Economic strategy: China’s double game in world trade

As much as the Chinese economy benefits from global trade, the country also wants to be self-sufficient and develop key industries. How far has China come in this regard?

Zhu Liting lives in Shanghai. He worked for German companies for twelve years – in the field of mechanical engineering and 3D metal printing: “I am now very familiar with this technology and also with how it will continue in the future. Both the USA and China have this technology in their plans as one of the most important future technologies,” he says.

3D metal printing is used in aerospace and medicine, for example. German know-how is valuable here. The People’s Republic is also dependent on German robot technology, industrial software and chemistry.

In the past ten years, one of China’s strategies has been to buy up foreign knowledge through companies. Like the German special robot manufacturer Kuka six years ago. Such takeovers have now become fewer again. The trend is clear: China wants to make itself independent of other countries in key industries.

lag in technology

Zhu Liting founded his own start-up in Shanghai. He now manufactures metal 3D printers for the Chinese market based on what he learned in the German companies. Nevertheless, he says, it’s not yet at the level of German technology: “When will China be able to catch up? As far as technology is concerned, I think in ten years.” He compares China to the German company Siemens: “Siemens has been in the industry for a long time. The company’s reputation, stability, applicability – everything is recognized in the market. Getting there costs China a lot of investment.”

Above all, China invests a lot of money in the special industries. For example in aerospace or biotechnology and medical technology. Jörg Wuttke, President of the European Chamber of Commerce in China, repeatedly emphasizes that European companies have it easier in these sectors than in other branches of industry. However, only until they are no longer needed.

Wuttke himself speaks of a three-class system. All the “hidden champions” from Europe can be found in “business class”. “At the same time, there will be an economy class. These companies are ‘nice to have’, but you can basically replace them at any time,” says Wuttke. With a little political will and the wherewithal, it’s easy to do. “And then we have the cargo hold. These companies can be kicked out at any time. That wouldn’t attract much attention here,” said the expert.

Components for electric cars are still in demand

Even the German car manufacturers are no longer part of the “business class” in China, even if German cars are in demand. But VW, Daimler and BMW do not appear among the manufacturers of the best-selling electric cars in China. It is the Chinese brands that are bought more frequently in China, especially when it comes to electric cars and autonomous driving.

Zeng Zhilin is a Chinese auto expert based in Shanghai. He reveals that under the hood of Chinese e-cars there are often German car parts: “Germany still has a unique advantage in car parts and in the supply chain. Bosch, for example, is still very strong in car parts, even in electric car parts, and still has large market shares.”

However, he advises German suppliers to the automotive industry to offer customers based in China exactly what they need for the trend towards electric vehicles and intelligent cars in the future. Because German car parts are no longer irreplaceable on the Chinese market: “The Chinese carmaker BYD, for example, has managed to replace many German car parts that were previously considered irreplaceable with its own.”