Friday, July 16, 2010

German Business Moves Beyond Russia to China


While the Moscow-Berlin political relationship gets a lot of attention, German companies have come to realize that the money to be made in Russia is overshadowed by the prospects even farther afield in China.

Germany is China’s biggest trading partner by far in Europe, and the trade is increasing by leaps and bounds, especially for high-value electrical and electronic goods. Germany’s car industry, which suffered greatly during the global financial meltdown, has recovered thanks in large part to a surge in Chinese demand for the top range of German cars — Bayerische Motoren Werke raised its 2010 forecasts on Tuesday for that very reason.

German companies also are investing heavily in training programs for engineers and computer experts in China as the country upgrades its industrial base. Meanwhile, the largest group of foreign students in German universities is from China, with engineering one of most popular subjects, according to a study by the German Foreign Ministry.

Even the big German retailing chains, like Metro, are setting up shop there.

The new focus is evidenced by a trade mission being led by Chancellor Angela Merkel, starting Wednesday: For the first time, she is combining Russia and China in one trip — with energy-rich Kazakhstan thrown in for good measure.

Some analysts have criticized Mrs. Merkel for putting Russia and China into the same travel package. “No chancellor has done such a package tour,” said Alexander Rahr, Russian expert at the German Council of Foreign Relations. “It could send the wrong signal both to Moscow and Beijing.”

To read more: http://www.nytimes.com/2010/07/14/business/global/14trade.html?_r=1&ref=asia

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