December 7, 2022

The Chinese German hub of Taicang retains its European charm

(Yicai Global) Nov. 18 — Taicang in eastern China, known as the “hometown of German enterprises in China,” is attracting a growing number of enterprises from the European country to settle.

The number of German companies in the city of Jiangsu Province has risen to 450 this year. The first German company entered the city in 1993.

Taicang, a small town 50 kilometers from Shanghai, is the only official cooperation base for Chinese and German enterprises and the first cooperation demonstration zone for Chinese and German small and medium-sized enterprises, two appointments granted by the government, Li Gang, director of the management committee of Taicang Hi-tech Industrial Development Zone, said Yicai Global.

These companies come mainly from Bavaria, North Rhine-Westphalia and Baden-Württemberg, and produce basic auto parts, high-end equipment and advanced materials. A group of “hidden champions” have entered the city, forming an industrial system of research and development, as well as manufacturing of precision machinery and auto parts, Li added.

30 years of cooperation

Hans Jochem Steim, Chairman of Kern Liebers Group, came to Taicang three decades ago. The manufacturer of strip and wire parts, which counts the Volkswagen Group among its customers, initially had only seven to eight German workers with two workshops, but the number has grown to 800 employees and 1.5 billion CNY (210, 7 million USD) of production value in China, according to Li.

After Kern Liebers, other enterprises have followed, so that the Chinese city has so far attracted 5 billion dollars of German capital, and the annual industrial output value of German enterprises exceeds 50 billion yuan (7 billion dollars), according to government data.

Another good example is Schaeffler Technologies, a manufacturer of rolling element bearings used in cars and airplanes. Schaeffler’s local annual output has risen to 20 billion yuan from the initial figure of hundreds of millions of yuan, Li noted. The company initially invested only DEM 30 million ($15.9 million) while its latest local investment in July reached $300 million, Li added.

Over the past five to six years, all German manufacturing companies in Taicang have increased investment, according to the director. They injected $230 million in total last year, given their bullish outlook on the Chinese market. Nearly 10% of all German manufacturing companies in China are based in Taicang, he added.

Overflow effects

The city has also changed with the expansion of industrial settlement and German influence, and a concrete example of this is the development of vocational education, Li said.

Taicang has 15 dual education system platforms, including the largest Sino-German training center in the Yangtze River Delta region. It has trained nearly 10,000 engineers and nearly 400,000 other workers. The system allows students to learn on the job.

The business landscape has evolved. Local companies mainly provided low-end support to German companies, but now they are cooperating in technology R&D, training and even equity, Li said. “Local companies in Taicang have also benefited a lot from their cooperation with German companies.

Some companies in Taicang have already set up R&D centers in Germany to keep abreast of the latest automotive market trends, the director added.

Taicang’s cultural landscape has also taken on German flavors. The service sector is growing with hotel brands such as Tui Blue and Maritim Hotels opening hotels in the city. “We hope to make Taicang Hi-tech Industrial Development Zone a famous site on the Internet and strengthen cooperation with Germany,” Li said.

Foreign culture is making its way to the city. German football club FC Bayern Munich planned to establish a football school in Taicang. In addition, the port city of Hamburg is working on the construction of the Hamburg House in Taicang.

Most German companies in Taicang come from southern Germany. The Hamburg House can therefore help companies in the north of the country to cooperate with the Chinese city in investment, trade and innovation, said Pan Hua, chief representative of the Hamburg Liaison Office in China. Yicai Global.

In addition, Taicang, which connects the Yangtze Delta region to the sea, has the largest river port in China, so Hamburg, as a shipping and rail hub between Chinese and European markets, is willing to establish more partnerships with Taicang and its high-tech area, Pan added.

Editors: Tang Shihua, Emmi Laine, Xiao Yi