German firms to forge stronger ties with China

German companies hope to use Asia's largest power transmission control exhibition - PTC ASIA - this month to forge even stronger business ties with China.

The world's second largest annual exhibition of its kind in the industry will serve as an important door to reaching the huge Chinese market for German companies at the end of the month, said Hartmut Rauen, managing director of the Power Transmission and Fluid Power Association within German Engineering Federation (VDMA). He added many long-term business deals and relationships were established during the exhibition's previous sessions.

If you look to the actual PTC ASIA, you will find a lot of successful joint ventures between Chinese and German companies with a long history, he said. We expect for 2008 again that we will have together with our Chinese partners a successful show.

This year's four-day fair starting today will display over 1,300 projected exhibitors, including member companies from VDMA, which will showcase the latest technology for motion and automation solutions as well as energy efficient products to help find solutions for energy problems in most mechanical applications.

Rauen says the trend towards energy efficient products open new options for developing the power transmission engineering and fluid power industry. He is also optimistic about opportunities for German and Chinese companies to cooperate in wind energy, solar technology or efficient-driven solutions for agricultural, construction and production machineries.

Rapid trade development between China and Germany shows the Chinese market - and the power transmission products sector in particular, is becoming increasingly important for Germany. And as numbers show the European country's promising Chinese customer base continuing to grow, business of both countries are optimistic about the future.

VDMA statistics show exports to China in fluid power products grew 10 times from 28.4 million euros (38.2 million U.S. dollars) in 2000 to 284.6 million euros (383.6 million dollars) in 2007. In the meantime, power transmission products increased from 96.9 million euros (130.2 million dollars) to 762 million euros (1.02 billion dollars) in the same period.

Imports from China also grew significantly. Fluid power products climbed from 3.45 million euros (4.65 million dollars) in 2000 to 19.44 million euros (26.2 million dollars) in 2006. Meanwhile, power transmission products soared from 74.6 million euros (100.5 million dollars) to 185.6 million euros (250.1 million dollars) in the same period.

I think this export-import development is the best sign showing that Sino-German business cooperation is still a fast growing business for both German and Chinese companies, said Rauen.

According to Rauen, German power transmission engineering and fluid power companies are committed to establishing a win-win situation for cooperation between the two countries by thinking in complete solutions orientated to the needs of Chinese customers and markets. He added there are many opportunities from both sides to learn from each other.

The Chinese society will need environmentally friendly and energy efficient technology solutions combined with a fair product price, he said. These characters underlie the competitiveness of German products and are the aims of German engineers.

But even as Chinese and German companies look forward to strengthening business relationships - that doesn't mean future challenges are being ignored, says Rauen. He admitted it will be tough to build long-term relationships and find fair solutions together for the global problem of intellectual property rights.

Success will be based on the understanding of both cultures - and fair play in cooperation, said Rauen.