fair comparison, compensatory trends for Chinese being sent overseas were also examined.

And what about the answers to some of the questions raised above? Expat demographics: Fewer Taiwanese and more local hires. Expat pay: Still up. Local hire packages: Lower than expat packages, but tending upward. Perks being cut: Varies widely by company.

Topic: 2008 Hewitt Compensation and Benefits StudyDate: 21st January 2009Speaker: Ms. Susan Derkach | Senior Talent and Organization Consul-tant, Hewitt Associates Beijing

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Managing China Customs in 2009Logistics Roundtable Dinner

Mr. Xu Wei, the director of the Customs Administration Department at the University of International Business and Economics, gave a detailed speech at a Chamber Dinner in January. Topic of his presentation was the new Advance Manifest Rule, which requires logistics firms to provide more information farther in advance to Customs on both inbound and outbound movements, and which extends the filing requirement to air, road, rail and sea shipments. Quicker Customs processing is the goal but logistics providers were concerned about higher costs. A lively discus-sion among company representatives ensued.

Mr. Kong Fei, Marketing Director at Beijing Orientsun Commercial Con-sulting Company and a member of the China Customs Broker Associa-tion (CCBA), who specializes in bonded warehouses, introduced the new Customs Website in English and extolled its completeness, clarity and general information content. He urged logistics suppliers and the logistics departments of other companies to monitor this online platform regularly.

Dr. Ingo Karsten from the German Embassy gave his ‘Report from the Embassy’ and Executive Director Jutta Ludwig of GCC • Beijing con-cluded with her ‘Briefing from the Chamber’. The German Chamber’s Logistics Roundtable is an informal meeting for representatives of the logistics industry in Beijing and German companies who are interested in logistics solutions. The meeting’s target is to establish a platform for exchanging experiences and information relevant to the field of transportation in Beijing.

Topic: Managing China Customs in 2009 - New Advance Manifest Rule Date: 20th January 2009Speakers: Mr. Kong Fei | Marketing Director, Beijing Orientsun Com-mercial Consulting Company; Mr. Xu Wei | Director, University of Inter-national Business and Economics, Customs Administration Department and a consultant in practical customs operationsChair: Ms. Jutta Ludwig | Executive Director, GCC • Beijing


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cooperation, the private sector should adopt this approach as well. And how can business ties be better strengthened than during a reception and an open discussion between politicians and business representatives?

This just happened at Wilber’s Bar & Restaurant in Guangzhou, where Dr. Ingo Karsten, Minister of Economic affairs at the German Embassy in Beijing, hosted a reception that was jointly orga-nized by the Consulate General and the GCC • Guangzhou. In his welcoming remarks, Dr. Karsten stressed the importance of the Sino-German relationship and highlighted the successful visit of Chinese Premier Wen Jiabao in Berlin in this context. After his speech, Dr. Karsten, who assumed his present post in Beijing in August 2008, had the opportu-nity to talk to representatives of chamber member companies and learn about their needs as well as their achievements. Future perspectives for German companies in China were at the heart of the discussion. Over finger food and beer the around 60 participants had serious talks as well as heated discus-sions in an open and inspiring atmosphere.

Prior to this reception, Dr. Karsten had visited the special economic zone Shenzhen, where he had met with representatives of Huawei to talk about business cooperation opportunities. The delegation was accompanied by the Deputy Consul-General of Germany in Guangzhou, Mr. Christian Rumplecker, and by Ms. Alexandra Voss, Executive Direc-tor of the GCC • Guangzhou.

Topic: Reception with Dr. Ingo Karsten, Minister, Head of Economic Department, German Embassy, BeijingDate: 5th February 2009

Chamber Events - Guangzhou

In times of economic difficulties and uncer-tain markets, strong relationships between solid partners are exceedingly important. The visit of Chinese Premier Wen Jiabao in Berlin at the end of January aimed to strengthen and promote the Sino-German ties. Now that policymakers have made clear that the finan-cial crisis can only be surmounted with strong

The raising of environmental standards and an emphasis on green technology has opened up many opportunities in China. Focusing on recent market developments and the German Industry and Commerce’s

Standards and Labeling in Green Building

Let’s Talk about Business!Reception with Dr. Ingo Karsten

econet China program, speaker Jens Hildebrandt gave a brief introduc-tion to this developing industry. Mr. Piers Carlson from Bureau Veritas followed by providing new insights on standards and the potential of green building in China. Using the example of the Leadership in Energy and Environmental Design (LEED) label, Mr. Carlson discussed some pros and cons of such labels and their applicability in China. Although there is large potential for improved environmental stan-dards and some positive developments have already been made in the past, it still remains to be seen whether the environment will take a back seat as the economy tries to pick up steam again.

Topic: Green Building StandardsDate: 19th January 2009Speaker: Mr. Piers Carlson | Project Engineer for Building & Facilities Dept., LEED AP, Bureau Veritas

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Insights for a Successful IPR Strategy

In cooperation with Rouse & Co. International, the GCC • Guangzhou together with the French Chamber hosted a half-day seminar on Intel-lectual Property Rights. Consultants Ms. Audrey Boisselet and Ms. Zoe Liu presented key insights to help companies with their IPR strategy. Through practical examples the two experts pointed out regular mis-takes and how to apply enforcement tools. Case studies dealing with trademark counterfeiting, patent and copyright issues illustrated the different fields of infringement. Remaining a bit skeptic about the chances of success when taking legal action in IP infringement cases, the participants openly discussed ways of how to protect their ideas and reduce counterfeiting.

Topic: Protection and Enforcement Tools of Intellectual Property Rights in ChinaDate: 15th January 2009Speakers: Ms. Audrey Boisselet and Ms. Zoe Liu | IP Consultants, Rouse & Co. International

Seeing Recession as an OpportunityWorsening of economic prospects, company closures and large-scale layoffs - the recession is hitting companies all over the world. How to survive in times like these? In cooperation with Stephenson Harwood & Lo (SHL), the GCC • Guangzhou hosted a seminar to discuss ways on how to handle the economic crisis.

SHL Chief Operating Officer Mr. Ariez Vachha provided helpful advice for managers as well as employees on how to deal with the situation. He stressed that communication in times of eco-nomic turmoil is even more crucial - especially between a manager and his staff. Among his many

practical tips was also some advice on how to lower the company’s costs and negotiate some extra discounts. Even though everyone was acknowledging today’s economically challenging environment, the audience and the speaker agreed: The recession can also be an oppor-tunity - with the right operations you can come out even stronger. During a reception following the seminar, the participants were able to develop individual strategies with the expert.

Topic: Seminar - Surviving and Thriving in a DownturnDate: 18th February 2009Speaker: Mr. Ariez Vachha | COO, Stephenson Harwood & Lo


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Painting the Sino-German Picture for 2009Chamber Meeting January

Education FairA fair with news and presentations from the educational sector was preceding the Chamber Meeting. Among the twelve exhibi-tors were institutions like the German Academic Exchange Service (DAAD), the Chinese-German College of Tongji University and the Friedrich-Ebert-Foundation Shanghai.

A record number of over 260 chamber members and guests gathered at the first GCC • Shanghai Chamber Meeting in 2009 to listen to the traditional New Year’s address of the German Consul General, Dr. Albrecht von der Heyden. After giving a short review of last year’s major events, the keynote speaker focused on the economic outlook for 2009, stressing the importance of continuous growth and develop-ment of the Sino-German relationship.

The developments in 2008 took quite a different turn than in the years before. From the devastating earthquakes in Sichuan and the global financial crisis to China’s impressive hosting of the Olympics and Paralympics and an improvement in the bilateral ties between China and Germany – the spectrum of events was wide.

However, the dream of an economic growth of 12 to 13 percent in China for 2008 did not come true. Although Germany’s economy expe-rienced a crunch in the last quarter, it is still the worldwide leader in terms of exports, closely followed by China, which is now the third largest economy in the world. In 2008, China’s GDP increased by 9 percent, its exports by 17 and imports even by 18 percent. By com-parison, the German GDP rose only 1.3 percent, with exports growing by 3.9 and imports by 5.2 percent. On a positive side note, Dr. von der Heyden mentioned that the number of jobholders in Germany has reached 40 million for the first time last year.

For 2009, China officially expects its economy to grow by 8 percent, whereas in Germany stagnation or even a recession of up to 2 percent is in all probability. It is important that small and medium-sized enterprises – the backbone of the German economy - receive incen-tives to further increase their investments and consumption. Contrary to the opinion of many experts, Dr. von der Heyden warned that China will not continue to grow automatically. Its government has to encourage investments and private consumption and it has to be more open towards critical questions and advice from the international community. The Consul General’s recent invitation in front of the Shanghai legislative commission to talk about the German concept of social security can be seen as a clear signal of China’s willingness and interest to learn from its foreign partners.

Sino-German trade relations have witnessed a strong boost during the first half of last year, when German exports to China have grown by 20.6 percent, while German imports from China have seen a 6.5

percent rise. The aim is to hit the 100 million Euro mark in the bilat-eral trade balance by 2010. The strong ties between the two countries are not limited to economic issues. Dr. von der Heyden stressed the importance of the growing bilateral integration in the fields of science and education, which will be two focus areas of the German foreign policy in 2009. In this context, the speaker commended the training center in Taicang, which educates Chinese students according to the German dual system. Further aims in this field should be international scholarships and exchange programs for Chinese and German students to reach a higher education level and a better preparedness for today’s globalized work environment.

Topic: Deutsch-Chinesische Wirtschaftsbeziehungen – Aktuelle Ent-wicklung, Perspektiven, neue InitiativenDate: 26th February 2009Speaker: Dr. Albrecht von der Heyden | Consul General of the Federal Republic of Germany in ShanghaiChair: Mr. Thomas Dorn | CEO, Vossloh Fastening Systems (China) Co., Ltd.

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Shanghai - Chamber Events

The entire consequences of the financial crisis for the Chinese market are not foreseeable yet. Whereas sectors like the automotive industry have already suffered heavy losses, some others – especially in the service industry will be affected only in a couple of years. As a matter of fact, many companies are facing problems of work time reductions and mass layoffs.

Mr. Fischer from Roedl & Partner updated the Round Table audience on the legal framework and consequences for employers with regard to short-time work arrangements and layoffs. In both cases it is crucial for the employer to discuss such planned measures jointly with the employee, especially if a new work contract is required. All regulations regarding work time, annual leave and salary have to be mutually agreed upon, or else the old contract prevails. If a new contract is approved, it must adhere to local minimum wage regulations.

A mass layoff occurs when at least 20 employees or more than 20 percent of the personnel – if the company has less than 20 staff – are made redundant. The terminology leaves room for interpretation and the exact procedure to be applied in case of a mass layoff should be clarified with the appropriate labor authorities in advance. In some districts their prior approval is necessary for conducting the layoff. A company must provide proof that its economic difficulties make the planned mass layoff an indispensable measure.

To shed more light on the regional business confidence after the global economic crisis, Mr. Bernd Reitmeier, Managing Director of German Industry and Commerce in Greater China, presented the

findings of a survey conducted in Decem-ber 2008 among 200 employers in China, Hongkong and Taiwan. The majority of respon-dents believed that China has been hit by the crisis less severely than other countries. However, 43 percent of the respondents e x p e c t e d f u r t h e r declines of sales in 2009 and 62 percent estimated to overcome the downturn only in 2010. 56 percent of the employers interviewed did not plan to raise salaries in 2009.

Topic: Die wichtigste Frage für 2009 – Wie kommt man gestärkt aus dem Tal?Date: 22nd January 2009Speaker: Mr. Alexander Fischer | Chief Representative, Roedl & Partner Legal Shanghai Representative OfficeChair: Mr. Kurt Fasser | Senior Adviser, GCC • Shanghai

The new tax reform in China and its changes to the Value Added Tax (VAT), Business Tax (BT), customs and transfer pricing regulations, will bear some r i sks and uncertainties, but also new opportunities for companies.

China has adopted a consumption based VAT system. As a conse-quence, the VAT rate for small-scale tax-payers will be lowered, whereas the VAT rate for mineral products will be raised by four percent to 17 percent. The export VAT refund is used by the Chinese government as an economic steering

tool. Hence, it was increased five times during the past six months. The most significant amendment to the Business Tax law has been the change in principle of where the service receiving or providing entities are located. There is no way for companies to deduct the extra burden of five percent.

Since 2008, most enterprises also have to file a transfer pricing docu-mentation with detailed information about their associated enter-prises, including a summary of their different types of transactions, debt financing and outbound investments by May 31st of the following year. Failure to comply can lead to fines and investigations by the tax authorities.

The speakers reinforced that the tax reform in China has only just begun and that further changes in tax-regulations should be expected in the first quarter of 2009.

Topic: China Tax Update 2009 – Risks and OpportunitiesDate: 13th January 2009Speakers: Ms. Sarah Chin | National Indirect Tax Partner; Mr. James Yi Min Zhao| Partner, PhD Economist, both from Deloitte Touche Tohm-atsuChair: Mr. Ferdinand Pillenstein | Regional Manager Jiangsu & Zhejiang Provinces, GCC • Shanghai

Employers’ Measures and Expectations for 2009 JV Round Table

Further Changes Expected to Tax Regulations in 2009Suzhou Special Seminar


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Get to Know Your Online UserWorkshop Marketing & Sales

Chinas internet market has the world’s biggest internet popu-lation with over 298 million users, of whom over two thirds are younger than 30 years. Hence, online music, instant messaging and internet games are some of the most popular internet applications. Although

this young target group certainly offers the biggest potential for the future it has to be kept in mind that the remaining 30% of users aged 30 and above still represent over 90 million people and should not be disregarded.

Chinese internet users expect up-to-date news and information and entertainment content with a clear preference of more animated and colorful sites. ‘Western’-looking sites also gain high user satisfaction ratings because of their clear-cut approach and variety of useful infor-mation and services. Although the internet in China has certain limi-tations, it is very popular due to the fact that it provides information that is otherwise unavailable in traditional media.

Dr. Frank Knapp from Psyma presented a web usability testing method for examining user behavior on a certain website. The eye tracking technology is a non-invasive technology and analyses the eye move-ment of users to see how they interact with the website. The Hotspot and scan path analysis are used to identify which areas of the screen attract most attention and which one are being ignored. A company should aim for a website that provides all information needed by the target group in a clearly arranged and entertaining way. Therefore it is necessary to know the specific users’ needs and perceptions well before developing one’s web presence.

Topic: Maximize the Impact of your online Presence in ChinaDate: 16th February 2009Speaker: Dr. Frank Knapp | Managing Director, Psyma Research and Consulting GmbHChair: Ms. Petra Kornfeld | Marketing Advisor

Chamber Events - Shanghai

The term ‘transfer pricing’ describes the pricing of goods and services transferred between associated companies. As the price is not fixed by market mechanisms there is a danger of multinational companies abusing transfer pricing for tax reduction in certain jurisdictions.

Chinese Law now prohibits such practices in articles 41 – 48 and articles 109 – 123 of the Enterprise Income Tax Law supplemented by administrative implementing rules. These regulations stipulate the so-called ‘arms length principle’, which forces companies to match their transfer prices to virtual market prices. In order to enable Chinese tax authorities to control compliance with this principle, companies must prepare detailed annual documentation including information on the corporate structure, financial background and relevant transactions. If documentation rules are disobeyed an exhaustive tax audit impends.

This can result in a retrospective esti-mation of taxes, additional taxation and yearly filing of transfer pricing documentation.

Topic: Getting ready for the new Transfer Pricing Documentation RulesDate: 14th January 2009Speaker: Dr. Wei Shu | Tax Partner – Transfer Pricing, Deloitte Touche Tohmatsu CPA Ltd.Chair: Mr. Alexander Prautzsch | Manager, Ernst&Young German Busi-ness Center

Stay of Innovative in Trying TimesWorkshop Automotive Industry

Not many other industries have felt the affects of the global credit crunch as drastically as the automotive industry. A sharp contraction in demand has led to a slump in the sales prices for new vehicles. Shanghai Volkswagen (SVW), the subject of a recent automotive workshop hosted by GCC • Shanghai, is also experiencing a constantly growing number of competitors, so constant innovation has become the name of the game in the defense and growth of its market share in China.

The fierce competition among car manufacturers in the Chinese market has led to a price erosion of up to 50 percent. High oil prices, infla-tion rates, rising taxes and the loss of consumer confidence as a con-sequence of the financial crisis put the demand of new vehicles under additional pressure. The decreasing price of raw materials like steel, copper, aluminium and nickel helps car companies to keep the car prices on a lower level.

Last year SVW sold over 500,000 vehicles and employed 11,500 staff. Although a decrease of up to six percent in the whole automotive industry is forecasted for 2009, SVW expects its sales volume to remain unchanged this

year. The speaker underlined that stable success and market share in the automotive industry can only be achieved by regular introductions of new models. SVW, for example, launched the Skoda brand in China last year and introduced the Lavida as the first car specifically devel-oped for the Chinese market.

Topic: Challenges SVW Purchasing 2009Date: 20th January 2009Speaker: Mr. Thorsten Brand | Head Purchasing Department, Shanghai VolkswagenChair: Dr. Harald Neumann | Senior Director Technical Centre, UAES United Automotive Electronic Systems Co., Ltd.

Arms Length Principle in Transfer PricingWorkshop Tax, Finance & Law

www.china.ahk.de


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Shanghai - Chamber Events

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Balancing Work and Life in a Fast-Paced EnvironmentChamber Meeting February

9th Trade FairAlready a half-yearly tradition ( every spring and autumn) the GCC Trade Fair gave exhibitors the opportunity to display new products and services to visitors and guests of the following Chamber Meeting. The 18 available booths had been sold out quickly and included stands from Ingenics, T-Systems, Oldenburger, Eclipse City and HRO, to name just a few.

Over two hundred members and esteemed guests of GCC • Shanghai have gathered to spend the evening together at the Portman Ritz-Car-lton. The topic of the dinner speech has obviously struck a chord with many senior executives who have to deal with the hustle and bustle of China’s economic capital.

Chairman of the evening and of GCC • Shanghai, Mr. Arved von zur Mühlen, welcomed the audience and the many exhibitors of 9th trade fair that was preceding the dinner in the foyer. As a new member of the Chamber board, Mr. Günther Strobel, Managing Director of DEKRA (Shanghai) Co., Ltd. was officially greeted. Then the floor was opened for self-introductions of the newcomers and first-timers at the Cham-ber’s primary monthly Get-Together.

Ms. Stefanie Eschenlohr from the German Academic Exchange Service (DAAD) introduced a scholarship program that covers a 10-month aca-demic stay in Beijing, followed by a 6-month internship at a company.

Ms. Eschenlohr was proud to attend the evening together with her group of ten participants of the DAAD program.

As the keynote speaker of the evening, Ms. Doris Rathgeber, founder of two medical centers in Shanghai and an expert in Traditional Chinese Medicine (TCM), shared her views about the challenges of creating and achieving Work-Life Balance in China, particularly in a rapidly moving mega city like Shanghai.

The aim of Work-Life Balance is to keep one’s input and output of ener-gies on an equalized level. She pointed out that the stress factors for expatriates in Shanghai are multi-tiered and include pressures in busi-ness, family and on a personal level. TCM aims to keep Yin and Yang, the passive and active side of a person, in balance. This holds true in business, where a balance of thinking and acting is needed, but also in a partnership and on a personal level, where activity should be followed by rest and contemplation. The five elements of wood, fire, earth, water and metal play also an integral part in Chinese philosophy and must be balanced to lead to a person’s well-being. Each element is associated to an internal organ and an external body part, which serves as an indica-tor for imbalances in any of the five elements in a person’s body.

Climate, emotions and lifestyle habits are the three most common nega-tive influencers on one’s internal balance. Harmful lifestyle habits are the easiest preventable factors and include three main groups, dietary habits, self-medication and physical exercise. Although everyone usually knows from within what is good and bad for one’s body, the step to changes and discipline is often done at a very late stage. Ms. Rathgeber recommended the audience to develop more consciousness concerning their lifestyles to pay attention to one’s nutrition, to exercise and to consult a doctor in case of health conditions, be it a Western or a TCM trained professional. Trying out a TCM diagnosis and treatment, combin-ing Tuina massage, acupuncture and decocts (herbal teas) can often be a good way to release stress and build up ones energy level.

Many questions from the floor, personal experiences with TCM and a passionate declaration of love to the city of Shanghai, in spite of all its vices concluded the upbeat and often humorous evening. Topic: Work-Life-Balance in China - Höchstleistungen bringen und dabei gesund und glücklich bleiben?Date: 26th February 2009Speaker: Ms. Doris Rathgeber, OMD | General Manager and Founder of Body & Soul – Medical ClinicsChair: Mr. Arved von zur Mühlen | Chairman of the Board, GCC • Shanghai & Managing Director Greater China, Lufthansa German Airlines

www.china.ahk.de


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New Year’s Reception 200925th February 2009For the second year, the GCC • Beijing’s New Year Reception was held at the Imperial Granary. Members and Chinese guests mingled with the Board and representatives from the embassy in a unique setting, while Jessica Meider enchanted the audience with her silky voice.

Around Town – Beijing Law Working Group20th February 2009

Dr. Thomas Pattloch, Intellectual Property Officer from the EU Delegation of the European Commission, gave an overview on the most relevant changes in the new Chinese patent law.

Around Town – BeijingCologne Karneval in “Der Landgraf”

7th February 2009The popular German Restaurant made for

the venue of crowning China’s first Carnival Princess, whose costume was named the

best out of a large number of sensational masquerades.

German Embassy Karneval Party14th February 2009Cologne Karneval spirit was all over Beijing last month. On Valentine’s Day the German Embassy called in for its great event!

Tianjin Biz Socializer17th February 2009

The 3rd Tianjin Business Networking turned out to become a great success. More than 150 participants gathered at the Renaissance Tianjin TEDA Hotel & Convention Center to find new business partners and exchange valuable contacts. Excellent opportunity for members from Beijing to get to know the Tianjin expat community!

Around Town – Guangzhou

Spring Festival Flower FairMid-January 2009Traditionally held on New Year’s Eve the annual Spring Festival Flower Fair robes the “City of Flowers” in a colourful rose-scented coat.

German Happy Hour Guangzhou24th February 2009

A record number of 101 guests came to attend the monthly get-together of GCC • Guangzhou. The crowd celebrated the opening of the new German restaurant Station One, located on idyllic Shamian Island and tasted specialties such as Thüringer Rostbrät sausage with potato salad.

Anzeige_190x265mm.indd 1 2009-3-9 14:13:11

Around Town – Shanghai Opening of Bremen Office8th January 2009

To celebrate the opening of its Shanghai office and the selection as an Urban Best Practice Area for the World Expo 2010, the Free Hanseatic City of Bremen hosted a cocktail and dinner reception at 789 Bar of the Le Royal Méridien with stunning city vistas. Bremen’s Deputy Minister for Economic Affairs and Ports, Dr. Heiner Heseler

updated the guests on his city’s Expo participation and business opportunities.

February Kammerstammtisch10th February 2009Over 60 regulars and newcomers met at this recent edition of the popular networking evening that will be held also in 2009 at the second Tuesday of each month at Paulaner’s Fenyang Road branch.

Fasching – Carnival hits Shanghai! 21st February 2009

After a two-year absence Paulaner Bräuhaus Shanghai brought back the fifth season to town and kicked off one of the craziest Fas-ching’s parties Shanghai has seen in years. More than 570 Fasching fans celebrated the festival, which was originally meant to drive

out the evil spirits of winter and to welcome the nicer seasons.

Around Town – Shanghai

Hamburg Alumni Dialogue22nd February 2009Held traditionally at the Culture & Education Depart-ment of the German Consulate General in Shanghai, this event attracted former exchange students and teachers from the partner schools, universities as well as the students from PASCH program.

DCGS New Year’s Reception11th January 2009The local council of the German-speaking Christian community in Shanghai (DCGS) invited to this traditional seasonal gathering, held at the Longemont hotel. 240 guests came to attend the ecumenical service, followed by greeting words and a reception.

Bundesliga is Back!7th February 2009The Hofbraeuhaus Pudong hosted this late-night live screening of the game between Werder Bremen against Schalke 04 (0:1). An all-you-can-eat-and-drink buffet as well as live music during enter-tained the over 30 fans.

Kohl & Pinkel – Cabbage Tour 2009 28th February 2009This Northwest German tradition has drawn over 60 participants this year joining the walk trough Century Park and the following feast at the Hofbräuhaus Pudong. Ample supply of apple schnapps and beer kept the walkers warm and helped improve their aiming accuracy at the tea-bag throwing contest. The RMB 1,500 profit of the evening was kindly donated to Project Integra-tion.

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Further Regional Expansion and Strengthening Ties with ... · PDF fileWhen it comes to regional variation within China, ... sor, Institute of Policy ... The theme of our event „Chances