Stronger Sino-Germany cooperation expected

BEIJING -- When Klaus Taafel decided to start a solar energy joint venture with his Chinese partner in East China's Shandong Province more than ten years ago, he saw huge potential in the domestic market and was eager to introduce German solar technology to China.

The Sino-German partnership has proven successful in the time since. Linuo Paradigma, a joint venture between the Chinese Linuo Group and Taafel's German Paradigma Group, has turned into a clean energy giant with a registered capital of 60 million yuan ($9.52 million).

"The first four years were not easy," said Taafel. "To bridge our differences, both sides had to learn more about each other's culture. This mutual trust and learning has been the key to our success."

The joint venture is now one of the largest solar technology providers in Asia, with four production centers in China and one in Cuba.

Like many German investors and entrepreneurs, Taafel is confident about the company's future expansion in China and the global market.

"With our extensive product portfolio and deepening ties between China and Germany, all doors are open to us," he said.

Technology has become a key player in cooperation between both nations, which have become each other's largest trade partners. A continued rise in mutual investment and technological exchanges are expected to boost ties between both countries, as it has in previous years.

German enterprises have looked to high-tech industries as their preferred investment destinations, including the auto, chemical, power generation, transportation and communication industries. They have also participated in the construction of Chinese infrastructure, including subways, nuclear stations and water conservancy projects.

Technological transfers from Germany to China totalled $52.21 billion in value as of April 2011, accounting for 15,448 contracts in the communication, transportation and electronics sectors.

As the official partner country of this year's Hannover trade fair, a major industrial expo that opened on April 23, China is looking to deepen its ties with German industries, as well as those of other nations.

In a speech delivered at the opening ceremony, Premier Wen Jiabao said China and Germany, as two of the most important manufacturing countries in the world, are working closely to promote cooperation in global industry.

Over 500 Chinese companies attended the five-day fair, showing innovative products and technologies in the new energy, electric vehicle and intelligent manufacturing sectors.

During a meeting with his German counterpart Angela Merkel, Wen said China's rapid economic development can provide a huge market for Germany, adding that China welcomes German enterprises to boost their investment in China.

"China's investment environment has been quite good," said Taafel. Many restrictions have been removed in the past decade, he added.

In the context of globalization, growth is shared across the world and mutual investment will become even more common, he said.

A survey from the German chambers of industry and commerce showed that in 2011, China for the first time replaced Europe to become the most attractive investment destination for German enterprises, with 43 percent of surveyed companies expressing hope to expand production or sales in China.

The Chinese government has voiced support for more outbound investment to Germany, which looks to have good potential in its future development.

Chinese enterprises have so far invested $1.92 billion in Germany, Wen said earlier this year at a meeting with Chinese and German entrepreneurs.

Currently, there are some 5,500 German companies operating in China, while there are only around 800 Chinese companies, mostly small- and medium-sized, operating in the German market, according to figures from Germany Trade & Invest.

"Chinese enterprises are growing stronger and the government will encourage them to invest in Germany," said Wen.