Ticker

erman Chamber

03 | 2014

June – July

Business Journal of the German Chamber of Commerce in China

www.china.ahk.de

BUSINESS AND SOCIAL RESPONSIBILITY Thinking Beyond Charity A Good Foundation and Great Potential Interview with Mr. Sun Yongfu of the Ministry of Commerce, China

The Ethical Economy Doing Good in an Era of Value Crisis

The New Chinese-German Tax Treaty Good News for German Investors in China Available on the

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Mr. Titus Freiherr von dem Bongart Chairman of the Board of Directors German Chamber of Commerce in China | Shanghai Partner and Head of GBC China Ernst & Young (China) Advisory Ltd.

A New Era of CSR China has experienced enormous economic growth in recent decades and has developed from an emerging country into a prosperous industrial nation. This development brought opportunities, challenges and responsibilities not only in the business sphere but also regarding the social aspects of doing business. Nowadays when running a business in China it is impossible to ignore the term corporate social responsibility (CSR). In Western countries the concept of CSR is well known, and by now deeply rooted in the business plans of many companies. In China, CSR was for a long time not widespread: In 2006 only 18 Chinese companies issued a CSR report. In the last few years the situation has changed as the shift in policy towards a Harmonious Society and the influence of foreign companies promote the proliferation of the idea of CSR in China. In 2012 the number of CSR reports climbed to 1722 – a tenfold increase in only six years. This development shows that companies are assuming responsibility for their corporate citizenship and that social initiatives are gaining more importance and attention in China. But as CSR initiatives are spreading throughout companies in China, one can observe that CSR programs are highly diverse. It becomes apparent that the term CSR no longer only means charity. Corporate philanthropy, socially responsible leadership, social entrepreneurship, and multi-stakeholder initiatives are common terms you will encounter when talking about CSR. What are the different aspects of CSR? How can companies execute CSR measures in China? And how can a company make an impact with its CSR initiative? These are topics we want to explore. This issue of German Chamber Ticker will provide insight on social innovation and how it can be carried out in the business plan of a company. It will further show the perspective of NGOs and social entrepreneurs on the development of CSR programs in China. The reader will also learn about the trends in CSR which became apparent in the German Chamber Shanghai’s workshop “Business & Society.” Moreover, author Nicolai Petersen will present his view on what he calls a “value crisis” and what an ethical economic system could look like. We hope this issue will give you a better understanding of the development of CSR in China. Enjoy reading! Yours sincerely, Titus Freiherr von dem Bongart

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CONTENT Business 8

Cover Story: CSR: Getting Better

China News

Cover Story: Business and Social Responsibility 11 CSR: Getting Better 15 The Ethical Economy 19 Great Chemistry 22 The View From the Workshop 26 Talent is Everywhere 28 Social Innovation 32 Social Entrepreneurship 34 Small Size, Big Impact

p. 11

In the Spotlight: 37 A Good Foundation and Great Potential: Interview with Sun Yongfu, Director General, Department of European Affairs, Ministry of Commerce (MOFCOM), China Features 40 Shanghai FTZ – Legal Update 44 The New Chinese-German Tax Treaty 46 Wage Survey 2014 48 Notes on a Scandal 50 HGB and China GAAP 52 More Than 300 Years of Family

Regional News Features: Shanghai FTZ – Legal Update

p. 40

North China 54 Member Affairs 58 Chamber Affairs Shanghai 68 Member Affairs 79 Chamber Affairs South & Southwest China 94 Member Affairs 96 Chamber Affairs In Person: 72 Mr. Xiaolong Hu, Managing Director, UNITY Business Consulting (Shanghai) Co., Ltd. 76 Mr. Tom Kane, President, Rotary Club Shanghai 84 Mr. Christoph Ladurner, Chief Executive Officer of Greater China, Würth Line Companies

Chamber Affairs: Breakfast Briefing with Federal Minister Sigmar Gabriel

p. 65 6

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106 GCC Boards 107 About us Correction: We hereby acknowledge that the article “Beyond Brick and Mortar – Setting up a Chinese E-commerce Channel” by Ms. Kristina Koehler-Coluccia/Klako Group, printed in the February-March 2014 edition of the German Chamber Ticker was sourced from the EU SME Centre’s report “Selling Online in China”. The full report published by the EU SME Centre can be found at http://eusmecentre.org.cn/ content/selling-online-china

More Than Just Office Space

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BUSINESS | China News

Sea Turtles Prefer Foreign Firms New numbers from the Ministry of Education show that a rising number of Chinese are returning home after studying abroad. Overall, about 414,000 Chinese went abroad to study in 2013, while 354,000 returned. Last year’s gap was half the size of 2012, when 130,000 more people left China than those who came back. One of the main reasons for returning are modern cities like Shanghai, which can now offer career development opportunities and living conditions that are comparable to other global centers such as New York, London and Tokyo. The numbers also show that many returning students avoid Chinese employers and prefer to work for big global companies, which offer better working conditions and career development opportunities. China And German Carmakers Strengthen Ties The German car makers Volkswagen AG and Daimler AG signed agreements to expand their production capacity in China and introduce more green technologies to their Chinese ventures, when China’s President Xi Jinping came to Berlin and called for a “quantum leap” in economic relations between China and Germany. Volkswagen has agreed to produce eco-friendly models with its two Chinese partners, SAIC Motor Co. and First Automotive Works Group, and got approval for additional production capacity through the venture with FAW. Daimler AG will also increase its production capacity with its partner Beijing Automotive Industry Co., and BMW pledged to strengthen ties with its Chinese partner, Brilliance Automotive Holdings Ltd.

distribution, substandard products, and banned additives, said Mr. Liu Pei, SFDA center director. The rise of complaints about food and pharmaceutical safety show the growing public awareness of consumer rights and interests, Mr. Liu said. Food and drug safety is a sensitive issue for Chinese consumers. The food and drug industry has been hit by a number of scandals in the past few years.

called for a “new style” of urbanization, and focused on making cities fairer for migrants. The new document recognizes that urban China risks being destabilized by the creation of a huge mass of what the Chinese media sometimes admit are “second-class citizens.” The plan calls for the “gradual elimination” of the main reason for this: the hukou system of household registration. Hangzhou Seeks to Create Online FTZ

Frankfurt Becomes Center of Trade for China's Currency

The city of Hangzhou has proposed an online version of Shanghai's free trade zone that facilitates cross-border e-commerce. The host city of Alibaba Group Holding Ltd., one of the world's biggest e-commerce companies, said it is in negotiations with relevant ministries to create an online zone that is complementary in function to the landmark Shanghai FTZ. Hangzhou's deputy mayor, Mr. Xie Shuangcheng, stated that the zone will focus on institutional innovation in customs clearance of crossborder e-commerce deals. The zone will make breakthroughs in four areas, namely information sharing, financial services, intelligent logistics and e-commerce credit.

A clearing bank is to be established in Frankfurt which will perform transactions in Chinese currency – the first trading center for the Yuan in the Euro zone. A letter of intent was signed by the German Bundesbank and the Bank of China in the framework of the state visit of Chinese President Xi Jinping. Moreover, China and Germany agreed to work together in payment transactions. The German stock market will develop the necessary infrastructure together with the Chinese central bank. In this way the Chinese central bank will be connected to the trading and clearing systems of Germany's largest exchange operator, and Asian investors will get direct access to the European capital markets.

The Market For Air Filters Is Growing Fast

270,000 Food And Drug Safety Complaints Received in 2013 Almost 270,000 complaints about food, pharmaceuticals, cosmetics and medical equipment were received by Chinese authorities in 2013, stated an official of the State Food and Drug Administration (SFDA). Most complaints concerned unlicensed production, advertisements, unauthorized

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The number of smog days in Chinese cities is increasing, and so are the sales of air filters and air cleaning equipment. Recently, the USD 400mn sales mark was exceeded. According to statistics by China Market Monitor 2013, a total of 2.4mn units were sold throughout the country - an incredible 90% more than the year before. The retail sector recorded revenue of USD 417mn for the devices, an increase of 160% in a single year. A New Plan For Urbanization A new plan for managing the world's largest migration of rural residents into cities has been revealed by the Chinese government. It

China’s Small Businesses Face Challenges Small and micro-sized companies have played a leading role in creating jobs in China, but they face daunting challenges as most of them are concentrated in lowprofit traditional sectors. As of last year there were 11.7mn small and micro-sized enterprises in China, accounting for 76.57% of total businesses, said a report of the State Administration for Industry and Commerce. Around two thirds of them are from sectors like industrial, retail, leasing and commercial services which feature low technology, saturated markets and little added value. The report stated that “small businesses face a less robust growth outlook in the long term”.

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Tourists Compensated For Smog On a typical smoggy day only 11,000 visitors come to see the Forbidden City in Beijing, compared to the usual 40,000. The government is concerned about this massive decline and therefore allowed a smog insurance for travelers. Insurances can now be purchased in Beijing, Xi'an, Harbin, Chengdu, Guangzhou and Shanghai. If tourists booked their trip through a travel agency and hold out two days in a smoggy city, they can receive up to RMB 350 in compensation.

China to Become the Most Important Market For Consumer Goods According to a study by the consulting company EY, for western brands of consumer goods China will soon become the most important market in the world. The results indicate an historic upheaval for the consumer goods industry. For more than 100 years the industry has adjusted itself to meet the needs of western consumers who make up 58% of the world`s disposable household income. In 2030 this percentage is expected to be lower than 40%, whereas China will increase its share from the current 13% to nearly 30%.

China’s Housing Market Cools Down

Trend of Foreign Direct Investment Inflow (in bn USD) 20

15

10

5 Jan

3 eb ar pr ai un Jul Aug Sep Oct Dec 2014 201 F M A M J ec &D Jan

Source: The Ministry of Commerce of the People`s Republic of China

In China, the housing market is slowly losing its momentum. Price increases slowed down in March for the third month in a row and reached the lowest rate of eight months. In the 70 largest cities in China, new houses increased in price on average by 7.7%. This becomes evident from the data of the national statistics agency. Analysts from the market research institute China Real Estate Society predict that price inflation will continue to slow down during the year, and have stated that this development will lead to a healthy real estate industry. China Opens Bourse for Rare Earths A bourse for rare earth products opened in Baotou to regulate the market for rare earths in the country, improve pricing processes and promote the development of the industry, stated Jia Yinsong of the Ministry of Industry and Information Technology . The bourse will introduce three types of transactions, namely price bidding, listed trading and real-time trading online, with more than ten trading objects such as cerium oxide, praseodymiumneodymium oxide and europium oxide. China has over 90% of global supplies of rare earths and is the world's largest producer and exporter. However, the country has historically lacked pricing power in the global market, and significant fluctuations in the price of resources had a negative impact on Chinese producers. China’s Numbers Indicate Change The days of double-digit growth seem to belong to China’s past. Last year the economy grew by 7.7%, and only by 7.4% in the first quarter of 2014.”In the first quarter the economy begins to calm down which is a good development”, said a spokesman of the National Bureau of Statistics. At the same time the average salary in urban as well as rural areas raised steadily by 8.6%.

Passenger Vehicle Sales in 2013 by Company

Shanghai Volkswagen FAW Volkswagen Shanghai GM SGMW Beijing Hyundai

Dongfeng-Nissan Changan Changan Ford Great Wall Motor Donfen Yueda Kla

Source: China Passanger Car Association China`s Middle Class Is Growing: Distribution of Income per Household (in k USD) 500000 400000 >70 35-70 10-35 0-10

300000 200000 100000 0

2012

2022

Source: EY Rapid-Growth Markets Forecast, Feb 2014 Gross Domestic Expenditure on R&D (in Mn USD) 200000

150000

100000

50000

0

5 06 07 08 09 10 11 200 20 20 20 20 20 20 Source: OECD

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CSR: Getting Better

Demystifying Corporate Social Responsibility in China by JOHN PABON Corporate social responsibility. The concept is nebulous and constantly evolving. At its highest level, CSR embodies the notion that companies should act ethically and responsibly in all their business dealings. The brainchild of Howard R. Bowen, corporate responsibility came into the wider public consciousness following appalling environmental disasters in the late 20 th century. The Exxon Valdez oil spill, ozone crisis and planned sinking of Shell’s Brent Spar oil platform led to consumers pushing for more operational transparency and improved methods of production.

© shutterstock.com

In practice, CSR goes well beyond simply greening operations or giving a charitable donation. It encompasses such varied elements as philanthropy, volunteerism, corporate vision and structure, systems and practices, resource utilization, products and services, employee relations and safety, community relations, supply chain management and overall environmental impact. Typically, a company will begin their work in social responsibility by partnering with a charity or sending volunteers to help with a local community project. Over time, this same company may begin to focus on more advanced areas of CSR like supply chain management or employee relations. The journey is, of course, singularly unique. Some may choose to fully incorporate corporate social responsibility into their proverbial DNA. Others will focus on a particular area relevant to their business.

The altruistic attitude at the heart of CSR impacts internal operations, stakeholders and employees as well as external players like the local and global community. Terms like social responsibility, corporate governance, corporate citizenship and social enterprise, while slightly different in meaning, all relate to the increasing importance of a privatesector company’s larger societal role. Why CSR? For many companies a profit-driven emphasis on the bottom line makes implementation of corporate responsibility programming a tough sell. CSR requires time and money, with a return on investment that is often hard to quantify. Companies that engage in socially responsible practices, whether through philanthropy, human rights work or supply chain management are seeing an increase in consumer confidence, branding recognition and profit. Contrary to popular belief, CSR is no longer a foreign concept for most businesses. According to a 2012 report by NetImpact corporate responsibility has a place on 70% of management agendas in the United States. This same report gauged elements essential to the happiness of employees finding that 53% want a job where they make a broader societal impact. Furthermore, 35% said that they would take a 15% pay cut if they could work for a company committed to corporate social responsibility.

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Companies recognizing the potential of these statistics are beginning to employ the concept of a triple bottom line. Rather than disown the use of traditional profit and loss, this idea embeds corporate and social responsibility into budgets. The triple bottom line often uses the easy-to-remember moniker PPP - people, planet and profits - to describe the focal areas of the practice. For many, employing the triple bottom line is showing positive results. The Disney Corporation reports a 10% reduction in electricity use attributable to more sustainable utilization of resources. This is equivalent to powering three of their theme parks for one year. In 2009, the Coca Cola Company reported a USD 100mn (EUR 73mn) savings as a result of cutting down on unnecessary product packaging. British retailer Marks & Spencer, through implementation of more sustainable internal operations, reported an extra USD 84mn (EUR 61.4mn) profit in 2010. CSR and China: Strange Bedfellows? For many outsiders, modern China’s emphasis on econom i c growth and break-neck development run counter to any notion of corporate responsibility. Others would argue that the Confucian ideals of Yi and Li, or righteousness versus profit, place CSR directly in line with traditional Chinese thinking. Regardless of one’s position, corporate responsibility in China is not only nebulous and evolving but also in its infancy. Practice among Chinese domestic companies can only be traced back a decade or so, with the relationship evolving along three stages. A New Nuisance (1990s to 2000) With the opening up of the Chinese economy more broadly during the 1990s, multinational corporations turned to Asia for lower costs and more lenient regulations. Even so, these MNCs brought with them long-held standards around labor conditions and supply chain oversight. Chinese suppliers were encouraged to incorporate these into their operations, although this met with varying degrees of success. The mood from many was defensive, simply viewing CSR as a new burden applied by the West. Scholarly Observation (2000 to 2006) China’s admission to the World Trade Organization in 2001 sent the cost of doing

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business on the mainland skyrocketing. Operating standards also became more stringent, meaning Chinese companies were required to do more with little additional profit to show. The seminal work Multinational Corporate Social Responsibility and Chinese Society set the stage for academic debate on the topic. The study would form the basis for a CSR with Chinese characteristics codified in the 2005 Company Law of China. CSR as Legitimizer, PR vehicle and Altruistic Ambition (2006 to Today) While rocky, China’s relationship with the concept of corporate responsibility is seen by many as a way to legitimize their business operations. This is particularly true for domestic firms seeking an increased presence oversees. Megalithic state-owned corporations will often use corporate responsibility, according to Moon and Shen, to “…build their social legitimacy by more open reporting on various activities.” The devastating 2008 Sichuan earthquake, which killed nearly 70,000 people and caused RMB 936bn (EUR 109.5bn) in damages, is also credited with an uptick in attention towards societal accountability. Over the past several years, it has become commonplace to acknowledge and report on corporate responsibility practices. A recent Businessweek article notes the increase in reporting among Chinese companies, up from the State Grid’s sole report in 2006 to more than 1,700 nationwide in 2012. True implementation, however, is much more difficult to ascertain. International principles around corporate responsibility, including the International Standard Organization’s (ISO) 26000 guidance points, are much more comprehensive and also on the rise. In fact, China has more ISO14001 environmental standard certifications than the next 10 countries combined. The number of Chinese companies signatory to the United Nations Global Compact, the world’s most comprehensive CSR body, is likewise growing and now stands at 292. Better Late Than Never Although a recent advent, the Chinese Government is starting to consider social responsibility in earnest. Their current focus is on the immediate impact of industrial China on the country’s resources and natural environment. China’s 12th Five-Year Plan emphasizes sustainable methods of

development. It recommends the introduction of carbon trading schemes, energy pricing measures and the promotion of green consumption. In April, Beijing passed its first revisions to the country’s environmental policy in a quarter century. Premier Li Keqiang even declared the amendments a response to “… nature’s red-light warning against inefficient and blind development.” In the first four months after January 2014’s announcement of an increase in factory monitoring 652 companies have been fined a total of RMB 14.4mn (EUR 1.7mn). Overall, these moves signal a shift in stance from one of blind ignorance to active engagement with the country’s environmental and social sectors. Variation and Commonality Organizations’ relationships with CSR can vary considerably. In China, there are three broad categories of companies: some, especially multinational firms and their seasoned suppliers, are well versed in corporate responsibility and exhibit a high level of maturity. A second group are those that have yet to implement any type of CSR programming. The third group, who arguably make up the bulk of Chinese companies today, are just starting to engage in CSR activities. For most companies operating in China, regardless of their relationship with CSR, there are some common focal points. Environment, Health and Safety (EHS) On paper, the government requires companies to emphasize improving these internal elements. The crux of this is to increase transparency in reporting, especially of onsite accidents, provide a hospitable working place and nurture local talent. Supply Chain Monitoring There is the potential for increased cost and risk when supply chains do not function properly. Reports of rights violations and unethical sourcing or production practices can create a public relations nightmare. This is why efficient monitoring is critical for those industries relying heavily on supply chains, especially manufacturing, clothing and automotive. There is a push among parent companies to monitor second-tier suppliers while increasing collaboration and training for first-, second- and third-tier partners. Philanthropic Endeavors A further contemporary focal element of corporate responsibility in China is a move

www.china.ahk.de

from simply giving money to charity towards actively participating in projects or setting up separate charitable organizations. Domestic companies like real-estate firm Vanke, whitegoods manufacturer Haier and computing giant Lenovo are all setting up philanthropic funds to better marry charity with everyday business operations. Challenges and Opportunities Ahead While still in its infancy, corporate social responsibility in China is evolving from a topdown, value-added proposition to an internally driven element of organizational success. Consumers, as well, are increasingly savvy when it comes to understanding their product purchases. They are happy to switch from, and even demonize, brands that might break their trust. The advent of technology, particularly tremendous micro-blogging activity among Chinese youth, is placing added pressure on decision makers to imbue a culture of corporate citizenship into their operations. Even so, barriers still exist to full and complete implementation of responsible practices in China. Internally, organizations

may encounter disconnects between headquarter-office demands and what is feasible on the ground. Influencing feasibility are apathetic or unengaged employees, a lack of local talent with deep knowledge around corporate responsibility or senior managers more focused on bottom-line profits than people or the planet. Strategically, reactive programming must make way for more longterm, localized CSR planning. Global offices dictate many agendas with little accounting of local actions, needs or sensibilities. The Apple/Foxconn relationship exemplifies what can happen with this top-down approach. The small pool of local non-profit organizations with the capacity to partneralso limits collaborative possibilities. On the supply chain, companies looking to build more sustainable operations may encounter a lack of supplier compliance, particularly if monitoring is lax. For some boutique industries a lack of available suppliers exacerbates this issue. In these situations, suppliers have an edge in how they conduct their operations. Little credence may be given to what their corporate partners want. Additionally, multiple levels of bureaucracy are ubiquitous to supply chains,

with increasingly stringent governmental environmental regulations creating more red tape. These barriers can also serve as potential opportunities for companies willing to take up the challenge.

John Pabon is a Shanghai-based independent consultant specializing in marketing CSR- and cause-related endeavors for Fortune 500 companies, governmental bodies and non-profit organizations. His widely read blog, John’s Little Green Book (www.johnpabon. weebly.com), looks at social responsibility in China from an individual, grassroots level. A prolific writer and speaker, John is always happy to engage in a conversation around societal altruism. He can be reached at [email protected].

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BUSINESS | Cover Story

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The Ethical Economy

Doing Good in an Era of Value Crisis

by NICOLAI PEITERSEN & ADAM ARVIDSSON In the Anglo-Saxon world it is difficult to find a large selfrespecting company that does not have a corporate responsibility policy. In fact, spending on such issues has skyrocketed in the last seven years. Many companies partner with NGOs and support social entrepreneurs: with the abundance of new corporate money, this sector is growing rapidly. Many companies now publicly declare that their purpose is not primarily to make money but to save the world, contribute to a more sustainable society, or, more concretely, address the social issues to which their key product is relevant: by, for example, “helping people make informed food choices to improve their nutrition and health,” instead of “selling yogurt.” At the same time, activists are more amenable to working with corporations. Although a lot of this is green-washing, a lot of it is sincere as well. Companies and managers have a wide range of reasons to trash Milton Friedman and his recommendation to focus on profits alone, and to try to become a “Force for Good” (as one successful UKbased initiative is called). These reasons range from the obvious— we are all in the same boat on a sinking planet; public opinion is demanding a social conscience; most people who work in large corporations are conscious moral agents who want to feel that they are doing something meaningful or at least something that is not downright destructive; — to the fact that “green” and “ethics” are great marketing opportunities that can open up new areas of business. How do we Justify Value? At the same time, in the United States, the average CEO earned about 30 times what the average worker earned in the mid-1970s, when income inequality in the United States was at its historically lowest point. Today the multiplier is close to 400. Similarly, the income of the top 1% (or even more striking, the top 0.1%) of the U.S. population has skyrocketed in relation to that of the remaining 99%, bringing income inequality back to levels not seen since the roaring twenties. The problem is not only that such income discrepancies exist, but that there is no way to legitimize them. At present there is no way to rationally explain why a corporate CEO should be worth 400 times as much as the rest of us. Consequently, there is no way to legitimately appeal to solidarity or to rationally argue that a factory worker should take a pay cut in the name of a system that permits

such discrepancies in wealth. What we have is a value crisis. There are huge differentials in the monetary rewards that individuals receive, but there is no way in which those differentials can be explained and legitimated in terms of any common understanding of how such monetary rewards should be determined. Put simply, there is no common understanding of value to back up the prices that markets assign. This value crisis concerns more than the distribution of income and private wealth. It is also difficult to rationalize how asset prices are set. In the wake of the 2008 financial crisis a steady stream of books, articles, and documentaries has highlighted the irrational practices, sometimes bordering on the fraudulent, by means of which mortgage-backed securities were revalued from junk to investment grade, credit default swaps were performed without adequate underlying assets, and the big actors of Wall Street colluded with each other and with political actors to protect against transparency and rational scrutiny. Neither was this irrationality just a temporary expression of a period of exceptional “irrational exuberance;” rather, irrationality has become a systemic feature of the financial system. The Irrational Everyday The reliance on mathematical formulas embodied in computerized calculating devices at all levels of the financial system has meant that the setting of values on financial markets has been rendered ever more disconnected from judgments that can be rationally reconstructed and argued through. Instead, decisions that range from whether to grant a mortgage to an individual, to how to make split-second investment decisions on stock and currency markets, to how to grade or rate the performance of a company or even a nation have been automated, relegated to the discretion of computers and algorithms. While there is nothing wrong with computers and algorithms per se, the problem is that the complexity of these devices has rendered the underlying methods of calculation and their assumptions incomprehensible and opaque even to the people who use them on a daily basis. During the dot-com boom, for example, internet analysts valued dot-coms by looking at a multiplier of visitors to the dot-com’s web site without considering how these numbers translated into monetary revenues; during the pre-2008 boom investors assigned June - July 2014

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the same default risks to subprime mortgages, or mortgages taken out by people who were highly likely to default, as they did to ordinary mortgages. There are few ways in which the nature of such assumptions, flawed or not, can be discussed, scrutinized, or even questioned. Worse, there are few ways of even knowing what those assumptions are. The assumptions that stand behind the important practice of brand valuation are generally secret. Consequently, there is no way of explaining how or discussing why valuations of the same brand by different brand-valuation companies can differ as much as 450%. A similar argument can be applied to ratings agencies that are acquiring political importance in determining the economic prospects of nations. This irrationality goes even deeper than financial markets. Investments in corporate social responsibility are increasing massively, but even though there is a growing body of academic literature indicating that a good reputation for social responsibility is beneficial for corporate performance in a wide variety of ways— from financial outcomes to ease in generating customer loyalty and attracting talented employees—there is no way of determining exactly how beneficial these investments are and, consequently, how many resources should be allocated to them. The fact that we have no way of knowing leads to a number of irrationalities. Sometimes companies invest more money in communicating their efforts at “being good” than they do in actually promoting socially responsible causes. At other times such efforts can be downright contradictory – for example, when tobacco companies sponsor anti-smoking campaigns aimed at young people in countries like Malaysia while at the same time targeting most of their ad spending to the very same segment. Other companies make genuine efforts to behave responsibly, but those efforts reflect poorly on their reputation. Apple, for example, has done close to nothing in promoting corporate responsibility, and has a consistently poor record when it comes to labor conditions among its Chinese subcontractors. Yet the company benefits from a powerful brand that is to no small degree premised on the fact that consumers perceive it to be somehow more benign than Microsoft, though the Bill and Melinda Gates Foundation devotes considerable resources to good causes. The Impact on Ethics Similar irrationalities exist throughout the contemporary economy, ranging from how to measure productivity and determine rewards for knowledge workers to how to arrive at a realistic estimate of value for a number of “intangible” assets, from creativity and capacity for innovation to brand. Throughout the contemporary economy, from the heights of finance down to the concrete realities of everyday work, great insecurities arise with regard to what things are actually worth and the extent to which the prices assigned to them actually reflect their value. This is not merely an accounting problem. The very question of how you determine worth, and consequently what value is, has been rendered problematic by the proliferation of a number of value criteria that are poorly reflected in established economic models. A growing number of people value the ethical impact of consumer goods, but there are no clear ways of determining the relative value of different forms of “ethical impact,” nor even a clear definition of what “ethical impact” means.

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Therefore, there is no way of determining whether it is actually more socially useful or desirable for a company to invest in these pursuits than to concentrate on getting basic goods to consumers as cheaply and conveniently as possible. Consequently, ethical consumerism, while a growing reality, tends to be more efficient at addressing the existential concerns of wealthy consumers than at systematically addressing issues like poverty or empowerment. Similarly, more and more people understand the necessity for more sustainable forms of development. And while the definition of “corporate sustainability” is clearer than that of “corporate ethics,” there are no coherent ways of making concerns for sustainability count in practices of asset valuation or of rationally determining the trade-off between efforts toward sustainability and standard economic pursuits. Thus the new values that are acquiring a stronger presence in our society—popular demand for a more sustainable economy and a more just and equal global society—have only very weak and unreliable ways of influencing the actual conduct of corporations and other important economic actors. More generally, we have no way of arriving at what orders of worth “count.” Even if we were able to make such decisions, we have no channels by means of which to effect the setting of economic values. So the value crisis is not only economic; it is also ethical and political. It is ethical in the sense that the relative value of the different orders of worth that are emerging in contemporary society (economic prosperity, ethical conduct, social responsibility, sustainability, global justice and empowerment) is simply indeterminable. As a consequence, ethics becomes a matter of personal choice and “standpoint,” and the ethical perspectives of different individuals become incommensurate with one another. Ethics degenerates into postmodern relativism. It is political because since we have no way of rationally arriving at what orders of worth we should privilege and how much; we have no common cause in the name of which we could legitimately appeal to (or force) people or companies to do what they otherwise might not want to do. In the absence of legitimacy, politics is reduced to either bargaining between particular interest groups or the naked exercise of raw power. In either case there can be no raison d’état. From Old Values to New This has not always been the case. Industrial society—that old model that we still remember as the textbook example of how economics and social systems are supposed to work—was built around a common way of connecting economic value creation to overall social values, an imaginary social contract. In this arrangement, business would generate economic growth, which would be distributed by the welfare state in such a way that it contributed to the well-being of everyone. And even though there were intense conflicts about how this contract should apply, everyone agreed on its basic values. More importantly, these basic values were institutionalized in a wide range of practices and devices, from accounting methods to procedures for policy decisions to methods for calculating the financial value of companies and assets. Again, this did not mean that there was no conflict or discussion, but it did mean that there was a common ground upon which such conflict and discussion could be acted out. There was a common value regime. We are not arguing for a comeback of the value regime of industrial society. Neither do we accept the argument that the end of values

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(and of ethics or even politics) would be somehow liberating and emancipatory. Instead, we argue that the foundations for a different kind of value regime—an ethical economy—are actually emerging as we speak. The movement toward an ethical economy is driven by deep structural tendencies that are firmly related to the ways in which value is produced in the information age. We suggest that corporate investments in responsibility and sustainability, however sincere, are just a surface manifestation of this. That is, the possibility of an ethical economy is inherent in the development of the means and relations of production. But its realization is contingent on active engagement and political agency by interested actors. In particular, we suggest that a necessary precondition for realizing a more ethical economy is the construction of a new publicsphere, in which diverse value concerns can have a more direct impact on the processes by which economic values are set, and make these processes public in new ways. This article is based on the book “The Ethical Economy: Rebuilding Value After the Crisis”, by Adam Arvidsson and Nicolai Peitersen, Columbia University Press, 2013”. Sources and references can be found in the original publication. The book is due in Chinese in June 2014, published by CITIC Press.

Nicolai Peitersen has founded and cofounded a number of organizations, most recently a new international platform for socioeconomic development, the Hanwang Forum in China. He is the Lead EU Expert of the EU China Urbanization Leadership Program and has written on ethics and the economy, especially during his earlier career at the Central Bank of Denmark and the investment bank JP Morgan in London. He is based in Chengdu/ Beijing and can be contacted at [email protected] Adam Arvidsson teaches sociology at the University of Milano. He has written on brands, the information economy, and cities and creativity. His previous book is Brands: Meaning and Value in Media Culture. He is based in Milan and can be contacted on [email protected]

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Great Chemistry

The Marriage of CSR and the Chemical Industry in China

by MAAIKE E. HARMSEN The chemical industry has made huge strides in productivity over the past ten years. In the same time public tolerance and perception of the chemical industry in China has changed: from acceptance of a certain amount of pollution as an integral part of a developing economy, to restrictions on the opening of new plants, public distrust of chemical companies, and demonstrations against opening and maintenance of new process units. The following article will discuss what a good corporate social responsibility strategy can do to improve the business performance of the chemical industry in China, in various ways. CSR and the chemical industry, if they are open for innovation, have great chemistry together. First we need to consider what a proper CSR strategy would entail, and what a misguided CSR vision gets us stuck with. Then we have to see which key CSR issues are at stake for the chemical industry in China. Finally, we can look at the advantages and opportunities a good CSR strategy has for the chemical industry in China, and the work that still needs to be done here.

sustainable chemical processes. A bad production facility cannot be counterbalanced with good philanthropic behavior. It’s like inhaling bad air and thinking that eating black mushrooms will counterbalance its effect, which is the Chinese way of thinking of the idea of balance. But for a long time this was also the general idea of Western companies who would rather give a little extra to philanthropic causes than look at the waste management, or even do a life cycle analysis of a product to act more responsible. Westerners should also not forget to tell their chinese colleagues that, until late in the 1950's in Europe and in the, public opinion on pollution by the chemical industry was the same as that in China 10 years ago: the smoking chimneys were a sign of our economic development, and we wanted them to smoke—it was a good sign!

What CSR is Not (Anymore)

Some foreign chemical companies are doing well in China. Their business is growing, they manage to attract and retain their employees, and the public has a good impression of their their performance. What is the key to their success? In talking to successful foreign chemical companies in China, four things were evident within all companies. Firstly, these companies had an eye on longevity for doing business in China, and didn’t expect immediate success in all areas. Secondly, they wanted to attract and select engineers who were passionate about their companies’ core (sustainable) vision. Thirdly, they hung onto their international guidelines with regard to safety in the workplace, environmental protection and respect for people. They stuck to sustainable product development and high quality standards in research and development. Fourthly, they sought help in training and advice from peer performers in areas in which they wanted to improve.

In the not so distant past CSR was seen, especially by American and Chinese companies, as a way of doing good separate from the company’s main business activities: a way of contributing to society, or giving back. Philanthropy would be directed to any cause that came up or was on the mind of the CEO, or in response to the demand of local NGOs. Milton Friedman said of corporate social responsibility that the only responsibility the company has is to make a profit. In some ways if we consider CSR to be solely an action plan for philanthropy that has nothing to do with the core business of any company, we lose the meaning of corporate social responsibility: CSR is the responsibility that any company has towards all its stakeholders to perform in a sustainable way. This means that those responsible for the core business of a company – in this case chemical manufacturing and research and development related to it – needs to think about how these business processes can be done in a responsible and sustainable way. We are looking for the right balance, and want to keep in mind people, planet and profit. A Good Sustainable Balance Here an interesting phenomenon sets in: what does it mean to be balanced, in a Western way? It means that the core business itself is sustainable. Research and development should be aimed toward developing a more sustainable chemical product and more

Advantages of a Good CSR strategy for the Chemical Industry in China

These four notions all have a sustainable component to them, as they are the key to these companies’ business success in China. If they had stuck to Milton Friedman’s idea of company responsibility, business would likely not be so good. The 1st Essential for Success: Backup from Headquarters For a foreign chemical company to succeed in China, the headquarters of the company should be willing to openly back up the strategy and June - July 2014

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rules of the operation in China. This is extremely important when it comes to the integrity of the managers operating in China itself. Concerning the safety rules implementation: building a manufacturing plant according to the company international safety regulations will cost more time and more money. But it is essential for the local employees to understand the business model behind the operation: there is no shortcut, this is the way we operate. It will cost more, but this is how it is done; we want to respect the lives of people, and everyone counts in our global company. Avoiding corruption is another area in which support from headquarters is essential. If headquarters knows and is willing to acknowledge the dangers of doing business in China, they will understand the difficulty of getting a permit or license to operate if the managers on the ground follow the international rules of the company not to bribe. The headquarters have no special right “not to know:” rather, they have an obligation to know. It may take more than three years, said one manager of a Western chemical company, before a Chinese colleague truly understands that our company really does not want to be involved in bribery. And if I make one mistake, he said, all is lost. The goal is not for there to be only a little corruption; there can be no corruption at all. This means that headquarters must understand that some permits take two years to acquire while other competing companies can obtain them in two weeks. The 2nd Essential for Success: Strong HR and R&D When recruiting talent, a company that already has a strong CSR and sustainability strategy will attract the people who want to work on

strengthening this strategy. One young female engineer said that she dreamed of making China a greener and healthier place when she was twelve, and now that she was working for company X, she was living that dream. Hiring people who just want to make money as quick as possible gives you high turnover—there is always a company with a slightly better deal around the corner, and loyalty based on salary does not go very deep! Highlighting hiring the right people for the right reasons as an important strategy for a chemical company also shows the importance of how people think and manage in a company: this is where the ‘social innovation’ factor comes into play. Social innovation is the process and the open mindedness within a company that people need to think up new ideas, experiment with them and set them into practice. In the chemical industry research and development is a large component of the company’s core business, but without the willingness from top management to invest and nurture social innovation, people do not have the space to create innovative ideas, which is already a challenge in China. For a sustainable strategy, an essential ingredient is to be able to be innovative. Sustainable product lines and manufacturing pay off in the end in research and development: this is the way forward in China, the advantage and possibility to jump into the demand in the coming years for companies with excellent performance on environmental and safety standards with innovative manufacturing and product lines. The 3rd Essential for Success: Cooperation Beyond Company Borders But there is still homework to be done: although it often pays off to be a sustainable chemical company in China, others in the market have the business advantage of some form of protection (or lack of inspection) when operating in China. Here the chemical industry associations should step in, not just to tell the national government to step up on enforcement of environmental protection laws, but also to maintain a higher standard of quality in safety and sustainability for all members of the association, and foster this through joint research and training initiatives. Leveling the playing field by obeying the rules is not enough: learning from each other (pre-competitive knowledge) to add sustainable value to the overall sector would benefit all association members as well as society at large. Summary

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What a good corporate social responsibility strategy for the chemical industry in China could mean? A sustainable chemical industry with an open eye for innovation will help build up China to become a balanced and harmonious society, a China that produces safe, affordable and sustainable chemical products for China and the world. This CSR strategy will add the best value to society; in a most impactful way the chemical industry can be of use for China and the world.

Maaike E. Harmsen, MA, graduated in 2002 and then worked for Shell Chemical Technology Europe as an advisor internal/ external affairs. She has worked since then in Indonesia, Netherlands and China. She is currently owner of Eline CSR limited Hong Kong, a branch specific CSR training and advice company. She has lived in China since 2010.

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The View From the Workshop

Mapping German Companies and their Engagement in Society in China by KATJA HELLKOETTER AND MAGALI MENANT The societal and environmental divide is growing in China. Drastic air pollution levels are just one alarm signal. It is commonly acknowledged that current methods of engagement between companies and further stakeholders in society are no longer sufficient to solve increasing challenges, and that social responsibility demands a different level of cooperation between the sate, the private sector and civil society.

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In the end of 2012, the board of the German Chamber initiated the workshop called “Business & Society” (BuSo) which offers information exchange and networking opportunities around social engagement. Eight sessions have been conducted since then, gathering a wide variety of stakeholders. The workshop gave an opportunity to start mapping what social responsibility means to different German companies in China, observe current trends in the landscape as

well as understand what defines German engagement in China. The following are some early observations gleaned from this process. Reasons for Engagement The scope and approaches to social responsibility (SR) of companies that participated in the workshop are far reaching. Some, mostly larger companies, clearly view SR as a cross-functional program and

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Thus, reasons and motivations are diverse, ranging from fundamentally human and moral obligation to acknowledging the simple necessity of collective action with regard to global challenges such as environmental degradation and climate change. Furthermore, CSR is also seen as a tool for image and reputation, in order to enhance relations with local government. The example of Dunker Motoren in Taicang showed that for small companies who do not benefit from a well known brand SR can be a successful strategy to create better relationships with the government and anchor better in Chinese

society. At the very least, CSR may be compliance driven. Certain external political frameworks are also conducive toward the implementation of SR. Some of the bigger companies, such as BASF for example, relate their CSR and sustainability strategies to policy frameworks such as the UN global compact, further encouraging good governance. The German government has also set up the “National Sustainability Strategy ” (2002), which includes an action plan for CSR with a set of voluntary policy measures, and is trying to promote “CSR made in Germany” as a label. This initiative has so far not been exported to China yet: however, a social policy dialogue between the German and the Chinese government started in 2013, with the aim to share thoughts on social inclusion of people with disabilities in the workspace. The Areas of Engagement The variety of activities and topics that participants brought to the workshop underlined that SR is a multidimensional topic: it encompasses not just social issues in a narrower sense and not just charity, but a variety of thematic issues at the interface of

‘Most companies remain stuck in a “social responsibility” mind-set in which societal issues are at the periphery, not the core.’ Michael E. Porter, Bishop William Lawrence University Professor at Harvard University the company, the environment, the society and its people. Themes under the umbrella of corporate social responsibility include labor and employment practices (health and safety issues, employee wellbeing, morale and satisfaction, diversity etc.), environmental issues (e.g. resource efficiency, climate change, product life cycle assessment etc.), corruption and bribery challenges, social and community concerns (engagement with the neighborhood, etc.), and employee engagement (ethical or cultural concerns that can result in employee volunteer programs, charity projects etc.). General Trends in the Industry

© Illustration by Florent Courtaigne, produced during the VISION DAY, Dec 2013

systematically integrate into the core business strategy, from corporate management to employees, customers and suppliers. We saw this in the example shared by BAYER China in one of the workshops. For others, especially SMEs and family-owned businesses, SR often is an extra charity activity on top of the business, but nevertheless ingrained in the company culture, and driven by the owner’s “intuitive” sense of being a responsible citizen. One such example was reported by Freudenberg’s Shanghai head, who initiated a still ongoing charity and employee engagement project in response to the Sichuan Earthquake.

Traditionally, activities branded as corporate social responsibility (CSR) used to strongly focus on philanthropy. However, companies realize that giving money to a charity is a good thing, but that the real question should be what activities can be of more impact to the business as well as lead to more scalable change for society. Thus, approaches toward social responsibility in companies are evolving. Understanding of the CSR concept has also been enhanced by comprehensive definitions from internationally recognized agencies such as the International Standard Organization or the European Commission. These new definitions describe a comprehensive stakeholder’s approach and corporate governance system aware of its impact on society and the environment. While ISO 26000 offers processes and tools to implement CSR across a business, few companies however apply the standard to its whole extent, as TUV Rheinland discussed in one of our workshops.

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Some even argue that CSR is an outdated concept, as it is either too complex to implement or is in most of the cases misunderstood and not related to the core of the business. In the future, companies shall ask: how can we turn a social challenge into a social business? Concepts such as social innovation or shared value aim at just that: according to the European Commision, social innovation can be defined as “new ideas (products, services and models) that simultaneously meet social needs (more effectively than precious alternative) and create new social relationships or collaboration.” This came across as an important new trend during the several workshops hosted at Gongyi Xintiandi, Shanghai’s first Social Innovation Park. The VISION DAY, which was initiated by NPI, GIZ and Constellations and supported by SAP, Friedrich Ebert Stiftung, Swissnex as well as the German and the European Chambers, is an example of how to create the right environment for investigating and designing potential collaboration across sectors.

“No major problem can be solved by government, by the business sector, or one community alone. Complex social problems have multiple stakeholders who are all part of the problem and who generally must all be part of the solution. Gaining that cooperation among the disparate stakeholders is the toughest challenge of all.” Jeffrey Sachs, economist, Harvard professor 24

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A driving force for companies looking at better integrating CSR efforts into their core business includes the questions: how can community engagement help drive business innovation and open new talent pools? A Growing 3rd Sector The 3 rd sector, composed of non-profit organizations or enterprises with a social or environmental mission, is gaining ground in China. For NGOs that have until recently fully relied on donor and charity structures, social (non-profit) business models are more and more recognized as a way out of dependency on project based funding. For instance, the non-profit organization Dialogue in the Dark and the social enterprise Solar Ear are good examples of this trend to strive for financial sustainability. Furthermore, Chinese government foundations are in a restructuring process to seek for more transparency and accountability to engage with public and private companies, as we learned from the Shanghai Soong Ching Ling Foundation. Social entrepreneurship is increasingly becoming a career option for young – often internationally educated – Chinese who seek a more meaningful professional path and who feel responsibility at the individual level. The career path of Ms. Ding Li, VP of NPI – Non Profit Incubator, which took her from corporate MNCs to governmental institutions towards the NGO world, illustrates this trend. However, social enterprises – often still very small in scale – face many hurdles, from access to finance, to finding the right operational, legal and business model, to building up management capacity. Last but not least, the question often is: how can an organization scale up and create sustainable business models that both provide for financial stability and a good living for the entrepreneur as well as having a positive impact on society. In the Government and Policy Sphere For 20 years, the Chinese government – alongside foreign organizations – has been promoting the concept of CSR within the Chinese industry. Chinese companies are now embracing CSR practices which were formally lead by foreign MNCs, with an ever rising amount of companies joining global reporting efforts. The range of concerns has also been broadened from an initial focus on compliance and quality in the supply chain. The GIZ – Deutsche Gesellschaft

for Internationale Zusammenarbeit – has worked over the past decade hand in hand with the Ministry of Commerce and their many multipliers towards a dissemination of best practices, tools and methodologies for CSR, and reached an impressive number of Chinese stakeholders. Furthermore, the government is increasingly acknowledging the 3rd sector as a “service partner” in solving societal challenges together, and seeks to provide the right framework and policy support. As mentioned earlier, the Shanghai government’s civil affairs office has set up China’s first incubator for social entrepreneurs to support new types of social business collaborations, Gongyi Xintiandi. However, a key challenge still remains: to shape the right support mechanisms, including policies, regulations, incentives and also standards related to the definition of social business. The Role of German Industry What role does German industry play in this landscape? What are some defining characteristics of the German community’s engagement with society in China? German industry benefits from a good reputation, which supports employee retention: German companies generally have lower turnovers than other foreign companies in China. Furthermore, it is embedded in a larger context of good bilateral relations between Germany and China. One of Germany’s strengths in the area of SR is that it is well known for environmental and technical excellence as well as for its innovation culture. German traditional values and concepts such as the “honorable merchant” and the “responsible businessman” are also inherent in many German company cultures. However, despite the good image of German SR, German companies at large are less visible in China compared to the US or UK. In terms of social responsibility, there are a lot of ongoing projects by individual German companies, but so far there is a lack of capacity and good concepts to use synergies; the scaling up of small initiatives is challenging. There are also many opportunities for German companies in SR. More and more companies realize that SR is a way to develop and engage with talent within the enterprise but also outside with education institutions. SR is also a way to tap into open innovation, to source ideas from outside the company, as was demonstrated

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and discussed in the recent BuSo workshop hosted by SAP Labs China. Gaining and maximizing trust through SR can be seen as a precondition for business. However, SR in China can be a difficult landscape to navigate for companies, due to the legal frameworks, systemic boundaries in China as well as different approaches to engagement with civil society or government. Conclusion Engaging in society as an individual company is time consuming and tedious, from finding the right partners to managing the partnerships. Many companies are looking for new models to engage volunteers and spice up their internal culture, as well as developing intrapreneurship and innovation cultures. Companies also state a need for capacity building for cross-sectorial cooperation. Skills and competences for managing stakeholder engagement are missing. Until now, the BuSo workshop has offered an information and best practice sharing platform; as the ‘SWOT’ analysis conducted during one of the workshop shows, German industry in China has the opportunity to

reach out further, scale the impact of individual activities and complement is existing good reputation with better visibility around responsible citizenship. Joint action is to be wished for. In the future, one direction for the workshop will be to go from exchange to collaboration. Further open questions remain in terms of more thoroughly investigating the activities of the German Mittelstand in China. Therefore, this “mapping” of social responsibility of German companies in China will be continued and extended through future Chamber workshops as well as in the frame of a more comprehensive study with the support from Bertelsmann Stiftung starting in June 2014.

Katja Hellkoetter and Magali Menant are co-owners of CONSTELLATIONS international, an agency based in Shanghai offering ideas, concepts and management for learning, creating and collaborating between Europe and China. CONSTELLATIONS’s special fields of expertise are: multi-stakeholder dialogues, learning programs and collaboration facilitation around the themes of sustainability, creativity and innovation cultures, urbanization and cities. They have more than 15 years of experiences working at the interface of business and society: Ms. Hellkötter has been the Chief Representative of the City of Hamburg in Shanghai, and Ms. Menant has been the Head of ECONET China. Ms. Hellkötter also moderates the Chamber’s workshop on Business & Society. Contact: kh@ constellations-international.com www.constellations-international.com

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Talent is Everywhere

Royston Maldoom on Dance, Community, and Social Justice

by CAITLIN WAGGONER dance artist-in-residence at exactly the time that the concept of community dance was emerging in the UK. The appointment of a dancer/choreographer employed by a regional council was innovative and attracted a lot of attention. Because of the support within the region – from arts organizations, social services and formal education – we experienced extraordinarily rapid development. There were already many people working in the arts in communities but they did not have access to the kind of financial and media support that was available to me and my colleagues. Anyone who has read my autobiography will know that I fell into the work by chance, with no idea that I would enjoy it so much and without any of my later understanding of the benefits of dance to ordinary people and communities. That awareness grew as I extended my work into more and more areas, both in terms of where I worked and who I worked with. Royston Maldoom is a highly respected veteran of the dance world, having worked as a choreographer for over 40 years. However, he has never been satisfied to remain within the sometimes insular worlds of dance and art: instead, he has dedicated his life to bringing dance opportunities to communities and individuals around the world, regardless of their age, race, ability or class. A native of London who lives in Berlin, his work has been the basis of a feature-length documentary, and he has received the Order of the British Empire from Queen Elizabeth II for his "Service to Dance." This year his dance project “Sacre du Printemps” will be performed by a group of Chinese and German children in Shanghai. His decades of experience in using art to reach out to the world’s underprivileged people have made him a true expert on exploring new ways to think about social responsibility. You’re considered a pioneer of the concept of “community dance.” Where did this concept originally come from? What motivated you to dedicate yourself to community dance? I believe that came about not because I was by any means one of the first dancers to work with non-professionals outside the mainstream theatre world, but because I was appointed officially as a full time community

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Do your individual projects mainly begin from a desire to make a specific artistic statement, or to work within a specific community? Definitely the desire to work with a specific community or for organizations I want to support. Nearly all of my work also involves making an artistic and – often more importantly – a political statement, although I hope to avoid making propaganda. Part of my aim, particularly in working with young people, is to awaken their minds to important issues as well as the joy and power of contemporary dance and classical music. What do community members gain from their participation in art projects? What do you hope that children and adults who participate in a project will take away from it? This is such a big question, with so many answers that books have been written about it and many documentaries made. Let us start with: raised self esteem, better awareness of others, increased socialization, emotional awakening, rigorous cognitive and physical training, self discipline, focus, and learning how cooperation can lead

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to greater and more satisfying achievements than competitiveness. From performance comes pride, peer group approval and recognition. In the case of many of the marginalized people I work with, - people on the receiving end of social services, people within the criminal justice system, or people receiving support from aid organizations and NGO’s – they experience a transition from being the eternal beneficiary to being a benefactor. They are giving their best to enhance the lives of the audience members. Parents’ feedback is nearly always positive. They say that their children become more responsive and communicate more in the home. Teachers report better and more social behavior in the class room and a more positive approach to learning. What do you as an artist gain from non-dancers’ participation in your projects? Artistically it is immensely challenging to seek to create a good performance with people who do not use the same dance vocabulary as oneself. I rarely know who is going to be in my piece; their abilities and attitudes. Often I don’t know the ages of the participants or their personal backgrounds. This means that I have to work in the moment and rely on instinct and intuition, creating the movement with the dancers in the present. I find that enormously exciting. It makes my blood race, stimulates endorphins, gives me enormous energy and releases my passion. Beyond that I get to interact with people of all ages and abilities, of many ethnic, social and economic backgrounds, of all faiths and belief systems. I feel like a citizen of the world. Some of your projects, such as “Danza De La Esperanza” in Peru and the ADUGNA Dance Project in Ethiopia are based in very poor communities. What would you tell someone who questioned why money should go to arts programs in these communities rather than to other types of aid? It should be ‘as well as’ rather than ‘instead of.’ There is a lot of money in the world; enough to end world poverty tomorrow. Specifically, it is about giving people belief in themselves and an awareness of their own ability to make bring about change. For many people, isolated in poverty it can be a chance to interact with others in a deep and meaningful way, it can be fun and a chance to play, something which so many of us in better circumstances take for granted as a right. It puts a means of production, in terms of human communication, that is often missing from people who even if given the opportunity have lost the ability to vocalize or verbalize their situation and experience. In my case it has very often drawn the attention of those who are in a position to make a difference, to the wealth of talent that is wasted in our society through poverty, lack of opportunity and marginalization. This is particularly true with street children, for instance, or people with severe disability who, despite being neglected or dismissed by the able bodied population, are shown to be people with enormous potential with much to offer the ‘non-disabled’ world. I don’t like the term non-disabled: there are no non-disabled people, but I hope I am understood here. In situations where the communities are polarized, often dangerously so, participatory community dance and arts activity can cross borders, break down barriers and lead to greater cross cultural understanding and empathy. This is particularly witnessed in my work over the years in Northern Ireland, in South Africa, during the Baltic and Balkan crises, and with refugees, asylum seeker, families in exile in often unwelcoming unfamiliar situations.

Can you tell us a little bit about the upcoming project in Shanghai? Why did you choose Le Sacre du Printemps? One important reason was that I was asked for a piece but knew I would not be free to create it myself. Luckily I have two excellent professional colleagues, Mia Bilitza and Volker Eisenach, who as well as being consummate artist and teachers themselves, have worked with me on recreating Sacre in Germany, new Zealand and Palestine and know every detail of the work. This enabled me to offer a work without needing to be present. My spirit will be there of course. Mia, Volker and I have the same basic approach to the work and the same underlying philosophy. If someone outside of the dance community was inspired by your work, how could they become involved in your projects? As participants they just have to find out where I have projects and see if they fit the criteria – school based, community, mixed age etc. often we also need local helpers, sometimes it is possible to observe one or two rehearsals although that has to be limited. it is important to realize, however, that people know about me through the enormous interest created by the film and subsequent media coverage after the project with sir Simon Rattle and the Berlin Phil. Meanwhile there are many people in Germany, Europe and internationally doing great work – work I learn from and often wish I could aspire to. It just need a little research. Volker does great work in Berlin and further afield, Mia in NRW and internationally, also Tanz-Moto with Mohan Thomas in Essen, Resi-Dance in Detmold and De-Loopers in Bremen. These are just a few that come to mind that are excellent – and in the UK, especially Scotland but overall there are many great projects - Holland, France, Austria (Tanz Die Tolerance, Wien): the possibilities are endless and growing every year. Your work is very different from more traditional forms of charity or social work. Do you have any ideas about how companies and businesspeople could rethink their approach to community involvement? I have been involved with many AID organizations and ONG’s. It is my opinion that very often money is wasted. Projects are imagined somewhere in Europe or the USA and then advertised so that people and indigenous organizations have to apply with projects tailored to match the donors criteria. I think a little money could be used sending observers discreetly into places where there is perceived need, to see what is happening on the ground. I can think of two dance projects now directed in developing countries. They are very similar – one costs several hundred thousand pounds a year, the other thirty thousand. It is about targeting. Organizations wishing to donate to causes could do more research into the efficacy of the arts in helping to improve social and economic problems; also the role of culture in bridging the gap between communities and nations. I think the lack of interest in funding cultural projects arises out of ignorance. There is a lot of research material, many examples of good arts practice helping to improve lives and impact positively on communities. They don’t have to be big. I am always asked what can dance bring and I don’t know why – the evidence is out there if people would just take a little time to search for it. It isn’t just in the developing world (an inadequate and sometimes misleading term I admit) that arts projects struggle. In Europe politicians also fail to grasp the nettle and understand the value of cultural education and activity, whether in the formal or informal education sector. Mr. Maldoom, thank you for your time! June - July 2014

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Social Innovation The Newest Face of CSR

by ALEXANDRA VAN DER PLOEG and DEIRDRE WHITE Economic growth in China is no longer sustainable. There is a desperate need to address widening wealth gaps, social divides, environmental pollution, inequitable access to health care and more. Cooperate social responsibility plays a more and more important role in China. Many companies believe that it empowers businesses to run better and more sustainably while improving people’s lives. It helps to create a continuous positive impact on the community and expands NGO capacity with knowledge through mentorship and employee volunteering program. For example, donation to Communications University of China’s solution for NGOs improves governance and establishes trust in China’s social sector research on use of IT in China’s non-profit sector to enhance operational efficiency. Social Innovations are novel solutions to a social problem, which are more efficient, effective and sustainable. It can be ideas, strategies, philosophies or organizations that meet unmet social needs. The innovation initiative was also launched in China, As Hu Jintao, the former President of China, noted in July 2011: "To ensure that people live in peace, social harmony and stability, we need to enhance and innovate in our public administration, improve the party’s leadership and the government’s responsibility, and foster public participation in the management of society.” Inclusive growth and innovation in the management of society is fast becoming the government’s mantra. As Hu Jintao has also noted, there is a need for innovation and a vibrant non-profit sector to ensure social harmony and political stability. The Four Trends in Social Innovation According to FSG, a nonprofit consulting firm, there are four trends in social innovations. First is the strategic evaluation, designing systems of collecting and sharing data which lead to actionable change, improved organizational effectiveness, and ultimately, social impact.Typically, strategic evaluations attempt to see past the obvious factors that influence short-term plans, and seek a more dynamic study of the trends that will dictate the future success or failure of the company. Like a chess match, strategic evaluation succeeds when companies are able to accurately analyze and predict several moves ahead into the future, in order to best tailor their present policies. The second trend is collective impact, which brings diverse organizations together in a highly-structured manner with a common goal of making a true impact on a complex social problem. Collective impact is a significant shift from the social sector’s current paradigm of "isolated impact,"

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because the underlying premise of collective impact is that no single organization can create large-scale, lasting social change by itself. There is no "silver bullet" solution to systemic social problems, and these problems cannot be solved by simply scaling or replicating one organization or program. Strong organizations are necessary but not sufficient for largescale social change. Third is catalytic philanthropy, which is to use multiple tools beyond check-writing and work with multiple partners to take an active role in bringing about transformative change. It could include activities such as taking responsibility for achieving results going beyond thinking about which organizations to support and instead thinking about how to solve a social problem; mobilizing a campaign for change, empowering stakeholders and creating the conditions for collaboration and innovation; using all available tools to create change, including unconventional ones from outside the nonprofit sector, and creating actionable knowledge to improve their own effectiveness and to influence the behavior of others. The fourth trend is the shared value. Shared value is an approach to meeting business objectives that creates a competitive advantage for corporations through innovations that address society’s needs and challenges. It is not social responsibility, philanthropy, or sustainability, but a new way to achieve economic success. A company’s opportunity to create shared value is unique to its business model and the social conditions that surround its operations. Shared value creation starts with a deep understanding of social problems and their connection to a company’s business. Challenges for Global Companies Today Finding tomorrow’s leaders is one of the biggest challenges facing global CEOs today. According to a recent survey, 93% of CEOs acknowledge that they need to change their strategies to attract and retain new talent (previous surveys have indicated the same realization), but less than a third have acted on these plans. Moreover, CEOs are concerned about finding employees who can adapt to new, fast-developing markets in Africa and Asia. Over the next year, 74% of CEOs expect to pursue opportunities in Africa. Meanwhile, another recent survey found that 84% of Millennials care more about making a positive difference in the world than workplace recognition. This has come a long way from earlier generations that often prioritized career advancement. Clearly, these trends indicate it’s time to fundamentally rethink the established approach to talent strategies.

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Shared Value – the New Face of Leadership In an effort to meet these challenges, the technology and software solutions company SAP started what it calls a Social Sabbatical program, which sends high-performing employees into emerging economies. During these pro bono assignments, employees support entrepreneurs, NGOs, and government agencies, with the aim of positively impacting the regions economically and socially. They also gain a better understanding of how to effectively operate in these geographies. The program was launched in 2012 and initially catered to three countries - Brazil, India and South Africa – with 30 employees. Beginning in 2013, the program has been extended to cover entrepreneurs in China. The company, by investing more than USD 2bn in the next couple of years, aims to create a broader presence in the emerging economies like China, which are growing more than 2% every year. Developed in partnership with PYXERA Global, the program strives to solve business challenges – specifically for the education and entrepreneurial sectors in emerging markets – while strengthening the participants’ leadership competencies, cross industry sector know-how, and intercultural sensitivity. Employees leave the daily routine of their jobs to spend a month with a host client. We’ve seen this experiential learning foster a cultural shift toward next-generation thinking—it infuses future executives with the type of creativity they need to problem-solve in an entrepreneurial setting. It also fortifies the capacity of organizations in emerging markets, by introducing new skillsets and approachesto their business and operational challenges. “The challenge is unique, and quite frankly something of an uphill battle -to revitalize an entire district. But that is also the beauty of it.” This was said by Senta, one of Chinese employees who participated in the program. “A very tough challenge worth exploring, thinking, obsessing about – with the outcome that we were able to forge a path in which the district can change from an abandoned location to a thriving one. In essence we are helping stop the decline of a district and turn it into a place where the resurgence and revitalization could lead to lots of opportunities for the community as whole. Being able to change this perception, the perception of decline and abandon into a galvanized, energetic and ‘up and coming’ community is something that is really inspiring.” From the survey, 100% of participants agreed or strongly agreed with the following statement: “After my Social Sabbatical experience, I am more motivated to perform in my work at SAP.” 93% of participants agreed or strongly agreed with the following two statements: “My Social Sabbatical experience positively changed my perception of SAP as a corporate citizen,” and “My Social Sabbatical experience made me more likely to tell others about SAP.” Using the Lean Startup Method Entrepreneur and author Mr. Eric Ries’ phrase, “build, measure, learn” articulates a new approach to innovation in the start-up context, and his Lean Startup method has proved useful to SAP and PYXERA Global’s work in emerging markets. The concept suggests that entrepreneurs build out an idea, measure how customers respond, and from there, learn whether to pivot or preserve. It has provided a roadmap to thousands of entrepreneurs who operate in an environment of uncertainty. This is not dissimilar to the design-thinking principals that SAP uses as the foundation for an approach to innovation. Employees’ methods for problem-solving includes failing early and working in small teams. The

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sabbatical takes these approaches to innovation—along with employees’ expertise—and puts them in a new context, where the rules of engagement around business and culture are different. A social sabbatical team’s first week in-country is dedicated to immersion—observing the business, social, and cultural climate of the new organization. Despite months of preparation and pre-defined project parameters and scope, the team may drop their initial ideas and change direction based on their experiences during the first week. As they begin to better understand in-country realties—which may include weak electrical grids or limited infrastructure and transportation systems, or, conversely, more-sophisticated capabilities than they originally envisioned—employees learn to “build, measure, and learn.” At Endeavor, for example, the SAP team quickly determined that the project outcomes it originally set were unachievable within four weeks. In the first few days, the team interviewed mentors and investors throughout South Africa to better understand the situation, then redefined their deliverables and focused on two critical needs. This kind of experiential learning is critical to building a next generation of business leaders who know how to operate across regions and cultures. It also allows millennials to bring their values to work with them. Now in its third year, the program has evolved and the company is focusing its efforts on maximizing impact by sending new teams to the same host clients repeatedly. By sending multiple teams to the same organizations, individuals learn more about them from collective experience, and in turn, have a deeper impact on those organizations. Innovation Driver - Doing More with Less To drive innovation, Mr. Ries emphasizes failing fast in order to gain product and service insights, rather than fulfilling pre-determined requirements. Local organizations are often run by just three or four people, who each have three or four jobs and limited budgets. In the dayto-day, these organizations must adopt an innovative frugal mentality that is completely different from what is required to process information and solve problems with large teams and multi-million dollar budgets. Experiential learning teaches participants how to take risks with limited resources and fewer established business processes. It also meets the increasing expectation of the next generation that they will be able to bring their values into the workplace. As the business landscape evolves at an even faster pace, having a talent bench of future executives with this type of experience is invaluable. Alexandra van der Ploeg is interim head of global CSR at SAP. At SAP since 1999, she was originally in charge of management development at SAP Switzerland and later held various managerial positions in human resources. For the past four years, she has managed global corporate social responsibility (CSR) programs at SAP, including the SAP Social Sabbatical initiative. Deirdre White is CEO of PYXERA Global (@PYXERAGlobal) and an internationally recognized leader in the field of economic development. She spearheaded the growth of best practices in Global Pro Bono to benefit global corporations, local governments, and nonprofits worldwide, and guides companies such as IBM, SAP, PepsiCo, and Pfizer as they provide pro bono expertise to build the capacity of organizations in developing economies.

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Social Entrepreneurship Individuals Rethinking Business by DING LI In the past few years, social entrepreneurship has become more than a buzzword in the third sector. Globally, many multi-national companies also incorporate this notion in their CSR programs. Traditional charities focus on spreading the kindness by simply giving money to the people in need or building up facilitates such as schools and hospitals, in disaster relief it is proven to be highly effective, however when it comes to poverty alleviation and sustaining positive impact on vulnerable groups, just charity is far from enough. To solve the core problem of poverty and vulnerability, and to bring community cohesion, we need a different solution: helping people to help themselves with cross-sector collaboration among private sector, NGOs/ social enterprises and government agencies. Evidence has shown that no single sector or institution can solve profound societal challenges such as poverty, the aging population and social injustice. We need to work together, but often innovation and cross-sector collaboration are driven by the third sector – social entrepreneurs from NGOs and social enterprises. This is the essence of social entrepreneurship, although there is no consensus on the definition of social entrepreneurship yet. What is a Social Entrepreneur? According to Wikipedia: A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact he or she has on society. A social entrepreneur identifies and solves pressing social problems and unmet needs caused by market failure and government failure. Social entrepreneurs are the change agents for society, turning problems into opportunity and seizing opportunities others miss, they are devoted to generating “social value” rather than profits. However, unlike traditional charity, social entrepreneurs are not afraid to use market mechanisms to serve the people in need, and often develop and sell products and services to the market, even to the people coming from the bottom of pyramid. The social entrepreneur never sees the underprivileged people just as passive beneficiaries. Instead, they are treated as customers and major parts of the solution. A particularly good example of an innovator associated with the term is Professor Muhammad Yunus. Professor Yunus is the founder of Grameen Bank, which pioneered the concept of microcredit for supporting innovators in multiple developing countries in Asia, Africa and Latin America. For helping tens of millions of rural women to get affordable loans and move out of poverty, he was awarded a Nobel Peace Prize. Social entrepreneurship also has close ties with the Corporate Citizenship movement. There are more and more companies realizing that they belong to the local community where they operate, and will benefit in the long run if they can contribute to the prosperity and resilience of the local community. What CSR can do now in China is much more than to donate to Hope Project to build more schools in rural areas and to China Red Cross for disaster relief. Instead, they can work with NGOs and social

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enterprises on many innovative approaches to target urgent and pressing challenges the local communities are facing. In the past few years, under favorable policies from both central and local government, grass-roots NGOs and social enterprises - especially service providers for community and vulnerable groups - are booming in major cities. For example, in Shanghai there were only two grassroots NGOs in 2004; now the number is approaching 500. The following are some good examples of Shanghai’s social entrepreneurs and their projects. All of them are based in Gongyi Xintiandi, which is China’s first ever social entrepreneurship incubator. Shanghai Zhiliao Philanthropy Cultural Communication Center Ms. Tang Tao is a polio survivor who has difficulties walking, but she still managed to finish her college education, and went on to work for HSBC as a senior executive for many years. Today, she is the cofounder of Shanghai Zhiliao Philanthropy Cultural Communication Center, which provides job and cultural communication training for physically challenged people. Zhiliao not only provides internships and job opportunities for disabled people to work for call centers, but also helps them to start up E-commerce businesses such as Taobao Shops. In addition to providing job opportunities, Zhiliao has also established an art troupe for disabled people and organized dozens of art performance in many cities. They also organize special tour groups for handicapped people with the help from many volunteers. Solar Ear Founded by Mr. Richard Lytle from Canada and Mr. Blade Tang from China, Solar Ear is a typical social enterprise focusing on equal access to communication, education, and employment for hearing impaired people. They assist deaf people in developing career plans, encourage the hearing impaired to become social entrepreneurs, host hearing protection lectures for the general public, and teach Chinese sign language to anyone who wants to learn. They have also set up a hearing solutions company that makes high quality and affordable hearing aids for children and older adults so that they can have equal access to communication and improved opportunities for a better education, meaningful jobs, and inclusion in society. Most of Solar Ear’s employees are deaf, and all employees, deaf and hearing, can communicate using Chinese Sign Language. Solar Ear shares its profits to promote community development projects benefiting deaf people and Chinese society. Solar Ear’s main goal is to help the hearing impaired better immerse themselves in society. HeLing She Art in Community This is an organization encouraging the local community to come together and learn about nature in the city, founded by a young couple who majored in art history and design. They encourage people to engage and interact with their

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neighbors and collaborate with artists and local designers within community, and also spend great efforts to record and study disappearing rural villages in a hope to preserve rich cultural heritage. Sinoaid Healthcare Group Sinoaid Healthcare Group hosts CPR trainings, CPR classes, and CPR events at The NEST in Gongyi XinTianDi and its neighboring community. They train volunteers in CPR skills who will then provide this service to resident organizations at The Nest. Sinoaid also offers first aid training to disabled people in order to help them protect themselves in case of injury. Shanghai Xin Qing Community Service Development Center supports the disabled, elderly, and mentally challenged members of society. They work closely with the Yang Guang Family House. At The Nest they provide training to the mentally-challenged by producing teddy bears which are then sold at The Teddy Bear Cafe in Tianzifang. The employees are recruited by Yang Guang Family House, and each year ten employees will be included and trained in the program. Xin Che Jian A Hackerspace program housed at The NEST in conjunction with Escel, Xin Che Jian works to cultivate social entrepreneurs. Hackerspaces are communityoriented physical places all over the world where people can meet and have fun on their projects. Hackerspaces provide environments for people to learn and tinker with technology, work in teams, and participate in international competitions. Xin Che Jian is the first of many Hackerspaces in China. They even have a 3-D Printer! Hacker space at Xin Che Jian’s long term goal is to spread the Hackerspace concept and philosophy across China and inspire Hackerspaces in every large city from East to West. World of Art Brut Culture Founded by Mr. Miao Shiming – an artist and a famous curator in his previous life, WABC (World of Art Brut Culture) harness the talent of young people with mental disabilities through art, physical exercise, life skills, and creating ways for the general public to connect with. WABC recruits young artists as volunteers to provide training programs for mentally challenged people, extracts the key elements of their painting and then applies for a patent for the graphic design. Through this innovative way, they are not only helping talented young people with mental disabilities to get more income, but also educate the general public to change their attitude toward them.

NPI has worked to promote social innovation and cultivate social entrepreneurs in China by granting crucial support to start-up and fast growing NGOs and Social Enterprises since Jan 2006. NPI initiates and operates several innovative programs such as “Non-Profit Incubator”, “Community Service Platform”, “Venture Philanthropy Fund and competition”, “Shanghai Social Innovation Park”, “Gongyi Xintiandi - The Nest Program” etc. Up to now, NPI already incubated more than 300 excellent start-ups, provides capacity building programs to hundreds of social entrepreneurs, fund raising over RMB 300mn to support the development of 1000+ grassroots NPOs and SEs. NPI is sparing no effects to engage with both multi-national and domestic corporations to promote community cohesion and social entrepreneurship. Ding Li is the Vice President of Non-Profit Incubator – one of the leading NGO supporting organizations in China since May, 2008. She is in charge of NPI 's business develop department in its headquarters, and she led the R&D for strategic initiatives. She also serves as a member of the Global agenda council on Social Innovation established by World Economic Forum.

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Small Size, Big Impact

What Chinese CSR Can Learn From the Mittelstand In the past, the business community mainly focused on economic issues when talking about sustainability. Without good economic figures there were no social or ecological activities. But times have changed. Today and in the future there will be no positive economic figures and no successful company without activities concerning social and ecological sustainability. We all have to adopt a holistic approach to the way we work, in order to ensure a world that is just, viable and worth living in, now and in the future. This is why almost every German company takes into consideration the economic, ecological and social aspects of the current times in the way it works, and is committed to striving to bring these different aspects into a state of balance. Companies align their entrepreneurial commitment towards a positive impact on the environment and our society. The goal is to achieve a balanced interplay between entrepreneurial interest, the preservation of the environment and a sense of social responsibility. By concentrating on their strengths German companies seek to bring about positive developments in all three areas and to create value for all concerned. The promotion of learning, a conservative approach to the use of resources and the strengthening of a culture of innovation are not examples of a new commercial approach; Rather, they are a part of the corporate culture for generations. For many German SMEs sustainability is not a buzzword but a corporate strategy that has been lived for decades, which can be seen in sustainability networks such as the United Nations Global Compact Network. Small and Mid-Sized Companies are the Backbone of Germany’s Economy Germany’s economy is driven by small and medium-sized businesses. 3.6mn or 99.6% German companies are medium-sized businesses, 16mn people work in the “Mittelstand” and 95% of all German companies are family owned. This brings very special attributes to the business, especially in terms of its approach to corporate social responsibility. Most German companies attempt to achieve a balanced interplay between entrepreneurial interest, the preservation of the environment and a sense of social responsibility. For this reason, maintaining the financial stability of the company to safeguard its long-term independence will continue to be the focus of the way companies conducts its business. This also includes the preservation and protection of resources and the efficient use of energy. Bringing the triumvirate of business, society and environment into balance with each other lies at the heart of the way German midsized companies do business. Education as Essential to CSR German companies are well known for their craftsmanship, their innovative strength and especially for their excellent educational and

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by DR. EBERHARD NIGGEMAN training systems. Companies network internationally with young people, through co-operations with further education establishments located near its facilities, for example. As an example we will take Weidmüller, a mid-sized company providing solutions for industrial connectivity. Weidmüller cooperates with partners all over the world, in places such as Germany, Singapore, Australia, Slovenia and Shanghai, where the company shares its knowledge of technology with local institutes. At the same time, they also support scientifically-minded young people with scholarships and prizes. In Germany, for example, there is the CIIT Award for innovations in the area of information technology. In Singapore they present a gold medal for outstanding performances in the area of “Clean Energies,” and in China, they give scholarships to particularly committed and gifted students. “Lifelong learning” is one of the greatest challenges in today's fastmoving times, where innovation cycles and the half-life periods of new technologies are getting ever shorter. Training, innovating and networking are the cornerstones of the work done by the Weidmüller Academy, an educational program which operates at many different levels. The apprentices regularly carry out events at local kindergartens, the student academy introduces both girls and boys to the possibilities of a technical career and each year, the college and university team looks after about 50 student interns, 100 interns and 45 end-of-course dissertation projects in the company. In addition, a lot of importance is attached to personal development and to the acquisition of social skills. “Asia Acadamy” as a Part of the Worldwide Commitment Established in 2003, the Weidmüller Academy endeavors to make sure that all activities involve both the build up of knowledge within the company and the exchange of knowledge with external institutions, universities and partners worldwide at the different Weidmüller production sites. The Academy strives to include new technologies and innovations in its course content and to expand its knowledge base. It is active regionally, nationally and internationally, taking into account the effects of globalization and the requirements of people around the world associated with globalization. Ten years after it was established, the Academy was given the label of “place of advancement” by government ministers. In 2011 the company established a second education and knowledge centre for East and South-East Asia in Shanghai, the “Weidmüller Asia Academy,” Environmental Management as a Sustainable Process Since the 1980’s a functioning environmental management scheme has been built around continuous monitoring and the documentation of the relevant parameters in many German companies. Environmental management systems record details of all the power consumption in production, broken down by energy source, and analyses the data with the goal of continual optimisation. Products are developed through

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strict and continuously monitored product compliance, and companies safeguard the implementation of ecological guidelines within productdevelopment and production. The strategy of most of the German companies is deeply based in the saving of resources like water, air and energy. These guidelines and strategies are also implemented in the worldwide organizations and production sites. At the same time German companies are pioneers when talking about “Green Technologies.” German business is working hard on the development of solutions, such as e-mobility, renewable energies or the reduction of energy consumption. Compliance as a Major Challenge for International Business Many German companies are “global players:” they are running production sites all over the world and have a international personnel. These companies find themselves in an increasingly complex regulatory environment, and have to take many different persons, mentalities and business transactions into account. Non-compliance with external specifications, such as directives, regulations and statutes can result in financial penalties in the shape of fines and claims for damages as well as competitive disadvantages resulting from loss of image and being barred from tendering for projects. Compliance in the sense of adhering to statutory regulations is the responsibility of the board, managing directors, business unit managers and employees.

German Consulting Company Directory 2014/2015 The first specific consulting company directory in Chinese and English

Complaince is an essential characteristic of a socially responsible company. Detailed training courses on anti-corruption, export controls and anti-trust legislation compliance audits, and local compliance officers at all locations are all good methods for a company to ensure compliance throughout the organization.

While in the Western world the consulting

Sustainability in the “German Mittelstand”

industry is considered to be a value enhancing

The “German Mittelstand” will continue to forge this path in the years to come. The companies are fully aware of their role as a global player in global businesses and of its responsibility for billions of employees worldwide. For this reason, maintaining the financial stability of the companies to safeguard their long-term independence will continue as the focus of the way the companies conduct their business. Providing in-depth training to young people and becoming involved in the local communities in which they operate can be seen as the social duty and obligation of all companies. This obligation also extends to the preservation and protection of resources and the efficient use of energy. Bringing business, society and environment into balance with each other lies at the heart of the way German companies, do business. In this respect and within the scope of the options available to the company, it is the goal of German companies’ commitment to sustainability to create a world that is more just, more viable and more worth living in in cooperation with its international production facilities, sales companies, employees, partners and customers. Dr. Eberhard Niggemann graduated as a physical chemist and joined the Weidmüller Group after working in the research & development department of Varta for battery systems for electric or hybrid vehicles in 1999. At Weidmüller he was head of tool manufacturing before becoming head of the Weidmüller Academy in 2001, responsible for the activities of education, training, knowledge exchange and innovative technologies with the areas Student Academy, Vocational Training, Academic Mentoring, Human Resources Development, International Training Center, New Technologies and Networks.

industry, the concept of external advisors is still in its infant stage in China. For this reason the AHK Shanghai created the bilingual German Consulting Company Directory 2014/2015. The directory introduces the member companies of the German Chamber Shanghai to their Chinese and international potential clients in both Chinese and English. Chinese and foreign companies can find international experienced consulting companies within the directory. These companies can provide services and strategies for successfully entering foreign markets or entering the Chinese market, establishing branches and expanding business in China.

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A Good Foundation and Great Potential Interview with Sun Yongfu, Director General, Department of European Affairs, Ministry of Commerce (MOFCOM), China

by ALEXANDRA VOSS and JANA KUMPF Mr. Sun Yongfu has served as Director General, Department of European Affairs, Chinese Ministry of Commerce (MOFCOM) since 2003. The Department of European Affairs, MOFCOM, is responsible for the development of bilateral relations on economy and trade as well as promoting bilateral cooperation between China and Europe. Mr. Sun, born in Beijing in 1955, previously served as Director General of the China International Center for Economic and Technical Exchanges (CICETE) and graduated from Harvard University with a Master degree in Public Administration and from Peking University with a PhD degree in Environmental Science. How do you assess the economic relations between China and Europe? Since China and Europe established diplomatic relations 30 years ago, the relationship has continuously deepened. Now a comprehensive, broad and multi-layered cooperation has emerged. In March this year, President Xi Jinping visited four European countries and the European institutions. This visit built a bridge of friendship, understanding and cooperation between China and Europe. It also pushed the political relations to a new level and generated new opportunities for the economic cooperation cultural exchange. Chinese-European economic relations serve as an important engine for the bilateral relationship between China and Europe. The Chinese government always attaches high importance to the economic cooperation between China and Europe. Since last year, the economic relations between two sides have overcome the Eurozone crisis, the weak world economy and other unfavorable factors to a steady and rising path. In 2013, the trade of goods between China and Europe has reached a new historic record of USD 559.1bn, a year-on-year rise of 2.1%. The EU invested USD 6.5bn in China, an increase of 22%. China made investments of 3.6bn USD in Europe, up 6.2% from the previous year. The EU is China's biggest trade partner and China is the EU's second largest trade partner.

The total GDP of China and Europe has a share of one third of the global economy. Seeing from any aspect in terms of natural resources, labor force, capital, markets or technology, the complementarity of the Chinese-European relations far exceeds competition. Presently, we are both pushing for economic reform. The Third Plenary Session of the 18th CPC Central Committee has made a resolution to further deepen the reforms. The EU is stepping up the implementation of the "Europe 2020" strategy to strengthen the Euro Zone governance, promote structural reforms and integration, and improve economic competitiveness. Under the guidance of the "Joint Statement on Deepening the China-EU Comprehensive Strategic Partnership for Mutual Benefit" and the "China-EU 2020 Strategic Agenda for Cooperation," China and the EU will maintain close communication and coordination, promote the negotiations of the bilateral investment treaty, jointly oppose trade protectionism, resolve trade disputes through dialogue, and create an open, stable environment for trade and economic cooperation. How do you assess the state of the ChineseGerman economic relations? We can say that the Sino-German relations are at their best period in history. The two countries maintain extensive exchanges and cooperation in the fields of politics, economy and culture. During President Xi's visit to Germany, the two sides announced the establishment of a comprehensive strategic partnership and plan to bring bilateral relations to new heights. In April, the German Federal Minister of Foreign Affairs, Frank-Walter Steinmeier, and Vice-Chancellor and Federal Minister of Economic Affairs and Energy, Sigmar Gabriel, visited China. This year Chancellor Angela Merkel will visit China. The third round of SinoGerman government consultations will be held in Germany in the second half of the year. In recent years, Sino-German economic and trade relations have seen a stable, healthy and rapid development. Being the largest economies and

influential countries in their respective regions, economic and trade cooperation between China and Germany is playing a leading role in ChinaEU cooperation. In 2013, Sino-German trade in goods amounted to USD 161.6bn, accounting for 28.9% of China-EU trade, a size equivalent to China's total trade with Britain, France and Italy combined. In addition, Germany is also the largest source of FDI and technology transfer. At the dinner with the Sino-German business community in Düsseldorf, President Xi called the Sino-German economic and trade relations the cornerstone and propeller of bilateral relations and put forward six hopes for their development. China and Germany are at different stages of development, but "German quality" and "Chinese speed" are highly complementary. China is comprehensively deepening reforms by further opening up, promoting new industrialization, informatization, urbanization and agricultural modernization, and will bring huge market opportunities to its partners, including Germany. What are the trends in the economic and trade cooperation between China and Germany and what changes do you expect? In short, Sino-German economic and trade cooperation will continue to develop, and bilateral cooperation and dialogue mechanisms will further improve. In addition to the Government Consultations and the Joint Committee of Economic Cooperation, the Sino-German Economic Advisory Committee is becoming the "second track" for the promotion of the economic and industrial cooperation between both countries. The closer regional cooperation between China and Germany is demonstrated by the Sino-German Ecopark in Qingdao, the Sino-German business cooperation bases in Taicang and Shenyang, the Foshan SinoGerman Industrial Services Zone, the Sino-German Eco-Metal City in Jieyang, the Wuqing EU Industry Park and the Sino-German SME Cooperation Park in Pujiang, Chengdu. 2015 is the year of innovation cooperation between China and Germany. With the deepening of the cooperation in the fields of high-end manufacturing, electric vehicles, June - July 2014

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vocational education, finance and innovation, the Sino-German economic and trade relations will achieve the leap from quantity to quality.

invested a total of about 8,200 projects in China, with the total value of USD 21.84bn, accounting for about one quarter of EU investment.

Since 1975 Germany has been China's largest trading partner in Europe. The trade structure in both directions has been optimized with a decline in the trade of simple processed goods and the maintenance of a high proportion of high tech products. In 2013 China’s exports of processed goods to Germany had declined to 38.6% from 53.8% in 2008. High-tech products continue to account for one quarter of the Sino-German trade, and the sum of China’s imports of high-end products such as automotive parts, machine tools, pharmaceuticals, aircraft from Germany is growing fast. In addition to traditional trade in goods, trade in services is also playing an increasingly important role. Germany is China's sixth largest trading partner of services. In 2013, Sino-German trade in services amounted to USD 19.24bn, mainly consisting of consulting services, transport and tourism.

The frequency of Chinese enterprises "going out" to Germany has also increased in recent years. A number of large-scale, high-quality investment projects have emerged. Companies such as Weichai, Sany, Greatview Pack, Huawei, Wuhan Iron and Steel have expanded investment in Germany and made positive contributions to local employment and tax revenue. According to preliminary statistics, there are about 1,200 Chinese enterprises in Germany with a total investment volume of about USD 8bn.

German companies have made investments of ca. 40bn EUR in China and Chinese companies are increasing their direct investments in Germany. What future trends do you see in the development of foreign direct investments (FDI) between China and Germany? Two-way investment cooperation has become a new highlight in Sino-German economic and trade cooperation. In 2011, Germany’s cumulative investment in China exceeded the UK’s and became the biggest source of foreign investment from Europe in China. Especially since the financial crisis, the Chinese market has become even more attractive. Volkswagen, BMW, Bayer and other multinational companies have built new production bases and R&D centers in China and optimized their international layout. According to Chinese statistics, by the end of 2013, Germany has

The German Chamber of Commerce has seen a constant increase in members since its establishment in 1999 and now has over 2400 members. In the light of recent reforms do you expect a further increase in the foreign investment and the number of foreign companies in China? I’m glad to see that the German Chamber of Commerce continues to grow and has become an important window and platform for German enterprises to expand their cooperation with China. At present, China is politically stable, the market size is expanding, industries are further opening up and the investment environment continues to improve. The reforms being rolled out under the new leadership will bring institutional dividends, stimulate the market and reinforce investors’ confidence, and I believe that China will become more attractive for foreign investment.

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Sino-German investment cooperation has a good foundation and great potential. Both sides can benefit in terms of talents, technology, capital and markets. Compared to German companies investing in China, Chinese companies investing in Germany are still in the beginning phase and will become a new growth point in the future.

The Shanghai Free Trade Zone has opened up more fields for foreign investment, established a negative list and other measures, and provided more open and convenient conditions to foreign investors. If there are no large economic fluctuations on a global level, China is expected to steadily attract more and better foreign investment. We hope to strengthen the confidence in the Chinese market and economic development and welcome all qualified European enterprises, including German companies, to actively participate in the new round of reforms in China. In which regions of China and in which industries do you see the strongest foreign investment? What recent trends do you notice? From January to March 2014, Eastern China had a foreign investment volume of USD 25.07bn, accounting for about 80% of the country's total. In the same period, the central region attracted USD 3.61bn, an increase of 44.5%, while the western region attracted 2.87 billion USD, an increase of 21.4%. The proportion of total

foreign direct investment in central and Western China is only slightly higher than 20%, but is increasing rapidly. As a next step, the Chinese government is committed to promoting the complementary advantages of the coastal, inland, and border regions, and achieving a coordinated development of the eastern, central and western regions. Firstly, this means to continue encouraging foreign investments in the eastern region in the modern service industry, research and development, high-end manufacturing etc. Secondly, it will to accelerate the construction of demonstration zones in the central and western regions, and to build a transformation model to incorporate domestic and foreign industrial participation which will radiate to surrounding areas. Thirdly, the opening up of the

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inland and border regions will be promoted to form a comprehensive new pattern of opening up. The European Union and China have recently entered talks about a comprehensive investment treaty. What is the focus and what are the challenges during these negotiations? The investment treaty negotiations were officially launched during the 16th China-EU Summit in November 2013. The negotiations receive much attention in China and Europe. The treaty will provide a better investment environment and stimulate investment growth in both directions. At the same time it will help to better integrate the Chinese and European economies and create the pre-conditions for negotiations on a comprehensive EU-China Free Trade Agreement. In January and March 2014 two rounds of negotiations were held in Beijing and Brussels and achieved initial results. Currently, negotiations are at an early stage and are

expected to include the two major aspects, namely investment protection and market access. As long as both sides discuss in a pragmatic way, remain open and do not demand overly high standards, I believe that the negotiations will progress smoothly. More and more German companies in China are led by Chinese managers. Do you see this as a sign that German companies have become an integral part of China’s economy and society? Germany is one of the biggest beneficiaries of economic globalization. German companies have achieved great success in China and have made an important contribution to China’s economic development. Currently there are more than 8,000 German enterprises in China, providing more than 500,000 jobs.

German products enjoy a high degree of brand recognition in China: the label ”Made in Germany” represents quality, safety and reliability. German products and German technology can be found everywhere in China. But we must also see that, just as in the case of Chinese-funded enterprises in Germany, a high proportion of local employees is only the first step towards successful localization. The current investments between China and Germany still need to overcome the impact of institutional and cultural differences. Both governments need to provide greater convenience for mutual investment. Modernization in China is entering a new phase, and the transformation of the economic development mode and the further upgrading of the industrial structure will bring opportunities and challenges for German companies. German talents and technology will be widely applicable in high-tech industries in China, and small and medium-sized enterprises – the backbone of the German economy – enjoy excellent prospects for cooperation.

and reputable companies to invest in Europe. It will also further improve policies and guidelines, optimize the service system, build cooperation platforms and promote dialogues with foreign governments and industry. In the case of Germany, Chinese investment promotion system is constantly improving. The goals of the Sino-German Economic Advisory Committee are to strengthen the direct dialogue of economic circles, advise the governments of both countries, and promote government and enterprises to go hand in hand in bilateral cooperation. The Chinese Chamber of Commerce in Germany is the first representative body of Chinese companies around Germany. It aims at providing a full range of professional services to Chinese-funded enterprises in Germany, indicating that Chinese investment in Germany has matured. In addition, the China International Investment Promotion Center (Germany) is to be launched soon and will become a bridge between regions and enterprises. Mr. Sun, thank you for the interview.

How does the Chinese government support the activities of Chinese companies in Europe and in Germany? It is fair to say that Chinese investment to Germany has begun to take shape and made contributions to the local economy and employment. At the same time it cannot be ignored that Chinese-funded enterprises in Germany also face problems such as restrictions on market or financing channels access, visa issues, social and cultural differences etc. Additionally, a small part of the media and the public still have a biased view on Chinese investment, which affects their acceptance. Investment is an autonomous behavior by enterprises, mainly determined by market mechanisms. The Chinese government will continue to support and encourage competent

Mr. Sun Yongfu, Director General, Department of European Affairs, MOFCOM, speaking to Ms. Alexandra Voss, Executive Director of GCC North China.

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Shanghai FTZ – Legal Update The Facts on Financial Reform

by DR. ULRIKE GLUECK and ADA TONG One aspect of the Shanghai Pilot Free Trade Zone which has become the object of high hopes is the planned financial reforms. As summarized in the General Scheme of the China (Shanghai) Pilot Free Trade Zone (General Scheme) issued by the PRC State Council on 19 th September 2013, pilot programs will be implemented in the FTZ for, among other things, RMB convertibility under capital accounts, interest rate liberalization in the financial market and RMB cross-border use. In order to implement the General Scheme, on 2nd December 2013 the People’s Bank of China (PBOC) issued the Opinions Concerning Financial Support for the Construction of China (Shanghai) Pilot Free Trade Zone. The Opinions laid out the principles and provided certain details regarding the creation of a new bank account system, exploration of ways to facilitate currency exchange and remittance, expansion of the crossborder use of RMB, liberalization of interest rates and reform of foreign exchange administration. In the latter half of February 2014, the Shanghai Branch of the PBOC issued five circulars consecutively which specified detailed implementing rules for the financial measures above. We would like to summarize some major highlights relating to the financial reforms in the FTZ as follows: Cross-border Investments When conducting cross-border direct investments, companies in the FTZ can directly go to the banks for cross-border payment and receipt of funds without any prior approval from the relevant foreign exchange bureau. Qualified citizens who work in the FTZ are allowed to conduct various out-bound investments including investment in foreign stocks. Further, qualified foreigners who work in the FTZ are allowed to open

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special investment accounts to conduct domestic stock investment and other inbound investment. Free Trade Accounts Regarding the innovation of account systems, distinction is made between “residents,” which refers to domestic individuals and enterprises, and “non-residents,” which refers to offshore individuals and enterprises. Residents in the FTZ can open RMB and foreign currency free trade accounts with banks in Shanghai. Non-residents can open RMB and foreign currency free trade accounts with banks in the FTZ only. Funds can be transferred freely between a free trade account and an offshore account, a non-resident account opened in China but outside of the FTZ or another free trade account. In contrast, fund transfers between a free trade account and an onshore account outside the FTZ shall be regarded as crossborder activities. Thus, Free Trade Accounts are also regarded as “offshore accounts” in the cross-border remittance supervising system. In addition, funds can be transferred between a free trade account and other settlement accounts held by the same nonfinancial entity for the purpose of current account transactions, loan repayment, and investment as well as other permitted crossborder transactions. When conditions are mature, the foreign currency and RMB funds in the free trade accounts will be allowed to be converted freely, which further makes FTZ a test bed for RMB convertibility. By adopting such a free trade account system, a financial environment which is to a certain extent isolated from the domestic financial market but highly connected with the international financial market is established in the FTZ which may serve the extensive foreign

related economic activities better. So far in practice, banks are still waiting for detailed implementation rules to be issued regarding the free trade accounts, and none have been opened yet. We will keep an eye on this topic and provide updates accordingly. Use of Cross-border RMB Banks in Shanghai can directly process crossborder RMB settlement for current account transactions and direct investment upon the instruction of their customers in the FTZ, based on the principles of knowing their customers, knowing their business and due diligence. The above does not include capital account transactions. Financial institutions and other enterprises in the FTZ are allowed to borrow RMB funds from overseas. The RMB Circular issued by the PBOC provides that enterprises in the FTZ are allowed to borrow RMB funds up to one time of their paid-in capital from abroad, while non-bank financial institutions may borrow offshore RMB funds up to 1.5 times of their paid-in capital. In each case, the term of the loan must be at least one year. However, the use of offshore RMB loans is limited, i.e. companies can only use them for production and operation in the FTZ, or project construction in the FTZ or abroad. Foreign invested enterprises (“FIEs”) which were established in the FTZ before the opening of the FTZ may choose between the cap mentioned above and the cap based on the difference between the total amount of investment and registered capital. Enterprises in the FTZ are also allowed to provide centralized receipt and payment services for the current account transactions of their affiliated enterprises and trade partners located in China and overseas. According to the Circular on Use of RMB, for

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the centralized receipt and payment service a chosen group member which is registered in the FTZ needs to open a RMB special deposit account with a bank in Shanghai. The centralized receipt and payment service can be provided to affiliated enterprises within the same group or to their suppliers, purchasers or trade partners. For the provision of such services, the group member needs to enter into service agreements with each party involved. Banks in Shanghai are allowed to cooperate with payment institutions which hold payment business licenses to provide RMB settlement service for cross-border e-commerce including trades in goods and services. Cash Pooling Enterprises in the FTZ can conduct crossborder RMB cash pooling based on the needs of business operation and management within their group, which includes the enterprise in the FTZ and all its affiliated enterprises associated by investment and shareholding. In order to conduct RMB cash pooling, one member company (incorporated in the FTZ) of a transnational group company may act as the concentration leader of the RMB cross-border cash pooling arrangement among the onshore and offshore group member companies. The header account must be in China. Foreign companies participating in the RMB cash pooling must remit their RMB funds into the local header account. An agreement between the group member companies participating in the cash pooling must be signed with a bank in China and such bank must file a record of such cash pooling arrangement with the Shanghai Branch of PBOC. Only cash flows from production and operation activities and industry investments (e.g. dividends) are allowed to be used for cash pooling. Enterprises in the FTZ can also conduct foreign exchange cash pooling. One member company (incorporated in the FTZ) of a transnational group company may act as the concentration leader of the cross-border foreign exchange cash pooling arrangement among the onshore and offshore group member companies. The cross-border foreign exchange cash pooling arrangement shall be filed with the Shanghai branch of SAFE in advance and a recordal notice shall be obtained from the Shanghai branch of SAFE. The concentration leader of the cross-border foreign exchange cash pooling should open one domestic foreign exchange

header account and one international foreign exchange header account with a bank in China. Funds from the onshore member companies shall first be transferred to the domestic header account and then be transferred from the domestic header account to the international header account. Subsequently, the funds in the international header account can be transferred to the accounts of the offshore companies participating in the cash pooling. The amount of the funds transferred from the international header account to the domestic header account shall not exceed the balance of the foreign debt quota of the onshore companies participating in such cash pooling. The foreign debt quota is the balance between the total amount of investment and registered capital minus the balance of medium and long term loans taken out from abroad minus the balance of not repaid short term loans taken out from abroad. The amount of the funds transferred from the domestic header account to the international header account should not exceed 50% of the net book value of the onshore companies participating in the cash pooling. Reform of Foreign Exchange Administration According to the Foreign Exchange Rules, document checks for current account transaction are simplified. Banks in FTZ may directly process foreign exchange settlement for current account transactions between an entity in the FTZ and its foreign customer upon request, based on the principles of knowing their customer, knowing their business and due diligence. However, in case of payments made to a foreign customer in the amount of USD 50,000 or above, a tax payment certificate will be required. The foreign exchange registration and change registration for direct investment in the FTZ shall be handled by the banks instead of the Shanghai branch of the State Administration for Foreign Exchange (“SAFE”). This is part of the reform regarding foreign exchange management. Further, FIEs in the FTZ can, whenever they want, convert foreign currency funds in their capital accounts into RMB funds for further use. In contrast, companies outside of the FTZ can only convert and settle foreign currency funds in their capital accounts into RMB when there is a real transaction and upon presentation of documents such as contracts, etc. For the RMB funds converted, an FIE in

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the FTZ needs to open a special RMB deposit account in the bank. The bank will process the payment upon request of the FIE based on the principle of real transaction. Of course, the converted RMB funds also must be used within the business scope of the FIE. This measure enables FIEs in the FTZ to manage the currency exchange risks better. The foreign capital centralized operating management shall cover and combine foreign exchange cash pooling and foreign trade settlement. Accordingly, existing foreign exchange cash pooling accounts and special accounts for international trade settlement centre will be transformed into and renamed the main account for onshore foreign funds. This account can be used for the business of centralized payments and receipts of foreign funds and netting settlement for current account transactions. Further, this account can also be used for the centralized management of the registered capital funds, overseas debts and funds transformed from equities or assets of the member enterprise within the same group. Enterprises in the FTZ may make overseas lending subject to a cap of the total amount of at the maximum 50% of the

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owner’s equity. When they provide overseas guarantees, they may directly enter into guarantee agreements. The preliminary examination and approval by the Shanghai Branch of the SAFE is no longer needed. Further, the limits on the net asset proportion of the guarantor and guaranteed party, the profit earning situation of the guaranteed party and shareholding relationship between the guarantor and guaranteed party are cancelled. Also, when paying off the guarantee fees, the enterprise in the FTZ may directly go to the banks to handle the purchase and payment procedure without obtaining the verification by the authority. Liberalization of Interest Rates According to the Notice regarding Releasing the Upper Limit of Interest Rate for Small Amount Foreign Currency Deposit in FTZ, the interest-rate ceiling for deposits in foreign currency that applied to small-amount funds in the general accounts in the FTZ has been lifted since 1st March 2014. Further, qualified financial institutions in the FTZ will have priority to issue large negotiable certificates of deposit. However, the rules for this business are still being prepared by the Shanghai Branch of the PBOC.

Dr. Ulrike Glueck is managing partner at CMS, China. Ms. Glueck has been providing legal advice on Chinarelated matters for almost two decades. She specializes in corporate law and M&A, foreign direct investment and restructuring. Ada Tong, LL.M. is senior associate at CMS, China. Ms. Tong advises clients on foreign direct investment, corporate and commercial law. CMS, China is a full service law firm which has been active in China for more than 20 years. In their offices in Shanghai and Beijing the firm offers legal and tax advice to both foreign and Chinese companies.

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The New Chinese-German Tax Treaty

Good News for German Investors in China by ALEXANDER PRAUTZSCH, ULRICH REUTER and LUKASZ MEHL During the visit of President Xi Jinping in Germany in March this year, the long awaited new Double Tax Agreement (DTA) between China and Germany was signed. It was the result of seven years of negotiations between the two countries, and – once effective – will supersede the current DTA signed in 1985. This is – mainly – good news for many German companies active in China.

At the same time, governments around the globe fight tax evasion, tax base erosion and profit shifting of multinational companies across borders. Modern international treaties address this with strict antiavoidance rules, mutual assistance and exchange–of-information clauses. The old Chinese-German treaty, however, does not yet reflect these developments.

A New Treaty For a New China

What’s New? The Main Changes

Do you still remember China in 1985? The average annual GDP per person was only 858 RMB – compared with 38,420 RMB in 2012. China exported only about 1% of what it exports today, and you could hardly find any German direct investment in the country – the Shanghai Volkswagen JV was just set up one year earlier. Streets were still filled with bicycles instead of cars, and if you wanted to see some rice paddies in Shanghai, you could take the ferry boat from the Bund to what is today known as Pudong’s international finance center in Lujiazui.

Talking about the new Chinese-German DTA, the most recognized and eagerly awaited change is the reduction of the withholding tax (WHT) on dividends from qualified shareholdings from currently 10% to 5%. A qualified shareholding would generally require a corporate shareholder with a minimum of 25% direct participation in the capital of the distributing entity in China. This puts Germany on par not only with most of the other European countries with new tax treaties with China, but also with popular investment hubs like Hong Kong and Singapore. From this angle, direct investments from Germany to China without interposing an intermediate company in another country or region could gain new attractiveness.

This was the time when the old but currently still applicable tax treaty between Germany and China was signed. Needless to say: the economic and political realities have changed dramatically since then. China has emerged from the status of a developing country to the position of a global economic giant. Trade with Germany soars – in both directions. German direct investment has reached close to EUR 50bn in 2013, and the growth of Chinese investment in Germany gains speed. Economic relationships between the two countries are totally different than 30 years ago – so should be the bilateral tax rules governing them. What is a Double Tax Agreement (DTA)? Most countries collect income taxes both from individuals and companies that are resident in the country, usually based on their worldwide income, and from non-resident individuals and companies if they have income sourced in that country (e.g. rental income from real estate in China by a foreigner would be taxed by China, even if the foreigner is not resident here). If a taxpayer is resident in one country and receives income sourced in another country, both countries may receive tax for this income, resulting in a double taxation. DTAs are bilater treaties between countries designed to limit such double taxation by

The WHT reduction on dividends should usually create significant tax savings for German corporate investors, as Germany does not allow for foreign tax credit on dividends due to the participation exemption according to German Corporate Income Tax law. However, enterprises looking into a dividend distribution from China to Germany should remember that, in order to enjoy these treaty benefits, they need to apply with the Chinese tax authorities and prove the recipient’s beneficial ownership over the dividends, i.e. that the shareholder has control, economic substance and business purpose and is not only created to enjoy tax benefits. For capital gains on minority shareholdings of less than 25%, taxation rights under the new treaty will be re-allocated to the country of residence of the investor. For example, if a German investor sells his shares in a Chinese company of which he owned less than 25%, China should not collect withholding tax on the respective capital gains, different from the situation under the current treaty. Note, however, that direct and indirect shareholdings of the 12 months prior to the sale would be considered to review the 25% shareholding threshold.

allocation of the taxation right, but often also to avoid non-taxation of crossborder income. They are usually based on international model treaties (e.g. by the OECD or UN.)

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One of the biggest challenges in practice for foreign companies active in China is the creation and taxation of Permanent Establishments (PE). In this regard, the new treaty especially clarifies that the relevant

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time period for a so-called service PE shall be counted by days instead of months. This should provide a more reasonable counting method to foreign companies. Furthermore, the relevant period to establish a construction PE is eased from six to 12 months. However, in practice, PEs should be expected to stay a major issue of dispute and concern for many foreign investors in China. Less welcome for German investors will be the abolishment of the deemed tax credit in Germany for royalty and interest payments, an incentive which was originally meant to subsidize capital and knowhow transfer from Germany into what was in 1985 the developing country China. While currently 15% deemed tax credit may still be claimed in Germany for qualified payments regardless of the tax burden actually paid in China, the tax credit will in the new treaty be limited to the actually paid amount. Note that under the new rules, the procedures in Germany to claim tax credits on Chinese withholding taxes may have to be upgraded. For example, it will be necessary in future to provide the relevant Chinese tax payment certificates to German tax authorities to claim German tax credit. Unfortunately, there is no transition period for existing interest or royalty payments (as it has for example been implemented in the also newly signed Chinese-French treaty). Other notable changes concern the calculation basis for applying the 183 days rule for employment income (changed from the calendar year to any 12 months period), reduced withholding tax on certain equipment rentals and sales, or adjustments for special income types like income from pensions. Effective Date and Transitional Issues Before becoming effective, the new treaty still needs to pass the formal ratification processes in China and Germany as well as a mutual notification procedure. Considering the required procedures, the earliest possible effective date of the treaty would be 1st January 2015. In case of delay, however, the new treaty may only become effective on 1st January of the calendar year following the completion of all required procedures. According to the treaty, with regard to withholding tax, the new rules are applicable to all payments after the effective date. Affected companies or individuals should consider that national Chinese rules and local practices at the Chinese tax authorities may create transitional problems for claiming treaty benefits. For example, dividend distributions already decided before but paid after the effective date of the new treaty may (based on the treaty rules) theoretically enjoy the new reduced withholding tax rate, but this tax reduction may – in practice – be difficult to claim, as Chinese tax authorities may see the withholding tax already triggered when the resolution has been made. In critical cases and if feasible, tax payers may consider postponing specific transactions or decisions to limit possible challenges from the tax authorities. The New Chinese-European Treaty Network The renewal of the Chinese-German tax treaty coincides with those of many other European countries. France, the Netherlands, Belgium, Denmark, UK, Finland – all these countries had old DTAs with China dating back to the 1980s and have negotiated new treaties within the last years. These new treaties are comparable in many aspects (but also deviate in certain details), and represent a new and consistent approach of Chinas negotiators versus tax treaties with other countries. It should be a fair statement that China follows this

standardized approach since signing its new treaties with Hong Kong and Singapore in 2007. With most European countries now having similar withholding tax rates as these popular Asian holding locations, European companies may have a wider range of alternatives for tax efficient holding and business structures. For example, with the new treaty, German investors in China, similarly to British and Belgian investors, will be able to enjoy treaty benefits with regard to dividend payments that previously were limited to locations like Hong Kong or Singapore. Similarly, the use of a European holding hub in popular locations like the Netherlands or Belgium could also be considered. These countries have new treaty rates with China comparable to those of Germany, and dividend distributions from these countries to Germany enjoy under certain conditions withholding tax exemption under the European parent subsidiary directive. The Takeaway Most changes in the new Chinese-German DTA should be welcomed by German companies active in China. The reduction of withholding tax on qualifying dividends and the clarifications regarding the determination of service PEs are expected to improve the tax climate for German companies in China. Efficient tax structures may be achieved using simpler holding structures and transactions. On the other hand, the possibility for stricter anti-avoidance rules and more information exchange will most likely also require more attention to planning and documentation to address possible questions from the tax authorities and harvest the biggest benefits from the new treaty environment. Selected changes in the new treaty and their likely impact on German companies

Opportunities

Challenges

n Reduced withholding tax on certain dividends n Reduced withholding tax on certain interest and rental related to equipment n Allocation of the taxation right for certain minority shareholdings to the country of residence of the investor n Change of counting method for Service PE from months to days

n Stricter anti-avoidance and international cooperation rules n Abolishment of deemed tax credit for royalty and interest payments from China to Germany n Change of the calculation period for the 183-day rule for employment income from calendar year to any 12 months period

Alexander Prautzsch is Tax Director at PwC China in the Shanghai office and committed to advising European, particularly Germanspeaking clients, on their investments in China. He is focused on Chinese, German and international tax matters for corporate clients as well as their employees. Mr. Prautzsch is a German certified tax advisor and has lived and worked in Shanghai since October 2005. Ulrich Reuter and Lukasz Mehl are Tax Senior Manager and Tax Manager at PwC China’s German Business Group in China.

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Wage Survey 2014 Analyzing Wage Trends Around China

by MAX J. ZENGLEIN For the second time the GCC has conducted its Flash Survey on Wage Trends, which measures basic wage developments for blue and white collar workers. The aim is to provide companies with timely wage information at the beginning of the year. It functions as a follow-up survey on our comprehensive wage survey carried out in September each year which covers wage developments for 36 different job categories. In total, 411 companies across Mainland China participated in our Flash Survey on Wage Trends 2014. Overall wage growth is expected to increase by 9.6% for blue collar workers and 8.8% for white collar workers. Wage Developments GCC Flash Survey on Wage Trends 2013 and 2014 10%

2013 2014

9.5% 9% 8.5% 8% Blue Collar

White Collar

Wage growth has stabilized at around the levels seen in the previous year, whereas wage growth in 2012 was still above 10% for most job positions. These figures of the recent flash survey are between 0.50.7 percentage points higher than the results of our Annual Wage Survey 2013, indicating that wage increases have been slightly revised upward over the past months, but have generally stabilized at lower levels. Wage increases at companies engaging in manufacturing have been outpacing wage growth at non-manufacturing companies. In general wage levels at manufacturing companies are lower than at non-manufacturing companies, production facilities also have a higher probability being located in second-tier cities where wage growth in general has been higher than in the first-tier cities with already comparatively high wage levels. However, regional variations in wage increases at German companies remain fairly low. The slowdown in wage increases is consistent for general wage developments across China. Most important and most publically noticeable, a new round of minimum wage adjustments have been announced in the first few months of 2014. As of 10th April nine

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jurisdictions have announced new minimum wage levels, averaging an increase of 12.5%. This is still below average increases in 2011 (22.1%), 2012 (16.9%) as well as for the first three months in 2013 (14.9%). Chongqing announced the highest increase, although it must be noted that minimum wages had not been adjusted there since 2012. At the lower end, Shandong’s adjustment of 8.7% is relatively low because the adjustment is the second within 10 months. Other adjustments are similar, and most other provinces are expected to follow suit, increasing between 12% and 13% on average in 2014. One of the central government’s main policy targets is to boost the share of consumption in the economy over the next few years as the economy continues its transformation from high growth levels to more intermediate growth. The slowdown in economic growth translates into lower overall wage increases, but considering the already relatively high base level in the coastal areas, wage increases continue to be a challenge for companies. Economic policies under President Xi Jinping have reiterated the importance of increasing wage levels and closing the income gap. Wage increases hence are expected to remain fairly stable at between 8-10% despite lower GDP growth at around 7.5%. The labor market in general, however, remains tight. This is especially the case in coastal areas, as the flow of migrant workers from central and western regions is slowing and attitudes are changing. Manufacturing hubs in eastern provinces as well as the PRD have already reported labor shortages in the first quarter of 2014. Wage Developments at Manufacturing and Non-Manufacturing Companies 12%

Blue Collar

10%

White Collar

8% 6% 4% 2% 0 Manufacturing for domestic market

Manufacturing for export market

Non-Manufacturing

Individual adjustments at companies for specific positions continue to show great variation, with companies reporting over 50% increases for certain positions. Mid-level positions are likely to have the highest

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wage increases with 53.4% of companies reporting increases for these positions to be among the three highest. 29.2% of companies report senior positions received the highest increases while only 17.4% report the highest increases for junior positions. For individual positions however, blue collar workers are most likely to receive the highest increases (22.7%), followed by sales (21.0%) and engineering positions (18.2%). For positions with the highest increases nearly 25% of companies increase wages greater than 20%. The majority (51.7%) of German companies report that wage increases are in line with productivity increases. However, nearly 40% evaluate wage increases being higher than productivity increases, an increase of nearly nine percentage points compared to our Annual Wage and Salary Survey. Though current wage increases appear to be manageable for most companies, pressure to increase productivity is building up. A slowdown in business growth paired with continuously rising labor costs will force companies to take a closer look at how productivity can be improved in order to avoid higher labor costs eating into profits. Evaluation of Wage Increases Taking Productivity Developments into Account 60%

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Collective bargaining remains fairly uncommon at German companies, with only 11% engaging in agreements with the official trade union, while another 7.5% reach agreements independent of the trade union. This is consistent with all out previous surveys, even though collective bargaining, especially at foreign companies in China, has revived notable public policy attention in recent years. As a pilot project Guangdong province is drafting new legislation regulating collective agreements and it is widely expected that collective agreements will acquire a more prominent role in the future of Chinese wage bargaining. Despite the lower growth rates, the Chinese labor market environment will remain challenging for companies on many fronts.

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SIP Building Your Future® in China Your Contact Partner: Daniel Mair (Head of Business Development) [email protected] Mobile:+86 18817237763 Office:+86 21 64650978 Max J. Zenglein is the German Chamber's economic analyst and has been with the GCC since 2008. As a trained economist he specializes in wage bargaining and institutional economics.

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Notes on a Scandal The Impact of Bribery Scandals on the Chinese Medical Industry by NATACHA EXTIER The Background of the Research In July 2013, the Ministry of Public Security of the People's Republic of China found out that the big multinational pharmaceutical company GSK had been offering bribes in China for several years. Bribes were offered and delivered in a variety of ways, such as using travel agencies or sponsorship to offer direct bribes to individual government officials, pharmaceutical professional associations or foundations, hospitals and doctors. This was done in order to expand GSKs distribution channels in China and increase their selling price. The total sum involved was about RMB 3bn.

Thus, the results of this research provide insight into the perceptions and attitude of doctors from a wide range of backgrounds and disciplines during this sensitive period. In order to follow up the evolution, the Psyma China team is preparing the fourth release of the Doctor Study. The GSK scandal had significant influence on the many surveyed doctors’ image of the brand. After the incident became public, more than half of the doctors surveyed reported a negative impression of the involved drug company GSK. According 10% of them, this incident has dramatically impacted the brand image.

Since August, many drug companies have been listed on the list of companies suspected of offering bribes. And with the deepening of the investigation, the bribery scandal has started to influence the relationship between the drug companies and domestic doctors.

About 40% of the doctors surveyed stated that they have decreased or even avoided the usage of drugs from the involved drug company. For doctors who never used the concerned company’s products, the negative impact on usages was even more severe.

Three months after the scandal, Psyma China has conducted the third release of its Doctor Study. This third release studies the impact of the scandal on the doctor’s expectations for drug companies, the government, and themselves. The survey was conducted online and surveyed 25 general practitioners and 75 specialists.

Impact of the Scandal on the Medical Environment

In addition to the original geographical areas Beijing, Shanghai and Hangzhou, which were surveyed in the first two waves of the study, the research sample has been expanded to Guangzhou, Shenzhen and Jinan to use a larger and more geographically representative sample size. At the same time, the audience was segmented by specialties, to get a more comprehensive portrait of the Chinese doctor.

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Generally doctors reported that they are dissatisfied with the current medical environment. Issues related to reimbursement and medical insurances, unrealistic patient expectations, time pressure and violence in hospitals have highly increased in 2013. On average, doctors only gave

their overall satisfaction of the medical environment a 4.18 out of 10, while the score was 5.4 out of 10 in 2012. The tense relationship between doctors and patients, low incomes, unreasonable management system and heavy workload are the top four reported reasons for dissatisfaction with the medical environment. According to the surveyed doctors, the scandal has worsened the relationship between drugs companies and hospitals, affected academic activities, and increased the conflicts between doctors and patients, impacting the doctors’ work efficiency. Generally, it has raised many questions regarding the country‘s medical system. After the incident, most doctors have stopped or reduced direct contact with drug companies in order to avoid being involved in the scandal. According to the doctors surveyed, 15% to 25% of communication methods have been stopped due to the incident. In the period directly following the incident academic activities organized by medical associations were

Unsatisfactory Events Mentioned by Doctors

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The rate of awareness of doctors at secondary and other hospitals was rather low. The youngest doctors, aged from 25 to 30, were the most attentive to the incident. According to the researchers, it was due to the fact that they are the most concerned about the future of their career. Most of the doctors were uncertain and even pessimistic about the medical environment after this specific rectification plan, and almost 40% of the respondents had been expect more restrictions for drug companies’ activities. New Expectations

perceived as the most favorable communication method. Though events organized or sponsored by drugs companies were accepted to a limited extent, as a direct consequence of the scandal informal medical representatives visits, which were accepted before, were totally rejected by the doctors post-scandal. Compared to 2012, the proportion of doctors experiencing visits from sales representatives has significantly declined in 2013 (87% vs. 74%). The proportion of doctors reporting "no visits” has doubled in 2013 compared with 2012, while the percentage of “more than five visits a week” has halved. These results clearly show that doctors have begun to reject visits from sales representatives, while selectivity has increased. Despite this, 70% of the doctors surveyed were still hoping to obtain information from drug companies, but claimed to want to avoid being in touch with them directly.

On the other hand, deputy directors were comparatively more willing to maintain a relationship with drug companies due to their rank and for business reasons. The internet was perceived as the major channel to get access to medical information, and according to the doctors this trend gained in importance due to the GSK scandal. The internet was mainly used to read and browse online information rather than discuss and share information via blogs and forums. Additionally, products or free samples mailed were still considered acceptable by the surveyed doctors. Reaction to the Rectification Plan After the bribery scandal went public, the government started a rectification plan for the drug companies. About 50% of the doctors surveyed were aware of this rectification plan.

Despite these areas of dissatisfaction, almost every doctor approved of the idea of regulating and controlling the pharmaceuticals industry and the management system of drugs companies. According to them, this scandal has contributed to stimulating the healthy development of the country's medical system, and the surveyed doctors hoped for improvement of their image and the relationship between them and their patients.

PSYMA BUSINESS RESEARCH CHINA is a Sino-German joint venture dedicated to providing deep insight and valuable information from tailor-made market research in China. If you want to read more about the research results, please contact Ms. Natacha Extier: [email protected]

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BUSINESS | Features

HGB and China GAAP

What Are the Differences Between the Two Accounting Standards? by RICHARD HOFFMANN and GRACE SHI The preparation of the annual financial statements is more than a just a legal requirement in China. It is also a health check for companies, as it assesses internal control, operation management, tax efficiency, financial efficiency and tax compliance. Companies with several subsidiaries in different countries face the issue of complying with various accounting standards, such as IFRS, China GAAP and the HGB. It is important to choose the auditors carefully and make sure they are experienced enough to conduct all relevant types of audits. This will not only save costs and time but will also ensure that all audits are completed with similar quality standards. The Handelsgesetzbuch (HGB) is the German code of commercial and company law. It governs all aspects of accounting and business transaction rules for German businesses and defines the legal forms available to a company in Germany. First issued in 1897, the HGB has since been regularly adapted to conform to new laws passed in the EU. The last significant change, the so-called Bi lanzrechtsmodernisierungsgesetz (BilMog) was made in May 2009. However, the subsidiaries of German companies abroad have to follow the local accounting standards – such as China GAAP (Generally Accepted Accounting Principles) – while simultaneously preparing financial statements according to the HGB in order to create a consolidated version for the holding company as a whole. Until recently, China enforced its own set of Chinese Accounting Standards (CAS). This system was, however, widely considered to be unsuitable for managing corporations in an increasingly open market economy, and was therefore revised. The old CAS has been largely replaced by the International Financial Reporting Standards (IFRS) to bring China further in line with international accounting practices. What are the main Differences between the HGB and China GAAP?

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The HGB revolves around several reporting principles: • Prudence: In case of any ambiguity, the less advantageous representations will be chosen. • Realization: Profits can only be shown and reported after they have been realized. • Imparity: Possible losses must be shown and reported even if not yet realized. • Historical Costs: The limit of every fixed asset valuation is its historical cost. • Lowest Value: Assets must generally be represented by their lowest possible valuation and liabilities by their highest possible valuation. The purpose of a financial statement according to the HGB is to deliver reliable information, guarantee creditor protection and help with tax, solvency and liquidity assessments. German GAAP are established and enforced by the German financial regulatory authority, the Federal Financial Supervisory Authority (BaFin) while the actual accounting and auditing rules depend on the legal form as well as the industry and stock exchange location of each enterprise. China GAAP on the other hand is similar to IFRS in many respects: the core accounting principle is the accrual principle–the evaluation of profit on an accrued basis. The purpose of a financial statement according to China GAAP is its usefulness in decision making processes; or in other words to provide the information on which Total Cost Method

a company’s stakeholders, e.g. investors and creditors, base their decisions. Elements of Financial Statements Chinese GAAP requires a balance sheet, profit and loss statement and a statement of changes in equity. In addition, a company also needs to present a statement of cash flow and notes to the financial statements including the accounting principles and policies applied. The HGB is similar to the Chinese GAAP, though for single-entity financial statements the cash flow statement is not required. Balance Sheet Both China GAAP and the German HGB present the accounts on the face of the balance sheet but in different orders. The German HGB presents the items from long to short term and China GAAP does so the other way around. Profit and Loss Statement China and Germany have different ways of displaying the structure of profit and losses even though the results are the same. China uses the cost of sales method and for German accounting the total cost method is more commonly applied. As the table illustrates, the results are the same. Sales Cost Method

Sales +/- Increase/Reduction in Finished Goods and Work

Sales -

Cost of Sales

in Progress

-

Selling Expenses

+

Other Own Work Capitalized

-

Administration Expenses

+

Other Operating Income

+ Other Operating Income

=

Total Operation Performance

-

Other Operating Expenses

-

Total Operating Expenses

=

Profit

=

Profit

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Other Key Differences Between China GAAP and the HGB Revenue Recognition The Chinese GAAP recognizes revenue under certain criteria, such as the probability that the economic benefits associated with the transaction will flow to the entity and that the revenue and costs can be measured reliably. The four categories of revenue recognition are the sale of goods, the rendering of services, other uses of an entity’s assets and construction contracts. To increase prudence the German HGB relies on the realization principle, in which revenues can only be recognized if they are realized on the balance sheet date. Revenue Recognition for Goods Both in Germany and in China revenue is only recognized when sales are realized. Even though the German HGB does not offer exact rules regarding the date when revenue from the sale of goods may be recognized, the point of transfer of ownership of the goods sold can be used as the main criteria. Revenue from the sale of goods, according to the HGB, is realized if goods have been delivered and risk and rewards have been transferred, as well as when the supplier is entitled to receive compensation. However, the Chinese GAAP just relies on simple criteria to determine whether revenue from sales of goods should be recognized or not. Some of those criteria are the likelihood of economic benefits flowing to the entity, the amount of revenue or costs incurred with respect to a reliably measurable transaction, the transfer of significant risks and rewards related to the goods. Theoretically, there should not be many differences of the revenue recognition methods for goods between China GAAP and the HGB. However, due to the Chinese tax system many companies recognize their revenue based on their tax invoice issuance which results in a difference between the sales recognition of HGB and China GAAP. Sales Recognition for Construction Contract Under HGB regulations, sales recognition of a project can be realized only if the project has been finished completely. However, in case of large projects with several smaller independent components it can be split into each independent project. The revenue and cost for these smaller projects will be recognized each time when a project is completed.

However, China GAAP recognizes the revenues of a project according to the percentage of completion method. Exchange Gain and Loss Whenever significant fluctuations in the exchange rate arise and can be recognized, an exchange gain or loss is recorded on the profit and loss statement.

net realizable value (NRV), which is the expected sales price minus the selling costs. The HGB method for inventory provision is more flexible and there are several exceptions depending on the type of inventory. There are three different ways to determine the provision: proportion of the total inventory, the turnover rate of the slow-moving inventory, the NRV method or a combination of the above. Inventories Cost

According to China GAAP, foreign currency transactions will use the going exchange rate on the day of the transaction to translate the amount of a foreign currency into the amount of the functional currency. For those monetary accounts valued in foreign currency which are to be converted on the date of the preparation of the balance sheet, the resulting balance is to be reported on the current gains and losses account. Any non-monetary foreign currency items that are originally measured at the historical cost shall still be converted on the transaction date at the spot exchange rate but the amount of functional currency shall not be changed yet. Any differences caused by exchange rate conversions shall also be recognized as gains or losses on the income statement. According to the HGB, the principle of prudence forces accountants to differentiate between an exchange gain and loss. Under certain circumstances unrealized gains cannot be recognized on the profit and loss statement. In the case of losses, both realized and unrealized losses have to be recognized. Low Value Goods According to China GAAP, low value goods which are listed on the inventory accounts are amortized at a rate of 100% when they are issued for use or at a rate of 50% when they are issued for use and another 50% amortization when being disposed. In line with HGB regulation slow valued goods with a value of less than EUR 150 become direct expenses while goods with a value of between EUR 150 and EUR 410 offer the choice of becoming direct expenses or part of a pool of low value assets which would then be depreciated (straight-line method) over the following five years. Goods with a value of between EUR 410 and EUR 1,000 automatically become part of this pool and are depreciated the same way. Inventory Provision and Valuation According to China GAAP there is only one accounting method for inventory provision – the

According to HGB regulations the value of inventory is to be measured at the lower of cost or market value including production cost, raw material cost, labor cost as well as direct and indirect manufacturing costs. Inventories requested or issued are accounted for their historical cost which is determined using the last-in, first-out (LIFO) or first-in, first-out (FIFO) methods. The Chinese GAAP carries inventories either at lower of cost or net realizable value. It uses either FIFO or the weighted average method to determine the costs of the requested and issued goods whereas LIFO is prohibited. Fixed Assets In line with China GAAP regulations for fixed assets a reasonable level of residual value should be set while under HGB accounting standards there is no requirement for residual value. Having to prepare two or more financial statements can incur significant costs and is likely to be equally as time consuming. At ECOVIS Beijing, we are one of the few tax advisors legally licensed to prepare statements in accordance to IFRS, the HGB and China GAAP and can help you with all relevant processes in China. In addition, we offer our services mainly to international companies, are therefore experienced with a variety of demands and able to provide reliable and cost effective services. Richard Hoffmann and Grace Shi (CPA, CTA, MBA) are Partners at the tax and legal consulting firm ECOVIS Beijing - the trusted advisor of embassies and other official institutions. With German and Chinese management, ECOVIS Beijing specializes in advising medium-sized German enterprises in China. ECOVIS International currently employs over 4.500 specialists and is present in over 50 countries worldwide. [email protected] '+86 10 6561 6609 www.ecovis-beijing.com

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BUSINESS | Features

More Than 300 Years of Family Frank Stangenberg-Haverkamp on how a Business Can Thrive for Generations

by OLIVIA HELVADJIAN Merck is a uniquely German success story; a small family owned company that over several centuries grew into an international corporation while still remaining in family hands. In an environment where issues of succession are of vital importance to many companies, Merck can provide insight into how a family-owned business can grow and adapt to changing times. German Chamber Ticker spoke to Mr. Frank Stangenberg-Haverkamp, Chairman of the Executive Board of E. Merck KG and Merck family member, about how Merck determines leadership, what it takes for a company to survive through the ages, and his advice for businesspeople pondering succession. Can you briefly explain your company structure? Merck is organized as a corporation with general partners (Kommanditgesellschaft auf Aktien - KGaA). At least one partner has unlimited liability for the company’s creditors (general partner). The others – the shareholders – hold an interest in the company’s capital without any personal liability for the company’s debts. Our structure is therefore a hybrid of an Aktiengesellschaft (German stock corporation) it has the legal form of a “Partnership on Shares”. Shareholders hold around 30% of the total capital of Merck KGaA, and the Merck family owns an interest of around 70% via E. Merck KG the general partner. E. Merck KG is the Group parent company of all Merck companies, yet it does not have any operating businesses itself. It makes the policy decisions for the Merck Group. No Merck family members participate directly in the management of Merck Group. What are the respective role and selection process for Board of Partners and Family Board? Indeed, family members do not directly participate in the operative management of Merck. We have external managers whom we trust and the Executive Managers are unlimitedly liable with their personal assets as well. The role and selection process looks like this: The Family Board appoints the Board of Partners of E. Merck KG. The members of the Family Board are elected every five years by now 151 family members. It is responsible for defining and articulating the strategic guidelines of the family. The Board of Partners of E. Merck KG fulfills the function of a supervisory board for E. Merck KG and also includes non-family members that are experts in their fields. As mentioned above, E. Merck KG controls about 70 percent of the Merck total capital. How does Merck’s unique structure and management style as a family company influence the ways in which it does business? The big advantage of Merck is: we have the benefits of being a family owned-business with a family that has a long-term investment horizon,

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and a listed company, that has to satisfy the needs of the capital markets and international investors. This is almost ideal for a company. Merck is active in research-driven specialty businesses. Whether in pharmaceuticals, high-tech materials, or in life science technologies, we focus on profitable, high-margin products that meet special requirements. Our products and services have two things in common: Firstly, they contribute to improving the quality of life for patients and customers. Secondly, they consistently fulfill high quality standards. Patients and customers all over the world can depend on the quality of products made by Merck. Merck focuses on innovative and top-quality high-tech products in the pharmaceutical and chemical sectors. The company’s goal is sustainable and profitable growth. Merck intends to achieve this by growing primarily organically and by further developing its competencies, but also by making targeted acquisitions that complement and expand existing strengths in meaningful ways. Building on leading branded products in all four divisions, Merck aims to generate income that is largely independent of the prevailing economic cycles. Moreover,

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the aim is to further expand the strong market position in emerging markets – this includes also China – in the medium to long term. In 2013, the Emerging Markets region contributed 36% to Group sales. At almost 350 years old, Merck has existed longer than many countries. How has Merck managed to survive for all these years? When you’ve prospered in business for over 300 years (we will celebrate our 350th anniversary in 2018), you must have done a few things right. By purchasing the ‘Engel’ Pharmacy in Darmstadt – the origins of the still family-owned company – Friedrich Jacob Merck ventured a new start in 1668. Emanuel Merck, who took over the pharmacy in 1816, made the first step from the pharmacy to a global company. He initiated the move to industrial-scale production. In pharmacy, he laid the foundations for the transition from a craft to a science. In the late 19th century Merck established numerous subsidiaries abroad, including Merck & Co. in the United States, which today only shares its name with us. The acquisition of Serono of Switzerland made Merck one of the world’s leading biotech companies. With the purchase of Millipore of the United States, Merck is now a leading global player in the life sciences market. It combines the tradition and values of a German family-owned business with the earning power, efficiency and state-ofthe-art features of a leading global corporate group. How will the company have to adapt and change to maintain this company structure and to continue being successful in the future? Merck wouldn’t be as successful as it is today if it hadn’t reinvented itself multiple times. But there is a common thread through our history which certainly acts as a basis for our future: we derive our power to grow from the balance between the old and the new, between tradition and innovation. That is what we call the Merck Way. Merck focuses on innovative and top-quality high-tech products in the pharmaceutical and chemical sectors. The company’s goal is sustainable and profitable growth. Merck intends to achieve this by growing primarily organically and by further developing its competencies, but also by making targeted acquisitions that complement and expand existing strengths in meaningful ways. Merck aims to generate income that is largely independent of the prevailing economic cycles. Moreover, we aim to further expand the strong market position in emerging markets in the medium to long term. In 2013, the Emerging Markets region contributed 36% to Group sales. As the chief officer of a family company, what advice would you give about generational transition in business? Our company was founded in 1668 and thus is the oldest pharmaceutical-chemical company in the world. We are proud of this long-standing tradition and values. But it is much more important to look ahead to secure the success of Merck for the coming generations – not only of family members, but also of employees. Saying that, I think that business has always to be done responsibly and sustainably with respect to employees, customers, patients, environment and shareholders. No family can provide generation by generation top management, as a family we therefore always relied on outside management expertise. It is most important to prepare the next generation early for transition and to empower outside management to help run the company. That is a key element of the success of Merck for nearly 350 years. Mr. Stangenberg-Haverkamp, thank you for speaking to us! June - July 2014

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REGIONAL NEWS | North China | Member Affairs

Thanks to Our Yearly Sponsors North China 2014/15

Beijing Office

Tianjin Office

Airbus and China Take their Partnership into the Future

Airbus and China have laid the foundation for taking their fruitful cooperation into the future. According to the agreements signed in Paris on 26 th March, witnessed by the French President Francois Hollande and visiting Chinese President Xi Jinping, Airbus will strengthen its cooperation with the Chinese aviation industry in various fields, which include promoting Tianjin as an Asian Centrerfor Airbus and upgrading industrial cooperation. Airbus and its Chinese partners have agreed to extend the successful joint venture to assemble A320 Family aircraft for an additional 10 years. The “phase II” will cover the period from 2016 to 2025, expand deliveries to the whole Asian region and include final assembly of the A320neo Family from 2017 onwards. The capabilities of the Tianjin Final

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Assembly Line will be extended and more major component suppliers will be invited to develop industrial projects in Tianjin. ALBA Group to Build First “Green Coal” plant in China On 28th March 2014 ALBA Group, one of the world's leading recycling and environmental service providers and suppliers of raw materials, signed a cooperation agreement for the so called "Green Power Project” for advanced household waste treatment with Zhongde Metal Group Co. Ltd. and Guangdong Rising Assets Management Co. Ltd.. The signing was witnessed by Chinese President Xi Jinping and German Chancellor Angela Merkel during Mr. Xi´s inaugural visit in Berlin. Under the Cooperation Agreement, ALBA Group will provide its third-generation treatment technology for the first green coal plant

in China to produce green coal substitute fuel from household waste. The plant will be located in the Sino-German Metal Eco City of Jieyang (Guangdong Province) and will have an annual treatment capacity of 400,000 tons of household waste for the production of 120 million kWh of electricity per year. Continental Changchun Extension Project In early 2014, Continental Changchun held the opening ceremony of its location expansion project. After expansion, it will have a new building covering an area of 8,300m2, providing 4,000m2 of storage space and 2,800m2 of shop floor. With this new facility, four new production lines for the Powertrain Division will be installed for the production of injectors and high temperature sensors. Continental Automotive Changchun Co., Ltd. was established in 1995, and now is the largest Continental plant in Asia, with about 4,000 employees. It currently serves 153 customers in 63 locations across China and 54 customers in 18 countries worldwide. Last year, the company opened its second plant. Now, Plant Jingkai focuses on Powertrain Division’s engine systems and sensors and actuators products; Plant Moonlake focuses on chassis & safety and interior divisions, including passive safety and sensorics, body and security and commercial vehicles and aftermarket.

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Carl Benz Academy Holds Cultural Evening On 23rd April, a three-day Student Event was kicked off at the Carl Benz Academy. Interesting lectures, workshops and action researches organized by teams from Carl Benz Academy, Peking University and Berlin University for Professional Studies (DUW) were held for students from the 2nd and 3rd cohort. The highlight of the student event was a cultural evening with Ms. Gina Pietsch of Berlin performing “My Best of B.B.“ – B.B. as in Berthold Brecht, famous playwright, poet, and director. Accompanied by Mr. Uwe Streibel on piano, Ms. Pietsch easily slipped into the roles created by Brecht and shared short and clever stories about him as well. The show was very well received by the audience.

Dr. Falk Lichtenstein New Head of Corporate at CMS, China Beijing Office Dr. Falk Lichtenstein has taken over the lead of the corporate practice of CMS, China Beijing Office starting from January 2014. Dr. Lichtenstein is a German attorney-atlaw and has worked for CMS, China in their Shanghai office since 2006. He specializes in Chinese corporate and commercial law as well as dispute resolution. Dr. Lichtenstein clients comprise foreign and foreigninvested companies in the areas of consumer products, automotive, IT technology, life sciences, machinery and equipment, textile, logistics and others. Before joining CMS, Dr. Lichtenstein worked as a teaching and research assistant at Freiburg University and acquired his doctorate in 2004. He passed both the First and the Second State Examination in Baden-Wuerttemberg in 2001 and 2006, respectively. CMS is a leading European provider of legal and tax advice with more than 25 specialized lawyers in CMS’s offices in Shanghai and Beijing.

Crowne Plaza Beijing Lido Appoints New Executive Chef Daniel Nigel Brooker Crowne Plaza Beijing Lido is pleased to announce the appointment of Mr. Daniel Brooker, a native of New Zealand, as the new executive chef who will be overseeing all of the hotel's food operations. A highly creative and detailoriented chef, Mr. Brooker creates local farmto-table cuisine for banquet events, in room dining and restaurant service by combining traditional and modern cooking techniques. He specializes in creating out-of-the-box menus for catering, corporate and private events. Ms. Anna Stackler, general manager of Crowne Plaza Beijing Lido, said "We are very pleased to welcome Daniel to China, and are excited about his appointment as our new executive chef. We believe Daniel will bring with him a unique culinary experience that will delight all of our guests.”

DoubleTree by Hilton Shenyang Welcomes “Earth Hour” For the 2014 Earth Hour at DoubleTree by Hilton Shenyang, the “Light Bulb Hero” – played by a hotel volunteer – entertained guests as the superhero spokesman this year. The activity lasted from 8:30pm to 9:30pm on 29th March in the lobby lounge. Eight children from the “Little Turtle” Autism Recovery Center were invited to participate in a drawing competition of the “superhero” in their minds and finally the “light bulb hero” won the challenge. The superhero greeted and interacted with guests during the hour. All participants, including long-stay, in-house and outside guests, signed on the pledge wall. At 8:30pm, the GM lit the candles in the shape of the DoubleTree logo with all participants and all non-essential lights were turned off for an hour as a symbol of the hotel’s commitment to environmental protection.

June - July 2014

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REGIONAL NEWS | North China | Member Affairs

New Faces at Ecovis Beijing Ms. Manuela Reintgen has been living and working in Shanghai and Beijing since 2009, and recently joined ECOVIS Beijing as manager of the business development team. With a diploma in Chinese, French and Law, she has worked for several private and governmental institutions in both Germany and China. Having focused on foreign direct investment into China for the last few years, she advises clients on all aspects of establishing and doing business in China. Ms. Reintgen is well versed in tax and legal regulations as well as the main challenges and pitfalls SMEs encounter whilst managing their China entity. EOS CreditCN Participates in (CIFTIS 2014) The financial service provider, EOS CreditCN Credit Management (Beijing) Limited, participated in the 3rd China Beijing International Fair in Services (CIFTIS 2014) from 28th May to 1st June 2014. The company provides financial services such as receivables management, domestic/international debt collection and credit reports in China. In 2011, EOS CreditCN was founded as a joint venture by EOS International in Germany, a subsidiary of the Otto Group, and Beijing CreditCN Credit Management Ltd. in China.

EuropElectro General Assembly Meeting Held in Frankfurt am Main On 4th March 2014, a EuropElectro general assembly meeting was held in Frankfurt am Main. The chairman of the EuropElectro Board, Mr. Paul Coebergh van den Braak, senior director of Philips IP&S, moderated the meeting. CEO of ZVEI, Dr. Klaus Mittelbach presented a welcome speech and participated in the meeting discussion. During the meeting, Ms. Wang Xu, head of EuropElectro, reported on EuropElectro’s 2013 work program and the tasks list in 2014. She also spoke about some special topics - IT security quality,

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traceability, compulsory standards, and Smart Grid - that were put forward on the last board meeting in Beijing on 17th September 2013. The General Assembly was satisfied with the performance of EuropElectro in 2013, approved the 15 tasks of EuropElectro in 2014, and instructed the EuropElectro office and the ZVEI back office to track IT security with high importance.

musculoskeletal system. Ms. Sommer speaks German, Dutch and English and sees patients on Tuesdays and Thursdays. Ms. Katharina Traemann trained in Bremen, Germany. Her experience as a physiotherapist includes work in the fields of orthopedics, post-surgical rehabilitation, management of sports injuries and pediatrics. She sees patients on Mondays and Fridays and speaks German and English.

New MD at GEA Westfalia Separator Mr. Alexander Krausse has been appointed to be the Managing Director of GEA Westfalia Separator in Greater China. Mr. Krausse possesses 28 years of business experience, mainly in the field of operations. Since he joined GEA Westfalia Separator China as Vice President & COO in the beginning of 2012, he has managed the construction of the new production plant in Wuqing and realized a smooth production start in July 2013. This plant is the new GEA Westfalia Separator China headquarters, provides 28,000m2 production and 5000m² office space and currently employs about 220 employees. GEA Westfalia Separator China employs in total 350 employees in three legal entities, with offices in Beijing, Hongkong, Shanghai, Guangzhou and Dalian. GEA Westfalia Separator provides a world-class environment for engineering, production, sales and service of separators, decanters, homogenizers and turnkey solutions serving a broad variety of applications such as food, marine and offshore.

Kaiser Team Studies Construction Technologies in Germany During March a team from Kaiser Construction Co. visited Stuttgart and Munich, Germany. The engineers were seeking to learn advanced German technics and methodologies as related to project engineering and construction technology. In addition to understanding new technologies the team also hoped to learn more about European architecture, design concepts, and new construction material applications. They visited workshops, logistic warehouses and multi-story parking garages owned by such famous German companies as DÜRR, FESTO, GROB, MAMMUT, etc. The team was made aware of strict German standards on construction durability, practical material applications, and construction technics. Kaiser has absorbed many new ideas, concepts and new technologies that can be integrated into their building technics in China and the ASEAN region. It was a wonderful trip for all both in terms of cultural richness and technical enrichment. Kaiser would like to thank CPM for their cordial welcome and their help in arranging tour plans.

International SOS Beijing Clinic Welcomes New Team Members International SOS Beijing Clinic is pleased to welcome two German visiting physiotherapists to its team: Ms. Birgitt Sommer and Ms. Katharina Traemann. Ms. Sommer trained in Mainz, Germany and the Netherlands. She likes to help her patients take responsibility for their own health, particularly in regards to regaining and maintaining functionality of the

New General Manager for RAG Mining Technology RAG Mining Technology (Beijing) Co., Ltd, the Chinese subsidiary of RAG Mining Solutions GmbH located in Herne, Germany, has a new general manager. Mr. Roland Hecken is taking over the position from Mr. Peter HartliebWallthor. Ms. Heike Liss remains director and legal representative of the Beijing based company.

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Novofibre Panel Board Appoints New CEO Dr. Christoph Binder was recently appointed as InterimCEO of Novofibre, in charge of its subsidiaries in Beijing and Shaanxi province respectively. As a full professor of ESB Business School of Reutlingen University, he has extensive knowledge of management accounting and sustainability controlling. He is also a passionate executive with a proven record in the fields of basic materials transportation, telecommunications and energy with a focus on operations, reorganizations, development of market entry strategies and business portfolio management when he served in Mckinsey & Company in Munich. Novofibre develops, manufactures and commercializes formaldehyde-free Oriented Structural Straw Board (OSSB) and its finished products, which are extensively applied in the fields of construction, interior decoration, flooring and furniture. By recycling wheat straw, Novofibre contributes to environmental protection by avoiding straw burning, while local farmers can enjoy an income increase from selling straw to Novofibre.

Storymaker Organizes First Shows in the Year of Horse For the Chinese, 2014 is the year of Horse. At the beginning of the new year, Storymaker conducted two flash mob shows and two months of online promotion for AB InBev in Zibo and Tianjin. With AB InBev’s famous Clydesdale horse, Storymaker organized flash mob dancing and hip-hop shows, an LED wish wall and interactive games, as well as the popular online drinking test and group organiser. Since it was the first time for the citizens of Zibo and Tianjin to celebrate the New Year with this type and scale of activities, over 2,500 citizens were attracted over two nights. Approximately 10mn citizens learned about the events in total, as nearly 100 media outlets reported on them.

Uponor Q&E Evolution Ring wins iF design award 2014

Award winners were honored on 28th February of 2014 at BMW World in Munich. For over six decades now, the iF design awards have recognized outstanding achievements in design. The high international reputation of the iF design awards is, not least, due to the top-class level of the entries. This year the Uponor Q&E Evolution ring design impressed the iF jury, which was formed of 49 international experts and renowned designers. They assessed 4,615 products, communication designs and packaging entered by participants from 55 countries, and Uponor Q&E Evolution ring was selected as one of the winners. “For Uponor this award is the result of our commitment to our customer and the effort to offer innovation, quality, know-how, service and reliable longterm partnership,” said Jyri Laakso, development manager BLD Europe.

New Members North china For full contact information and company profiles of our new and existing members, please visit www.german-company-directory.com

Mr. Jan Szklany Managing Director Fehrer Automotive (Shenyang) co., Ltd. ' 0 24 2987 2626 [email protected]

Mr. Victor Simoes General Manager Sodecia FSG (Dalian) co.,Ltd. ' 0 411 3926 4809 [email protected]

Mr. Jens Wycisk General Manager Kempinski Hotel Shenyang ' 0 24 2298 8187 [email protected]

Mr. Michael Bergbauer Senior IT consultant science + computing ag-A Bull Group company ' 0 10 6597 8001 [email protected]

Mr. Raymond Liang President Oerlikon Leybold Vacuum (Tianjin) Intel. Trading co., Ltd. ' 0 10 22 2697 0808 [email protected]

Mr. Stephan Selzle Private Member [email protected]

Mr. Werner Kleber Private Member [email protected] Dr. Jie Li Additional Member [email protected]

Mr. Jochen Geschke Private Member [email protected] June - July 2014

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REGIONAL NEWS | North China | Chamber Affairs

5th March 2014

6th March 2014

Event: Networking Dinner in TEDA Venue: Delights Restaurant & Bar, Tianjin

Event: Special Event - Airbus Tianjin Factory Tour Venue: Airbus (Tianjin) Final Assembly Co., Ltd. (Meeting at German Chamber) Presentation: Mr. Andreas Ockel | General Manager, Airbus (Tianjin) Final Assembly Co., Ltd.

On 6 th March, the German Chamber invited its members on a guided tour of the Airbus (Tianjin) Final Assembly Line. Mr. Andreas Ockel, general manager of Airbus (Tianjin) Final Assembly Line Co., welcomed the Chamber members and gave a presentation on the process from groundbreaking to the final setup of an Airbus plant, providing background information on the current Airbus fleet. During the tour through the assembly hall, the group gained insight into the diverse production phases and assembly processes and was able to discuss questions directly with the Airbus representative on site. The only Airbus assembly line outside Europe, located in the Tianjin Airport Economic Area, began its operations in September 2008 as a joint venture between Airbus and a Chinese consortium of the Tianjin Free Trade Zone (TJFTZ) and China Aviation Industry Corporation (AVIC). Since its opening the Final Assembly Line has delivered more than 150 aircrafts of the A320 Family to Chinese airlines.

7th March 2014

7th March 2014

11th March 2014

11th March 2014

14th March 2014

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Event: Seminar Topic: Individual Income Tax Management Venue: German Chamber Tianjin Office Speakers: Mr. Zhizhong Yang | Tax Partner, PwC Mr. Hao Dong | Personal Tax Consulting Manager, PwC Event: Seminar Topic: Something in the Air in Beijing Venue: German Chamber Beijing Office, Landmark Tower II Speaker: Dr. Gordon C. Peters | MD, MPH, Regional Medical Director, International SOS North Asia.

Event: Seminar Topic: How to apply for a Visa to Germany – Information by the German Embassy and the German Chamber of Commerce Venue: German Chamber Tianjin Office Speakers: Mr. Ingo Ganns | Visa Officer, German Embassy Ms. Li Nan | Project Manager Visa Service, German Industry & Commerce Greater China - Beijing Event: Praktikantenstammtisch Beijing Venue: Schindler’s Anlegestelle

Event: Seminar Topic: CCC Reform 2013 - Latest Updates Venue: German Chamber Beijing Office, Landmark Tower II Speaker: Ms. Wang Xu | Head, EuropElectro

www.china.ahk.de

17th March 2014

17th March 2014

18th March 2014

Event: Seminar in cooperation with German Centre Topic: Als deutscher Expatriate in China richtig versichert Venue: German Centre for Industry and Trade - Beijing, Landmarktower II Speaker: Mr. Klaus-Peter von der Eltz | General Manager, Expatriate Care Consult Versicherungsmakler GmbH

18th March 2014

19th March 2014

Event: Kammerstammtisch Beijing Venue: Paulaner Brauhaus, Beijing Lufthansa Center Event: Seminar in cooperation with German Centre Topic: How to apply for a visa to Germany Venue: German Centre for Industry and Trade - Beijing, Landmarktower II Speakers: Mr. Ingo Ganns | Visa Officer, German Embassy Ms. Li Nan | Project Manager Visa Service, German Industry & Commerce Greater China - Beijing

20th March 2014

Event: Biz Socializer – Inter-Chamber Business Networking Venue: Radisson Blu Plaza Tianjin Hotel Event: Seminar Topic: An Introduction of Provisional Regulations on Labor Dispatch - Background, Policy and Impact Venue: German Chamber Beijing Office, Landmark Tower II Speaker: Ms. Catherine Shen | Partner, Broad & Bright Event: Seminar Topic: How to Minimize Costs: Cost Leadership Strategy Application in the Manufacturing Industry Venue: DoubleTree by Hilton Hotel Shenyang Speakers: Mr. Jan Haug | Head of Shenyang office, STAUFEN Mr. Sunny Chen | Project manager of BU procurement and supplier management, STAUFEN Mr. Danny Chen | Project manager of BU procurement and supplier management, STAUFEN

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20th March 2014

Event: Kammerdinner Topic: Jahresrückblick 2013 und Jahresausblick 2014 mit dem deutschen Botschafter Venue: Kempinski Hotel Beijing Speaker: Mr. Michael Clauss | Ambassador of the Federal Republic of Germany to China

At the first Kammerdinner of this year, on 20 th March, 103 participants benefited from an opportunity to discuss current perspectives and challenges of China’s economy, the development of German-Chinese relations, and the situation for German companies with Ambassador Michael Clauss. The year 2013 was marked by the enormous intensification of economic relations between China and Germany. Germany and China are key trading partners, although large investment discrepancies still remain: German investments in China rose to EUR 40bn by the end of 2013, while Chinese investments in Germany were at EUR 1.2bn. In 2014 Germany and China both plan several high-powered delegations, highlighting their rising importance as trading partners. This positive development can be explained, among other factors, by the following reasons: firstly, China appreciates Germany's role in solving the euro-zone debt crisis, while Germany esteems China's constructive approach and contribution to tackling the crisis. Secondly, Chancellor Merkel enjoys high popularity in China. Thirdly, China’s new leadership has introduced a series of economic and strategic reforms which offer various new opportunities for Chinese-German cooperation. The mainland’s shift toward hightech production and innovation, for example, are likely to increase the German interest in joint R&D ventures as well as the Chinese interest in investing in European high-tech hubs and services. While continuously expanding strategic partnerships, the EU and China currently negotiating an investment agreement also aiming to reduce still existing trade tensions. German firms have secured excellent economic returns in 2013, although companies have to deal with higher wages and more moderate economic growth. Ambassador Clauss believes that German firms can continue to grow in the future even though the days of double-digit economic growth are past. It is clear that this implies a new era for manufacturing, and firms might also be obliged to enter into less developed areas of West China to remain competitive. In the medium term, Ambassador Clauss expects to see

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an improvement in the still unequal treatment of Chinese and German companies in terms of market access in China. In China increasing social inequality, environmental degradation and other issues are creating pressure for more successful policies. Based on this, the Chinese President Xi Jinping introduced a large reform package. The aim is to strengthen market mechanisms, improve public governance, reduce bureaucracy and to fight pollution and corruption.

www.china.ahk.de

24th March 2014

Event: Young Professional Seminar Topic: When you fail in China, it is because of you Venue: German Chamber Beijing Office, Landmark Tower II Speaker: Mr. Peter Pronk | CEO and Owner, Beijing 1421 Business Consulting Co.

26th March 2014

26th March 2014

27th March 2014

27th March 2014

27th 25th March 2014

Event: Seminar Topic: 2013/2014 PRC Tax Update Venue: Hilton Hotel, Chaoyang District, Beijing Speakers: Mr. Anthony Tam | Partner, Mazars Consulting Co., Ltd. Ms. Joey Zhou | Senior Manager, Mazars Consulting Co., Ltd.

March 2014

3rd April 2014

Event: Webinar in cooperation with China IPR SME Helpdesk Topic: Strategien zum Schutz Geistigen Eigentums für den deutschen Mittelstand in China Venue: Online Speaker: Dr. Martin Seybold | Rödl & Partner Beijing Moderation: Ms. Jana Kumpf | Regional Manager Beijing, German Chamber of Commerce in China – North China Event: Kammerstammtisch Tianjin Venue: Drei Kronen 1308 Brauhaus Tianjin

Event: Inter-Chamber Breakfast Briefing Topic: China Individual Income Tax Pitfalls and Opportunities for Expatriates Working in China Venue: Hotel Indigo Tianjin Haihe Speaker: Mr. Jacky Chu | Partner of International Assignment Services, PwC Event: Interchamber Ladies Networking Venue: Parnas Restaurant-Bar, Chaoyang District, Beijing

Event: Seminar Topic: Individual Income Tax Management Venue: New Century Grand Hotel Changchun Speaker: Mr. Hao Dong | Personal Tax Consulting Manager, PwC Event: Annual General Meeting of German Chamber of Commerce in China – North China Venue: Kempinski Hotel Beijing

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8th April 2014

9th April 2014

Event: Praktikantenstammtisch Beijing Venue: Schindler’s Anlegestelle

Event: Breakfast Seminar Topic: Marktentwicklung im Maschinenbau in China und Handlungsempfehlung für deutsche Unternehmen Venue: Westin Beijing Chaoyang Hotel Speaker: Mr. Haiying Chen | Vice President, Struktur Management Partner Shanghai Office

11th April 2014

14th April 2014

14th April 2014

10th April 2014

Event: Special Event Topic: Day of Logistics 2014: Visit of the E-Commerce Logistics Park in Wuqing Venue: Wuqing E-Commerce Logistics Park Speaker: Ms. Jean Wang | Chair, German Logistics Association (BVL)

The 7th Day of Logistics on 10th April, 2014 saw more than 400 events organized worldwide with the collaboration of companies, institutes and universities. The aim of the Day of Logistics is to raise awareness of the importance and value of logistics and supply

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Event: Inter-Chamber Breakfast Seminar Topic: Risk Management and Business Insurance Venue: The Ritz-Carlton Tianjin Speaker: Mr. Thomas Hai | Supervisor of the Business Development Division, Aioi Nissay Dowa Insurance (China) Co., Ltd. Event: GM Roundtable Topic: Marketing und Vertrieb in China Venue: German Chamber Tianjin Office Speaker: Dr. Andreas Risch | Managing Director, TURCK (Tianjin) Sensor Co., Ltd. and TURCK (Tianjin) Automation Systems Co., Ltd. Event: Kammerstammtisch Beijing Venue: Paulaner Brauhaus, Beijing Lufthansa Center

chain management. In association with BLV (the German Logistics Association), the German Chamber of Commerce took its members on a tour of the warehouse logistics site of Beijing Jiuxian E-Commerce Co., located in the E-Commerce Logistics Park in Wuqing. Ms. Jean Wang, Chair of BVL’s Beijing Chapter, presented the results of the World Bank’s International Logistics Performance Index 2014. The subsequent visit to Jiuxianwang’s North China logistics center provided the group with detailed insights into the logistic processes of China’s largest integrated online alcohol retailer and showed which logistic efforts have to be made to ensure smooth delivery processes.

www.china.ahk.de

15th April 2014

Event: Interchamber Breakfast Seminar Topic: Building a sustainable Leadership Pipeline and create organisational effectiveness with immediate impact Venue: China World Hotel, Beijing Speaker:Mr. Kent Jonasen | Founder, SirrahGroup

20th April 2014

23rd April 2014

17th April 2014

Event: Workshop Topic: Building Effective Leadership: Different Leadership Styles for Different Situations Venue: Crowne Plaza Shenyang Parkview Speakers: Mr. Victor Hou | Senior Business Consultant, LDi Ms. Ruth Lu | Trainer & Director of Counseling Services, LDi Ms. Libby Zhu | Trainer and Business Consultant, LDi

25th April 2014

30th April 2014

19th April 2014

Event: Young Professional Easter Brunch Venue: Royal Smushi House, Beijing

Event: Seminar Topic: Establishing a Company outside Beijing: Challenges and Benefits of 2nd and 3rd Tier Cities Venue: Four Seasons Hotel Beijing Speakers: Mr. Omar Puertas | Expert, EU SME Centre Mr. Nils Seibert | Head of Legal & Investment Department, German Industry & Commerce Greater China - Beijing Event: Special Event Topic: Deutscher Filmabend – Tatort Venue: Paulaner Tianjin Event: Kammerstammtisch Venue: Drei Kronen 1308 Brauhaus Tianjin

Event: Special Event Topic: “Deutschland-Tag” in Shenyang Venue: Kempinski Hotel Shenyang

The “Deutschland-Tag” in Shenyang organized by the German Academic Exchange Service (DAAD) in cooperation with the German Chamber network on 19th April, attracted more than 800 participants. Under the slogan “Zeit fuer Deutsch – time for German” German institutions such as the DAAD, German Chamber, Goethe-Institut and universities informed students and guests at the fair about German language and culture as well as the travel and work environment in Germany. During the lecture program, DAAD alumni reported on their own experiences in Germany in a career talk-show, while representatives from BMW-Brilliance Automotive (BBA) advised on entry level programs and job opportunities at BBA. Dr. Bjoern Lindemann, Regional Manager North China of the German Chamber, introduced the trends and challenges for German companies in North China. He also held a dinner speech at the reception the day before in front of representatives from German institutions and universities as well as German companies, in which he presented the development and outlook of German business in the Northern Chinese provinces. Shenyang in particular has become a center for German investment in the North, and more than 120 German companies have already been registered in the city.

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REGIONAL NEWS | North China | Chamber Affairs

Annual General Meeting of the German Chamber of Commerce in China - North China for election. 13 candidates stood for election and introduced themselves to the audience. Voter participation was over 30%, with a significant share of voters casting their vote electronically, a possibility which was introduced for the first time in Board elections of the German Chamber of Commerce in North China and was very successful and popular among the voting members. Newly elected Board Members GCC North China (from left): Kay Popken, Jörg Müller, Karsten Engel, Alexandra Voss, Susanne Rademacher, Lothar Herrmann, Martin Broda, Stephan Luerssen, Xingliang Feng

Outgoing Board Members GCC North China (from left): Roman Pfaffinger, Frank Jaeger, Xingliang Feng, Alexandra Voss, Marcel Schneider, Jan-Willem Sudmann, Dr. Jörg Mull. Not in the picture: Uwe Birnbaum, Dr. Marc Wucherer

The 14 th General Assembly of the German Chamber of Commerce in China - North China took place on 3rd April, 2014 at the Kempinski Hotel, Beijing. Ms. Alexandra Voss, Executive Director of the Chamber, and Dr. Joerg Mull, Executive Vice President, Volkswagen (China) Investment and hitherto Chairman of the Board of Directors of the Chamber, welcomed 100 participants. The most important topics on the agenda were the annual management report and the election of a new Board of Directors. Ms. Voss outlined the positive development of the Chamber in 2013. Membership increased from 490 to 540, and approximately 6,400 guests attended 180 events, from business meetings to social gatherings including the German Ball. A special focus was laid on the regions of Tianjin and Shenyang, where the Chamber successfully intensified its activities. With regard to 2014, the target remains to further strengthen the membership. Other

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important objectives are the development of a CSR concept, the extension of social media activities, and the realization of the annual German Business Confidence and Wage and Salary Surveys. The regional strategies in Northeast China are to be continued. A new membership concept will be prepared for implementation from 2015 onwards. Mr. Jan-Willem Sudmann, Treasurer, reported on the budget development. The 2013 Actual figures compared favorably to the 2013 plan due to higher membership fees and income from events, which led to a positive result, as expenses grew only slightly. The reports and the activities of the management were unanimously approved. With the end of the two-year period in office, the General Assembly elected a new Board. Eight of nine Board seats were open

The eight candidates who received the most votes (in one case after a run-off) and were elected, are (in alphabetical order): Mr. Martin Broda, General Manager, Commerzbank AG Beijing Branch Mr. Karsten Engel, President and CEO, BMW Group Region China Mr. Xingliang Feng, Executive Chief Representative, NRW.Invest China / Beijing Mr. Lothar Herrmann, President and CEO, Siemens Limited China Mr. Stephan Luerssen, Managing Director, BITZER Refrigeration Technology (China) Co. Mr. Jörg Müller, Executive Vice President, Volkswagen Group China Mr. Kay Popken, Managing Director Strategy and Development China, Lufthansa German Airlines Ms. Susanne Rademacher, Partner and Chief Representative Beijing, Beiten Burkhardt Rechtsanwaltsgesellschaft mbH All candidates accepted the vote. In a following internal session, the new Board unanimously appointed Lothar Herrmann as Chairman of the Board, Stephan Luerssen as Vice Chairman, Martin Broda as Treasurer, and Kay Popken as National Representative to the European Union Chamber of Commerce in China. In closing the official part of the Annual General Meeting, Ms. Voss, on behalf of the whole Chamber, thanked the remaining candidates and the outgoing Board members for their excellent work. The meeting was followed by a buffet reception.

www.china.ahk.de

Breakfast Briefing with Federal Minister Sigmar Gabriel The Federal Ministry of Economic Affairs and Energy, the German Embassy in Beijing and the German Chamber of Commerce in China – North China jointly organized a “Breakfast Briefing with the German Business Community” on 22nd April at the Grand Hyatt Beijing on the occasion of the visit of the German Federal Minister of Economic Affairs and Energy, Sigmar Gabriel, to Beijing. Together with more than 50 business representatives on his visit to Beijing, the German Federal Minister underlined in his welcome speech the strong emerging relationship of Germany with China and Germany’s willingness to enhanced cooperation. In particular, Germany is involved in industries that China regards as strategically important, such as high-tech and green technology, which offers an opportunity for sharing expertise. After the welcome speech, short introduction speeches were given by Dr. Hubert Lienhard, CEO Voith AG and Chairman of the Asia Pacific Committee of German Business, Mr. Michael Clauss, German Ambassador to China, Dr. Stefanie Schmitt, Chief Representative, Germany Trade and Invest China, Ms. Alexandra Voss, Delegate & Chief Representative of the Delegation of German Industry and Commerce Beijing and Executive Director of the German Chamber of Commerce in China – North China.

capital, and the hurdles that German companies may face when sharing their technology were also addressed. Overall, much depends on whether China continues to dismantle business barriers for foreign-invested companies, whether it improves intellectual property rights, Chinese firms increasingly comply with environmental norms and standards, and China further opens restricted sectors of its economy such as public procurement. After the breakfast briefing, the GermanChinese Forum for Energy Efficiency took place at the Grand Hyatt in Beijing hosted by the Federal Ministry of Economic Affairs and Energy, the National Development and Reform Commission (NDRC), the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, the National Energy Conservation Center China (NECC), and the Delegation of the German Industry and Commerce in Beijing. The forum served as a kick-off and a beginning of a closer economic cooperation between China and Germany in the field of energy efficiency.

As a second part of the breakfast briefing, three company representatives and all members of the Board of the German Chamber of Commerce in North China were invited to talk about their business in China and share insights with the audience. The Chairman of the Board, Mr. Lothar Herrmann, President and CEO, Siemens Ltd. began by pointing out differences and common grounds between China and Germany. Stephan Luerssen, Managing Director, Bitzer Refrigeration Technology Beijing and Vice Chairman of the Board, and Mr. Jörg Müller, Executive Vice President, Volkswagen Group China followed with their views about business in China. The speeches gave an overview of the current political, social and economic situation in China as well as invaluable insights from local companies. All in all, the engagement in China has become for many firms one of a “win-win” relationship between two countries whose economies are complementary in the sense of combining German quality and Chinese speed. In addition to the overall positive outcome, the PRC government’s preference for domestic technology, the restriction on free movement of June - July 2014

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REGIONAL NEWS | North China | Chamber Affairs

Regular Social Events - North China Beijing: Kammerstammtisch – every third Monday of the month at 7:00 pm in varying locations (Please visit the event calendar on our website or subscribe to our Newsletters and Invitations) Praktikantenstammtisch – every second Tuesday of the month at Schindler´s Anlegestelle, Beijing, 7:00 pm Tianjin: Kammerstammtisch – every last Wednesday of the month at Drei Kronen 1308 Brauhaus, Tianjin, 7:00 pm Kammerstammtisch in Binhai - every first Wednesday of the month in Binhai Tianjin, alternating Venue 5:30 pm Please always find the latest event calendar on our website: china.ahk.de/chamber/events/

Event Highlights - North China German Ball 2014 under preparation Each year since 2000, the German Chamber of Commerce in China • orth China hosts the largest social event of the German business community in Beijing: The German Ball. The event attracts over 700 guests including business executives and political leaders with connections to and interest in Germany. The German Ball will take place on 15th November, 2014. Companies interested in sponsoring the German Ball should contact Ms. Corinna Schlapps at: [email protected] before 30th June, 2014. Ticket sale starts in September 2014.

Training Calendar Beijing Date 9th-10th June

Training Maturity Level Assurance Training for Project Managers (CN) 16th-17th June VDA 2 – Production Process and Product Ap proval (PPA) (CN) 16th- 27th September Advanced English Course in Business (EN) 19th-20th June Effective Conflict Management (CN/EN) 26th June Problem Solving and Decision Making (CN) 27th June German/European Business Etiquette Training (CN/EN) 10th-12th July Controlling in 3 Stages: Stage 1 “Controlling & Controller” (CN) 11th July Excel: Managing a Database (EN) 21th-22th July Chinese Media Relationship Management Training (CN) 24th-25th July Effective Business Writing in German (GE) 24th July Eco-efficient Production Training (CN)

GCC members receive discounted rates on training courses. For further information please contact: Ms. Jiang Ying ' 010 6539-6712 010 6539-6689 [email protected]

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Training Highlights - North China Problem Solving and Decision Making Date: 26th June, 2014 Objectives and Content Facing complex, open-ended, ever-changing challenges, organizations should realize that constant, ongoing innovation is critical to stay ahead of the competition. As a business leader, how effective you are managing these business difficulties? Can you break thought patterns and think differently? This workshop will teach you how to utilize tools to spark creativity, and enable you to develop a comprehensive approach to solve problems with fresh ideas and make high quality decisions. Target Group Suitable for participants who are managers, with no or some leadership experience, who want to improve their leadership skills and enhance related skills in order to manage their team and cooperate with other teams. Outline n Identifying blocks to creative thinking and expanding our creativity n Application of Creative tools n Problem Solving and decision making based on the KT Model n The process of problem solving n Situational appraisal and problem root causes analysis n Decision analysis – select the most cost effective solution n Risk assessment and management n Establishing contingency plans n Evaluating the solution’s effectiveness after implementation Eco-efficient Production Training Date: 24th July, 2014 Objectives and Content Due to rising costs for resources and operations, it has become essential for industrial enterprises in China to increase their efficiency and to reduce the material intensity of products and the production process. Effective implementation of eco-efficient production practices contributes to an increase in resource productivity, which in turn can strengthen the domestic and international competitiveness of enterprises. In the framework of this training, a comprehensive explanation of the concepts of ecoefficient production and its practical application in addition to case studies will be provided to the trainees, in order to improve their ability to implement related measures. Target Group Operation managers, product researchers and developers, production managers, equipment purchasers, production facility designers and managers. Outline n Concepts of eco-efficient production methods - Definition and meaning - Related verification and technologies n Efficient use of resources - Energy - Water - Raw and auxiliary materials n Measures for „cleaner production“ - Enhancement of technology - Upgrade of equipment - Improvement of processes n Waste management - Waste water treatment - Exhaust gases handling - Solid waste management

www.china.ahk.de

New Benefit Partners North China For a detailed description about our Benefit Partner Program, please visit our website: http:// china.ahk.de/chamber/benefit-partner Beijing Insupro 鼎源万家 RM 205, Beijing Image Tower One, No.115 Fucnenglu, Haidian District, Beijing, 100142 中国北京海淀区阜成路115号北京印象1号楼205室 邮编：100142 Contact: Mr. Carl-Ludwig Doerwald, Mr. Jeffrey Chen Phone: 0 (10) 88138505 Email: [email protected], [email protected] Web: www.insupro.net, www.insupro.com Benefit: We will help you find the most suitable health insurance for you and your employees and business insurance for your company.With Insupro Benefit Insurance you will enjoy a minimum discount of 10% on your new insurance.

Beijing Mandarin House 美和汉语（北京） Suite 317, Tower 16, 89 Jian Guo Road, 100025 (We deliver effective Chinese course anywhere in Beijing. Welcome to visit our school for a free trial!) 朝阳区建国路89号16号楼317室, Beijing10002 Contact: Ms. Jasmine Bian Phone: 400-633-5538 (toll free) Email: [email protected] Web: www.mandarinhouse.com Benefit: Free Chinese course, Valued up to 2,500 RMB. (call 400 633 5538 for further information, please mention "German Chamber of Commerce" to your consultant. We look forward to hearing from you!).

Renaissance Beijing Capital Hotel 北京富力万丽酒店 61 Dongsanhuan Middle Road, Chaoyang District, Beijing 100022, 北京市朝阳区东三环中路61 号，邮编100022 Contact: Ms. Clara Bezier Phone: 0 (10) 5863 8888, 0(10) 5863 8694 Email: [email protected] Web: www.renaissancebeijingcapital.com Benefit: 20% on all F&B consumption except alcoholic beverages and in-room dining. (Fratelli Fresh, Fratelli Gourmet, Fat Duck and BLD).

CICADA UltraLounge N4-33 Tai Koo Li Sanlitun North, 11 Sanlitun Road, Chaoyang District, Beijing 100027 北京市朝阳区三里屯路11号三里屯太古里北区 N4-33 邮编100027 Contact: Mr. Catalin Ichim Phone: 0 (10) 64189898 Email: [email protected] Web: www.facebook.com/CicadaBeijing Benefit: 10% discount on the total bill.

Transit Restaurant 渡金湖餐厅 N4-37 Tai Koo Li Sanlitun North, 11 Sanlitun Road, Chaoyang District, Beijing 100027 北京市朝阳区三里屯路11号三里屯太古里北区 N4-37 邮编100027

Tianjin Arrial Dental 瑞尔齿科 Room 302, Tianjin International Building, No.75 Nanjing Road, Heping District, Tianjin 天津市和平区南京路75号天津国际大厦302室 Contact: Ms. Janet Lee Email: [email protected] Phone: 0 (22) 2331-6219/6210/6207 Web: www.arrail-dental.com Benefit: Free registration; 30% off for teeth cleaning; 10% off for all treatments (exclude X-ray, CT, medicine and materials).

Contact: Mr. Catalin Ichim Phone: 0 (10) 64179090 Email: [email protected] Web: www.facebook.com/TransitBeijing Benefit: 10% discount on the total bill.

Shenyang Traders Hotel Shenyang 沈阳盛贸饭店 68 Zhonghua Road, Heping District, Shenyang, 110001 沈阳市和平区中华路68号， 110001 Contact: Mr. Simon Knebel Email: [email protected], simon.knebel@ tradershotels.com Phone: 0 (24) 2341-2288 Ext. 6315 Web: www.shangri-la.com/shenyang/traders Benefit: 15% discount on food & beverage, except events.

www.hoermann.cn

Tel. +86-10-8722 3388 Fax +86-10-8722 3366

June - July 2014

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REGIONAL NEWS | Shanghai | Member Affairs

Thanks to Our Yearly Sponsors 2014/15

Shanghai Office

BUBEN&ZORWEG Opens New Boutique In Xiamen Dr. Daniel Mohr, General Manager of BUBEN&ZORWEG in China, is excited to announce the further expansion of the company's presence, and the good reception of the brand in China. The 80m 2 boutique is located in the Duty Free zone in Xiamen and is filled with some of the most precious high-end creations of the BUBEN&ZORWEG collection. A Feng Shui Master was consulted before the grand opening, and selected 18th January at 9:00 as the most auspicious time for the inauguration of the boutique.

Weber Founds China Subsidiary With the foundation of its new subsidiary, Weber is aiming to enter the Chinese luxury car market. The production hall

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will be a workplace for approximately 20 employees. The goal is to develop sales to approximately EUR 8mn within the next five years. The planned production includes injection-moulded parts, surface decoration and component assembly of ashtrays, cup holders and engine compartment covers. China is the world’s largest growth market and, at the same time, the concept of internationalisation is taking on ever greater significance in the automotive industry. According to Dr. Thomas Zipp, managing partner of the Weber Group, this is particularly evident in global tenders for upcoming vehicle generations. Weber has assumed a clear position on the world market and is now present locally with its own subsidiary producing exclusively for the Chinese market.

A.T. Kearney Greater China Expands its Team In July 2013, management consulting firm A.T. Kearney announced the appointment of Mr. Andreas Graef as member of its automotive and industrial client leadership team in China. Mr. Graef, a principal based in A.T. Kearney’s Shanghai office, advises multinational and local Chinese automotive and industrial companies on strategic and operational issues. Mr. Graef has worked for leading manufacturers, suppliers and distributors of automotive vehicles and industrial equipment across China, South Korea, Japan, India, Europe and the USA. He has lived in China since 2011, and his main competence areas are business strategy, post-merger-integration, product development, purchasing, logistics, sales, and aftersales.

www.china.ahk.de

Handte Environmental Technology Acquired by Camfil Group Camfil group, which is the worldwide leading producer of air filtration and clean air solutions, has acquired Handte Environmental Technology. The whole Handte Group, with its locations in Germany, Switzerland, Czech Republic and China, was bought on 31st January 2014. “Handte fits very well to Camfil. The acquisition will extend our range of products and will give us a considerable growth for know-how, technology and production for systems and solutions in the metal industry in Europe and Asia,” said Mr. Magnus Yngen, CEO of the Camfil Group. Dr. Jakob Handte, who was the former director and now the technical manager of the Air Pollution Control unit, said, “Camfil was one of the favorite strategic partners for Handte Group, which closed the business year 2013 with record results.” MR PLAN Responds to Growing Technical Requirements in China MR PLAN GmbH continues to grow and expand in new markets. On 1 st February 2014 in China, MR PLAN GmbH established MR PLAN (Shanghai) Engineering Consulting Co., Ltd. to support its customers on site in their growing demand in sustainable factory planning, proficient project management, efficient logistic and production planning, manufacturing engineering and technical consulting. “Some major projects, which we have already started in Beijing, Shenyang and Shanghai, show us that the decision and time to come to China was more than right, it was even a necessity,” said Mr. Viktor Ungemach, CEO of MR PLAN (Shanghai) Engineering Consulting Co., Ltd. “China’s industrial environment is changing very fast. In our opinion increasing technical requirements, expanding industrial automation, rising standards and growing production costs are the main challenges for our customers in China. We are convinced that we will have further interesting projects in the future.” New Managing Director at Schoeller Allibert As of 1st April 2014, Mr. Robin Liu has been appointed Managing Director of Schoeller Allibert China. Mr. Liu joined Schoeller Allibert in June 2013. His experience spans over 16 years in the packaging industry, having worked for major western packaging company, and was responsible for setting up their manufacturing operations in China. Mr. Liu states that one of his main areas of focus will be to increase returnable packaging awareness

through local manufacturing of high quality reusable material handling products. Some of these, such as the VDA approved KLT container range and the Magnum large folding pallet box, are widely used within the German Automotive market. “Mr. Liu’s experience in returnable packaging will greatly benefit our sales and operational organization in China,” said Mr. Witold Orlowski, Director Asia Pacific. Mr. Liu is looking forward to this new opportunity.

ZF Appoints New Asia Pacific President and CFO

5th Shanghai International Aviation & Space Fair to be Held Sponsored by the Shanghai Association for Science and Technology and Shanghai Society of Aeronautics, and organized by Hannover Milano Fairs Shanghai Ltd, the 5th Shanghai International Aviation & Space Fair will be held from 26th to 28th June at the Shanghai Exhibition Center. Successfully held four times since 2005, the show this year will convene international aircraft manufacturers – including Bombardier, Embraer, Cessna, Eurocopter, SSA and COMAC – to showcase all kinds of airplanes, jet engines and related products and technologies. Professional visitors and buyers are invited from all over the world, including countries and regions such as Germany, UK, France, Italy, Russia, the US, Chinese Taiwan and Hong Kong. Concurrent events such as the China Airports Development Summit, the China Aviation Transportation Forum and a model airplane contest will be held, as well as panel discussions to discuss the latest hot topics and forecast market trends.

Mr. Rudi von Meister (left in photo), who has more than 30 years of experience in the automotive industry in the region, was appointed as President ZF Asia Pacific at the beginning of 2014, and will assume responsibility of bundling ZF’s operations throughout the region. Additionally, ZF also appointed Mr. Gottfried Sihler to CFO Asia Pacific. Mr. Sihler will be responsible for finance, controlling and IT in the region from 2014. The appointment of both men signals an increased focus on the expansion of ZF’s activities in Asia Pacific. In 1987, ZF opened its first representative office in Asia-Pacific. Since then the region has become increasingly important to ZF, and is today one of the company’s most important international markets after Europe.

M+W China to Work with Merck Pharmaceutical Manufacturing M+W China has been awarded the opportunity to provide the engineering design, procurement, construction management and validation services for Merck’s green field facility, which is designed to manufacture multiple types of oral solid dosage (OSD) in their final packaging for the Chinese market. The facility will be located in Nantong, Jiang Su province, on a 40,000m2 site with a total building area of approximately 38,000m2. The site consists of a production building, a warehouse and logistics building, central utilities, a fire fighting pump station, a canteen, an office and guard houses. The OSD capacity of the factory is planned to reach 2.4bn tablets per year in phase one and is planned to be operational by end of 2016.

UNITY sets up Office in Shanghai

On 1st March, the management consultancy UNITY opened an office in Shanghai. UNITY has been successfully carrying out projects in China for several years. With UNITY Business Consulting (Shanghai) Co., Ltd., clients will now receive better support on site. Dr. Alexander Suhm, partner UNITY AG, is assuming management of the new local subsidiary alongside the managing director, Mr. Hu Xiaolong. The main focus is on supporting big multinationals, large enterprises and SMEs from different sectors. The management consultancy aims to establish a team of 20 advisors in Shanghai within two years. “For an execution-oriented consultancy, it is important that consultants can achieve project goals in the language and culture of the client with their operating units," explains Mr. Hu, who has previously worked for other German management consultancies in China. June - July 2014

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LANXESS and Hankook Tire Sign MOU

German specialty chemicals company LANXESS and Korean Hankook Tire have signed a memorandum of understanding to jointly study the development of new high-performance synthetic rubber grades and applications that increase the performance of tires from the early stages of product development. “LANXESS has a strong reputation for sophisticated and customized R&D efforts and for having 'innovation' as its key driving force. In this new technical partnership, we will assist Hankook Tire in achieving a key position as a global tire maker producing high-quality products based on leading-edge technologies,” said Dr. Joachim Grub, head of the Performance Butadiene Rubbers business unit. LANXESS, the world’s largest synthetic rubber supplier, provides highperformance synthetic rubbers to globally leading tire makers. LANXESS and Hankook Tire have maintained a close partnership since 2008, when Hankook Tire awarded LANXESS a long-term contract to supply solution styrenebutadiene rubber and neodymium performance butadiene rubber – both core materials for highperformance tires. Boehringer Ingelheim Certified Top Employer China 2014 Boehringer Ingelheim, the German familyowned pharmaceutical company, received Top Employer China 2014 Certification early this year. Top Employer Certification is based on a survey program in the field of human resources management, aiming at examining enterprises through the following five aspects of HR policy: primary benefits, secondary benefits and working conditions, training and development, career development, and company culture. Boehringer

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Ingelheim’s achievements in these five areas gained it the recognition of the Top Employer institute. Recently, Universum announced the China Top 100 IDEAL Employers 2014 rankings, in which Boehringer Ingelheim was named 57th among the Top 100 IDEAL Employers and recognized for its “inspiring management” by university students in the country. The results were determined by an annual survey held in China since 2006, which saw participation from over 51,000 university students from 103 top universities across the country. SSI Schaefer Completes New Extension in Johor Factory

The new extension of SSI Schaefer’s steel manufacturing production area started operation in early February 2014. This investment includes a new German made rolling mill similar to machines operated by its parent company in Germany. This rolling mill will roll all profiles that are used in AS/RS or Rack Clad Buildings, plus machinery for the preparation of special steelwork profiles. “We are seeing an increase in enquiries for high rise racking systems due to rising land and labor costs. Shipping heavy steel profiles halfway around the world is obviously not cost effective. Hence, to cater to the growing demand for high rise racking systems from APAC and Middle East / Africa, SSI Schaefer management has agreed that Asia should become a competence center for the design and supply of these systems,” said Mr. Brian Miles. With this latest addition, SSI Schaefer’s production and warehousing at its Simpang Renggam site in Johor now has a total floor area of 34,000m2, with a staff of 350. Bilfinger and Siemens Inaugurate Joint Venture The grand opening ceremony for DBEST (Beijing) Facility Technology Management Company took place on 2nd April in Beijing. DBEST is the new joint venture company founded by Bilfinger HSG International Facility Management Ltd., Beijing International Technology Cooperation Center, and Siemens Ltd., China. The intention of the new joint venture is to bring positive impact to China's property industry and to contribute to improve China’s FM technology standards. With a strong focus on technical FM services for industrial and office buildings, the company provides services and technology for sustainable and cost-efficient operations to public facilities,

buildings, hotels, office and industrial parks and civilian residential facilities. DBEST initially started in March 2014 as the FM service provider for assigned buildings and industrial locations of Siemens across China. It will further serve other domestic and international companies in China with integrated FM services. Karl Gross Logistics Gains New Team Member The Shanghai office of international freight forwarder Karl Gross Logistics (Shanghai) Co., Ltd. recently welcomed Ms. Sarah Zhang as a new team member. Ms. Zhang supports Karl Gross as sales executive. Her focus is on taking care of German speaking customers in China. Ms. Zhang was born in China and spent numerous years in Germany, where she successfully completed her studies of Economics. Afterwards she worked as Events & Marketing Manager at the German Center Shanghai. This background allows Ms. Zhang to be fluent in German, Chinese and English. “With welcoming Ms. Zhang, we once more bring to life our strategy to set up our teams in a way that will allow us to not only provide our customers with competent logistics solutions but also assist in bridging challenges resulting from differences in culture and language,” said Mr. Martin Kollmann, Karl Gross Managing Director. CMS Wins Award, Gains New Partner Mr. Holger Adam joined CMS, China as partner in February 2014. Mr. Adam has focused on advising Chinese companies investing in Europe since 2001. His major clients are Chinese state owned enterprises. Mr. Adam will divide his time between Shanghai and Germany. CMS, China received a series of recognitions for their advice in 2013 and early 2014. Led by managing partner Dr. Ulrike Glueck, the team won the awards Law Firm of the Year (M&A) 2013, from China Business Law Awards; Deal of the Year 2013, from China Business Law Journal, and Top 15 Firms to Watch in 2014 and 2014 Leading Firm in IP Law, both from Asian Legal Business, Reuters.

www.china.ahk.de

Body and Soul Celebrates 10th Anniversary Body & Soul – Medical Clinics are celebrating their 10th anniversary of providing integrative health services in Shanghai. Ms. Doris Rathgeber established the first clinic after completing TCM training in Shanghai in order to offer TCM (Traditional Chinese Medicine) in a professional healing environment. Since then, the clinics have grown to four locations with in-house labs, pharmacies, and an array of TCM and Western medical services. “We are now not only the one and only TCM provider for foreigners, but also the largest pain management and rehabilitation center in Shanghai with a team of over 40 Chinese and international specialists,” explains Ms. Rathgeber. Body & Soul is both a member and a Benefit Partner of the German Chamber.

Dörken MKS-Systeme Opens New Office and TechCenter in Shanghai The Chinese Dörken Days took place in Shanghai 17th to 18th February 2014. Within this context the new Dörken MKS (Shanghai) Co., Ltd. office was opened in the district of Zhabei. The company hopes to reaffirm its commitment to the Chinese market with this new larger office. In 2005 Dörken started with a small representation in Shanghai to supervise 11 licensees locally. In the meantime, the Chinese

base has grown, and now looks after 18 licensees and possesses a TechCenter from which Chinese and Western automotive manufacturers as well as companies from the whole supply chain are supervised by local employees. With this move into the new offices the company’s service can improve to become more effective, more efficient and less complicated, so that Mr. Andrej von Hofman (General Manager China) and his team will be able to fulfill the clients’ demands more precisely. Unify Attends CeBIT, Launches Roadshow Series This year’s CeBIT, the world’s largest computer expo, was held from 10th to 14th March in Hannover. The theme was "The new way to work" (#NW2W), with a focus on employees and their need for secure communication and collaboration in the workplace. At Unify’s booth visitors could not only immerse themselves in the look and feel of the new Unify brand, but can also tour four different “experience islands,” where the work of today and tomorrow are increasingly taking place. With its “NW2W” road show, Unify China has also launched a modern and future-proof all-in-one solution named “OpenScape Business” for unified communication and collaboration, especially tailored to the requirements of small and medium-sized enterprises with one or more

locations. The 1st round of the road show has been successfully held in Shanghai, Beijing and Shenzhen in March 2014. METRO Opens Wholesale Center in Xuzhou, Jiangsu METRO Cash & Carry, the world’s leading business-to-business wholesaler, recently announced the opening of its 76th store in China, located in Xuzhou, Jiangsu Province. “Xuzhou is the first of a number of stores we’re going to open this year. Meanwhile we will continue expanding and deepening our sales channels in China in the coming years to sustain robust growth.” said Mr. Jeroen de Groot, President of METRO China. “We are a leader in the wholesale industry. Our leading position in quality assurance and food safety gains trust from our customers. Our ambition is to be the champion for small business, to make our customers more competitive in their businesses. We win when our customers win.” Since the opening of its first store in Shanghai, METRO has established in East China a network of 35 stores covering 24 cities. METRO Xuzhou store is the 17th location in Jiangsu province.

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REGIONAL NEWS | Shanghai | In Person

What is your personal and business background? I grew up in China and spent many years living in Germany. After studying at the University of Hannover I worked for a short while in the engineering profession. Since 2003 I have worked for various technology oriented management consultancies, including TMG Consultants in Stuttgart. In my last position, as the managing director of Staufen AG’s subsidiary in the country, I helped drive strong business growth in China. My areas of responsibility there were sales, project business, and human resources. In January 2014 I moved to UNITY and joined the management team of the Chinese subsidiary. Together with Dr. Alexander Suhm, a partner at UNITY AG, we are taking over the reins at this national subsidiary. Tell us a little about your company and activities in China. UNITY has been leading successful projects in China for several years now. Since March 2014 the management consulting firm has had its own Chinese subsidiary in Shanghai. With UNITY Business Consulting (Shanghai) Co., Ltd. we are now able to offer our local customers even better support.

Xiaolong Hu Company: UNITY Business Consulting (Shanghai) Co., Ltd. Job Title: Managing Director Year of Foundation: 2014 HQ: Paderborn, Germany Main Business: Business Consulting Number of Employees: 170 Revenue: EUR 22.1mn Why did your company choose to locate where it did?

What kind of benefits can companies using your services in China get?

China is the global leader in many sectors in terms to sales and production volumes. German companies have gained a firm foothold in China and are now looking to build on this. Chinese manufacturers are, however, catching up quickly. There is, as a consequence, a great need for action, and to this end UNITY can offer our customers and their suppliers in China excellent support. Our target customers are mainly the Chinese subsidiaries of German companies as well as Chinese joint venture partners. Shanghai, as our first location in China, offers the opportunity to support our existing and new target customers in an optimal way.

With our close links to research and our continuous dialog with the scientific community, we can promise our customers consulting services that are forward-looking and based on the current state of research, such as the ideas surrounding Industry 4.0. So in China, as elsewhere, our approach can be characterized as ‘future oriented corporate management,’ with our objective being to make our customers successful in the long term through increasing their innovative power and operational excellence.

Management consultancy for future-oriented corporate management

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CONSULTING & INNOVATION

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REGIONAL NEWS | Shanghai | Member Affairs

BME China Holds Steel Procurement Conference The Shanghai office of the German Federation of Purchasing, Materials Management & Logistics (BME CHINA) is proud to announce the 1st BME China Steel Procurement Conference. The conference was held on 29th May 2014 at the JW Marriott Hotel Tomorrow Square, Shanghai. Experts shared their experience of challenges and solutions for optimizing steel procurement. The conference granted insight into the current and future steel market developments and offersed an opportunity to discuss the following topics with experts: current perspectives of the steel market in China – conditions and outlook for the future; quality and service management of steel products in China – solutions for European SME’s; supply difficulties – which steel products are affected? And minimum order quantity (MOQ) – what are the opportunities for European SME’s?

Century 3 Receives Award From Evapco Shanghai Century 3 Construction Co., Ltd. is proud to announce that it has been awarded the Excellent Project Management, Design and Construction Team Award from Evapco for outstanding contributions to Evapco’s Phase II project in Baoshan District, Shanghai. Mr. Jian Chen, Century 3’s Project Manager for the 5,000m2, RMB 30mn project, received the honor from Evapco as recognition for the Century 3’s exceptional project management, design and construction services. “We appreciate Century 3’s effort to have delivered the project at a performance level beyond our expectations,” said Mr. Andrew T. Stockman, Director of Evapco’s International Operations. “The open and transparent communication helped us develop solutions together whenever we faced a challenge. We anticipate future success as we will continuously work closely with Century 3.”

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FSB Attends Industry Event

FSB will attend Architect @ Work on 12th and 13th June in Shanghai. New handles, locks and hardware solutions will be presented at the event. Besides FSB, the other four members of “Made by Design” (a German brand union in China) will also participate in A@W. At the event, MBD will announce the start of the 5th Design Tour. New German Tax Manager at PwC Shanghai The European tax desk of PwC China in Shanghai was enlarged recently by the arrival of Mr. Lukas z M ehl , the newest member of the accounting firm’s German Business Group. As a certified German tax advisor (Steuerberater), he has worked for more than seven years in the International Tax Services practice at PwC Hannover. Thus, he brings wide experience in issues including tax treaty application, PE issues, transfer pricing, secondment arrangements, transfer of functions, international restructuring, VAT, customs and individual income taxation. Mr. Mehl has been assistant lecturer at universities of Osnabrueck and Hameln. At PwC China’s Shanghai office, Mr. Mehl will – together with Tax Director Mr. Alexander Prautzsch – focus on advising German and European clients regarding their investments in China on Chinese and international tax matters. Mr. Mehl succeeds Mr. Ulrich Reuter, who will move back to PwC Germany’s Munich office. Kiekert Participates in Beijing Automotive Exhibition Kiekert AG, the locking system specialist for the global automotive industry, presented its new modular latch platform at the Beijing Automotive Exhibition in April. The new lightweight platform generation unites an intelligent system architecture, robust quality and compact dimensions comparable to those of modern smartphones. The lightweight

platform can be expanded with a wide range of functions. These include a modern electric opening function and modular power closing of the kind currently only available in full-size premium vehicles. The Beta latch, launched in 2011 and manufactured on fully automated production lines at Kiekert’s facility in Changshu, has already seen millions of orders from global automakers.

Würth Reversible Ratchet 1/2" Rated Among 2013 Top 20 Repair Tools On 25th February 2014, Würth Reversible Ratchet 1/2" received the “2013 Top 20 Repair Tools Award,” which was jointly presented by the China Auto Maintenance Equipment Industry Association (CAMEIA) and Motor China magazine. Over 200 distinguished guests – including representatives of government agencies, trade associations, businesses, scholars, experts and professional jury members – gathered to bear witness to the presentation of the award. The award winning item is a rugged ratchet. This product received unanimous approval from the professional jury as a booster to the efficiency and quality of mechanic’s work. Würth always puts quality in the first position. Würth is proud to see its products recognized by the Chinese market. Waldorf Astoria’s Long Bar Gains New Manager Waldorf Astoria is proud to introduce its awardwinning mixologist Nelson Bernardes, who has previously worked at Waldorf Hilton London. With over 15 years’ experience in some of the world’s most exclusive bars, Nelson will present a brandnew Long Bar menu featuring luxury, classic, seasonal and Long Bar signature cocktails. In 2013, Bernardes competed along with 250 other bartenders over the world in the prestigious Bacardi Legacy competition, and was chosen as one of the competition's "Three Most Promising" bartenders. Earning this honor has enabled him to hone his craft by teaching master classes and guest bartending at the best bars in cities like Stockholm, Prague, Paris, Rome, Lisbon and Edinburgh.

www.china.ahk.de

Bayer Products Used in Solar Powered Aircraft The decisive second Solar Impulse aircraft has now been completed. The plane, which is to be the first to travel around the world entirely without fuel in 2015, was unveiled in Switzerland. On board are innovative products from Bayer MaterialScience that contribute to making the plane energy efficient. On its journey around the world, the plane is to be powered by the sun and is able to continue flying day and night. Bayer MaterialScience is responsible for the design of the cockpit shell. Baytherm Microcell is used for the aircraft door, while the rest of the cockpit shell is made of a different type of rigid polyurethane foam from Bayer MaterialScience. Outside the cockpit, rigid polyurethane foam from Bayer MaterialScience is used to insulate the batteries. The company also provides the materials for the coating covering large portions of the aircraft.

New General Manager at VWTS Mr. Franz Friedrich Butz has been assigned by the board of directors as General Manager of Volkswagen Transmission (Shanghai) Co., Ltd. (VWTS). He has over 12 years of experiences in foundry in the ThyssenKrupp Group, and before joining VWTS he worked as plant manager for VW foundry plant in Hannover. VWTS is facing enormous challenges this year. By the end of October 2014, VWTS will move from Jiading to Anting, and the new production process of heat treatment and shaft turning will be implemented in the new plant. Meanwhile, the delivery to customers will be guaranteed. Mr. Butz possesses outstanding leadership abilities and has acquired a wide experience in plant management. He will make great efforts to lead VWTS to finish the moving project and achieve a more successful future.

CupTM campaign in China on 10 th April, aiming to promote the brand and engage with its target audience. The company has also acquired an extensive rights package from 2015 AFC Asian CupTM by being the first tire manufacturer to sponsor a top Asian football tournament in the industry. Continental Tires has become one of the leading sponsors in international and regional football tournaments for the last 18 years. “We see great enthusiasm in Chinese football fans,” said Mr. Jay Dhillon, General Manager of Continental Tires Trading (Shanghai) Co. Ltd. “China is one of the most important markets for us and we’re keen to continue our global success here to further strengthen the emotional bond between our brand and Chinese consumers.” After the kick-off ceremony today, a series of football marketing activities will be launched in China.

Continental Tires Sponsors 2014 FIFA World Cup and 2015 AFC Asian Cup in China Continental Tires, the world’s leading tire manufacturer, launches its 2014 FIFA World Hager Signs Agreement with Greenland Group Hager is pleased to announce its joining Greenland Group in its growth as an international real esta te de ve l ope r . Greenland, one of the leading developers in China, is selected again by Fortune magazine as 2013 World Top 500 Enterprises, ranking 359. This has been a quick rise as in 2012 it was only 483. To thank the support from its suppliers, Greenland hosted the 2014 Strategic Partner Conference on 17th April in Shanghai. As a German supplier of low voltage products, Hager has been cooperating with Greenland since 2002. Mr. Fournier, the Country Manager of Hager, was invited to the conference to sign on site the 2014-2016 Strategic Partner Agreement in honor of Hager’s service to Greenland. During this meeting Greenland also introduced its overseas projects in Korea, Australia and United States. In 2014 Greenland is targeting at a global sales turnover of RMB 240bn.

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EWM HIGHTEC WELDING (Kunshan) Ltd. 10 Yuanshan Road, Kunshan New & High-Tech Industry Development Zone, Kunshan, Jiangsu, 215300 P.R.China 伊达高科焊接(昆山)有限公司 江苏省昆山市昆山高新技术产业开发区圆山路10号 邮编: 215300 Phone: +86(0) 512 57867188 Fax: +86(0)512 57867182 www.ewm.cn · [email protected]

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REGIONAL NEWS | Shanghai | In Person

Tom Kane Company: Rotary Club Shanghai Job Title: President Year of Foundation: First established in Shanghai in 1919 HQ: Chicago, USA Main Business: Humanitarian Organization Number of Members: 1.2mn globally

What do you believe to be the most pressing social issues in China today? Disparity in wealth, corruption and the effects of environmental degradation - water, food production and air.

result should be a quantifiable contribution to the bottom line, thus justifying the expense to shareholders. Structured as such CSR schemes are open to companies of any size; it’s just a matter of creating the right scheme for the right venture.

How can CSR concepts be applied to SMEs?

What are some major challenges of leading CSR projects in China?

Good CSR programs should be viewed as a legitimate company expense that drives increased sales because it strengthens brand and company reputation, and improves staff productivity, problem solving skills, retention and company pride. In China it can also extend and reinforce important government and client networks. The ideal end

I think with all CSR schemes there is a skill in achieving the balance between doing good for the community and serving the company’s commercial interests. In China, where regulations on charitable activities continue to develop and where corporate transparency is not always clear, there is a danger that CSR schemes may have difficulty

ROTARY CLUB SHANGHAI

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in achieving that balance. However, this a rarely a reason for not doing them, but merely a challenge that needs to be worked at. What has been a major success of Rotary in China and globally ? I think Rotary’s work on polio continues to be of major importance to humanity. There is no doubt that the easy and well designed structure that Rotary provides to support well meaning groups of people around the world to get together, raise some money and tackle and solve issues in their communities is a major contribution to improving the lives of millions around the globe. What are your major goals for Rotary in the future? Once I hear that Polio has finally been eradicated I shall go on a major drinking binge to celebrate. On a more regional level, I think it is important to continue working with the Chinese government to help build better and stronger linkages so we can all continue to contribute to helping improve the lives of ordinary people. Internationally, I am hopeful environmental concerns will take an even greater part in Rotary’s global focus as this is an area where we all share a common goal. We all want to live in a better, cleaner and safer world.

www.china.ahk.de

CONTUR Business Consulting Opens Subsidiary in Shanghai

With over 15 years of experience in consulting companies in Europe, CONTUR is now exploring the Asian Market with a 100% subsidiary in Shanghai. The recently opened office in China’s business metropolis is now offering local personnel and organizational development programs (in-house trainings, qualifications for expats, onboardingprograms, coachings) with a team of intercultural trained professionals. general manager of CONTUR Shanghai, Ms. He Xiaoli, has over 20 years of experience in German-Chinese relations and has worked both in Germany and China. "We want to be closer to our globally acting customers in China and be a more intensive part of the business development in Asia by offering tailor-made solutions for our customers’ individual needs," said Dr. Angelika Schrand, General Manager of CONTUR GmbH, as the reason for opening a subsidiary in Shanghai. Voith Paper Attends CPPI Industry High-level Summit Voith Paper attended the CPPI Industry Highlevel Summit on 19th March. Ms. Mingming Liu, President and CEO of Voith Paper Asia-Pacific, was invited to give a keynote speech on the Summit. The topic of Ms. Liu’s speech was how to promote the innovation and development of paper industry in new situation, which started from talking the situation of global paper industry and ended with three potential areas for development in the future Chinese paper industry, namely Board and Packing, Tissue and Specialty Paper. Her speech was very much welcomed and hotly debated. The attendees, especially the paper suppliers, were

very interested in these three develop areas she presented. The CPPI Industry High-level Summit is held annually and is one of the most important summits in Chinese paper industry, guided by China Paper Association and sponsored by CPPI (China Pulp&Paper Industry Magazine). Bureau Veritas Provides Construction Services for BLOGIS Recently, Bureau Veritas and BLOGIS Holding Limited have reached an agreement. Bureau Veritas will provide project management and construction supervision (“Jianli”) services for BLOGIS’ Nantong Logistics Park. After Bureau Veritas’ successful performance of project management services for their Guangzhou Logistics Park (2012) and construction supervision services for their Wuhan Logistics Park (2013), Bureau Veritas has been selected yet again for their next large-scale logistics park construction project. For the new Nantong project Bureau Veritas will extend their support to higher value-added services; fully integrated project management and construction supervision. Through this value-added approach, Bureau Veritas shall be able to combine its project management experience within the construction industry with international quality and safety management as well as China construction supervision (“Jianli”) practices to meet the requirements of owners and be in compliance with government regulations. Oxford EMBAs Visit WITTENSTEIN China EMBA Students of the University of Oxford visited WITTENSTEIN (Hangzhou) Co., Ltd. on 8th April 2014. Mr. Hai Lei, the Managing Director of WITTENSTEIN China, hosted the visit and delivered a lecture to share his views on the challenges of doing business in China and the solutions to these problems. During the two-hour meeting, topics including economic trends, corporate strategy, coordination with headquarters, recruiting and retaining talents, preferential policies, intellectual property protection, anti-bribery, etc. were addressed and discussed extensively. Ms. Kathy Harvey, Director of Oxford EMBA, headed this

visit. She expressed gratitude to Mr. Hai and his company on behalf of the program and students, saying they were hugely enthusiastic and incredibly pleased with this meeting, and hoped to continue such exchanges in the future. Qingdao’s Sino-German Ecopark (SGE) German Enterprise Centre is awarded DGNB Gold Precertification energydesign (Shanghai), as the DGNB auditor, is proud to announce that Qingdao’s Sino-German Ecopark (SGE) German Enterprise Centre is the first Mix-use project to be awarded the DGNB Gold Precertification in China. To achieve this level of sustainability, an enhanced collaborative process was adapted to the traditional sequencing of the construction process, in order to include an Integral Planning team, input from users and Facility management in design decisions, anda variant comparison methodology. These process improvements, thanks to a great response from SGE team in Qingdao, led to the planning of sustainability aspects including solar thermal DHW, a gravity grey water reuse system, rainwater phytoremediation, floor heating,higher-performance envelope and glazing, optimized lighting, and upgraded acoustics and noise protection. Next steps, such as material protocol, site supervision or measurement and verification plan will ensure good implementation of all DGNB qualities.

Weiss-Röhlig moves

Weiss-Rohlig China Co., Ltd. Unit 1712-1719, Corporate Avenue 1, No.222 Hubin Road, Shanghai 200021, China T +86.21.6340.6000 | F +86.21.6340.6858 | [email protected] | www.weiss-rohlig.com

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REGIONAL NEWS | Shanghai | Member Affairs

New Members SHANGHAI For full contact information and company profiles of our new and existing members, please visit www.german-company-directory.com

Mr. Christian Berlin Managing Director Shanghai Imperial International Freight Fowarder Co., Ltd. Shanghai ' 021 6271-5050 [email protected] www.imperial-international.com

Mr. Rolf Koehler Director CanadAsia Management Development (Shanghai) Co., Ltd. ' 021 5090-3654 [email protected] www.camdltd.com

Mr. Wufu Qian General Manager Nanjing Mennekes Electric Appliances Co., Ltd. Nanjing ' 025 5212-5588 www.nanjing-mennekes.cn

Mr. Markus Bernhuber CEO Lisec Shanghai Glass Machinery & Glass Technology Co., Ltd. Shanghai ' 021 6073-0055 [email protected] www.lisec.com

Mr. Ralph Kuhlmann General Manager Sun Fortune Trading (Suzhou) Co., Ltd ' 0512 6936 5969

Mr. Heinz Schuhmann Shanghai ' 139 1022 7715 [email protected]

Mr. Axel Kuhlmann Shanghai ' 131 4389 6142 [email protected]

Ms. Elena Stepanek Shanghai ' 021 2215-7629 [email protected]

Mr. Frank Labohm Executive President LABOM Measuring Instruments (Kunshan) Co., Ltd. ' 0512 3685-3959 www.labom.com

Dr. Patricia Umbeer DDS French Dental Clinic Shanghai ' 021 5169-9696 [email protected] www.frenchdentistshanghai.com

Mr. Li Li General Manager Tweddle Group China Shanghai ' 021 5058-0500 [email protected] www.tweddle.com

Mr. Andreas Walter Managing Director Eppendorf Lab Technologies (Shanghai) Co., Ltd. ' 021 5810-9725 www.eppendorf.cn

Mr. Markus Muessig Associated Partner MHP (Shanghai) Management Consultancy Co., Ltd. ' 021 6058-0963 www.mhp.com

Mr. Shiran Wang Chief Representative China LucaNet Finance Consulting (Shanghai) Co., Ltd. ' 021 5119-6838 [email protected] www.lucanet-china.com

Mr. Klaus Fichtelberger General Manager Wuerth Baier & Michels (Shanghai) Automotive Fastener Co., Ltd. ' 021 6715-6028 [email protected] www.baier-michels.com Mr. Marcel Flikweert Shanghai ' 138 1650 5672 [email protected] Mr. Thorsten Giertz CEO Shanghai ' 021 3465-3695 [email protected] www.emeneo.com Ms. Xiaoli He General Manager CONTUR Business Consulting (Shanghai) Co., Ltd. ' 021 2601-1593 [email protected] www.contur-online.com Mr. Juergen Heise General Manager /Legal Representative Lehvoss (Shanghai) Chemical Trading Ltd. [email protected] www.lehvoss.de Mr. Xiaolong Hu Managing Director Unity Business Consulting (Shanghai) Co., Ltd. ' 021 5888-6177 [email protected] www.unity-consulting.cn Mr. Martin Huprich CEO / General Manager Seaworthy Packaging Solutions (Taicang) Co., Ltd. ' 0512 5320-8882 [email protected] www.spstc.com.cn Dr. Lei Kan General Manager ZF Lenksysteme (Nanjing) Co., Ltd. ' 025 8575-8676 [email protected]

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Mr. Duc-Anh Nguyen Key Account Manage / Business Development Kerry EAS Logistics Co., Ltd - Shanghai Branch ' 021 5117-8111 [email protected] www.kerrylogistics.com Mr. Christian Karl Nothhaft Guangzhou ' 020 2833-6100 [email protected] Mr. Simeon Olle General Manager Shanghai New Union Building Co., Ltd. Hotel Management Branch Shanghai ' 021 6322-9988 [email protected] www.waldorfastoriashanghai.com Mr. Erling Pedersen Ningbo ' 0574 8630-8900 [email protected]

Ms. Tatyana Wessa Shanghai ' 138 1686 9473 [email protected] Mr. Kim Westerlund CEO Vaasa [email protected] Mr. Qingshan Wu CFO Jiangsu Jinfangyuan CNC Machine Co., Ltd. Yangzhou ' 0514 8787-3787 [email protected] www.jinfangyuan.com Mr. Yongfeng Zhao General Manager GWA Industrial Heat Exchanger (Jiangsu) Co., Ltd. Jintan ' 0519 6808-0255 [email protected]

www.china.ahk.de

4th March 2014

4th March 2014

4th March 2014

5th March 2014

Event: German Chamber of Commerce & DUSA Social Gathering in Suzhou Venue: Harry's Bar Suzhou

Event: Workshop Legal & Tax Topic: “Transfer Pricing Challenges in China - How to Manage Transfer Pricing Risks for Your Business in China” Venue: Jumeirah Himalayas Hotels Shanghai Moderator: Mr. Roger Haynaly | Associate Partner Roedl & Partner Management Consulting Speakers: Dr. James Zhao | Transfer Pricing Partner, Deloitte Shanghai; Mr. Simble Li | Transfer Pricing Senior Manager, Deloitte Shanghai

5th March 2014

Event: Joint Workshop Marketing & Sales / Automotive Industry Topic: “Secrets of Highly Successful Products – das Beispiel SVW Santana” Venue: Le Royal Meridien Shanghai Moderator: Ms. Brigitte Wolff | Board Member, German Chamber of Commerce; Director, Strategy&PwC Dr. Heiko Rauscher | Chief Executive Officer, Porsche Consulting China Speaker: Dr. Frank Tiemann | Leiter der Abteilung Marketing Communication; SVW VW Brand; Bernd Pichler | National Sales Director VW Brand, SAIC-VW Sales Company

Event: Deutscher PraktikantenstammtischTaicang Venue: Riverside

Event: Special Event HR Topic: “Recruitment in an Intercultural Context: Bridging the Expectations of Chinese and International HR Managers” Venue: Andaz Xintiandi Moderator: Mr. Andreas Dittrich | Project Manager, German Chamber of Commerce Speakers: Mr. Hsiao J. Chiu | Partner, Shanghai DEININGER Management Consulting / Managing Partner DE.NING Management Consulting; Ms. Carol Ji | Project Manager, DE.NING Management Consulting

This Joint Workshop of the Marketing & Sales Working Group and the Automotive Industry Working Group focused on the secrets of successful sales products. The workshop started with a short video showing the development of the Santana of SVW Volkswagen within the last 30 years. Afterwards, Dr. Frank Tiemann, Marketing Communication Director of SVW VW Brand, and Mr. Bernd Pichler, Sales Director of SVW VW Brand, presented the success story of the SVW Santana driven by modern marketing & sales strategies. The marketing strategies were illustrated by a few commercial, which made the whole workshop lively and the message easy to grasp. As the Santana has been a constant companion on the streets of China for 30 years, trust and reliability were the most important criteria when launching the New Santana. After the presentation of the strategies Dr. Tiemann and Mr. Pichler summed up what in their opinion secrets of highly successful sales products are. It is not only important to have a large potential market and get the launch right but also to provide a fair price and find the right push-pull mix along the sales tunnel. In the following Q&A session the participants discussed the opportunities of online sales channels, new automotive technologies and the future prospects of several car models on the Chinese market.

June - July 2014

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REGIONAL NEWS | Shanghai | Chamber Affairs

6th March 2014

Event: Special Event Topic: German Company Briefing of the Municipal Government of Changzhou 2014 Venue: Sheraton Changzhou Xinbei Hotel Moderator: Mr. Hans Becker | General Manager, Bosch Rexroth Changzhou Speakers: Mr. Fang Guoqiang | Vice Mayor of the city of Changzhou; Mr. Jan Noether | Chief Delegate of AHK Shanghai

11th March 2014

11th March 2014

12th March 2014

13th March 2014

6th March 2014

11th March 2014

Event: Workshop Business & Society Topic: “Social Inclusion: What can be Done at the Workplace and Beyond?” Venue: Office of the German Chamber of Commerce Moderator: Ms. Katja Hellkoetter | CONSTELLATIONS International Speakers: Ms. Anja Weckwert | Social and Labour Affairs, Senior Advisor, Deutsche Gesellschaft für Internationale Zusammenarbeit ; Mr. Thilo Koeppe | Vice President PMC Asia, AMETEK Inc. & Managing Director, Dunkermotoren Taicang

Event: Special Event: Swiss Chamber / German Chamber Joint Seminar Topic: “Trends and Strategies in Logistics and Supply Chain Management” Venue: Pullmann Shanghai South Hotel Speaker: Mr. Sven Kothe | M+R Spedag Group

13th March 2014

18th March 2014

18th March 2014

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Event: Social Gathering German Chamber of Commerce & AmCham in Hangzhou Venue: Angelo’s Binjiang Hangzhou

Event: Deutscher Stammtisch - Shanghai Venue: Paulaner Bräuhaus

Event: Ladies Networking Night Venue: Mexo at the Bund

Event: Women in Business Workshop Topic: "Strategic planning - develop your best career plan" Venue: Waldorf Astoria Speaker: Ms. Bettina Al-Sadik-Lowinski | BAS-Coaching, BAS-Consulting

Event: 2nd Joint Changzhou Executive Roundtable Topic: “Analysis on the Interim Provisions on Labor Dispatch and Corresponding Strategies" Venue: Changzhou Xinbei Sheraton Moderator: Ms Melanie Stoeckert | Foreign Legal Consultant, German Attorney-at-Law - King & Wood Mallesons Law FirmSpeaker: Mr. Anderson Zhang | Partner, Dacheng Law Offices Shanghai; Ms. Liu Qian | King & Wood Mallesons Shanghai Event: Workshop Human Resources Topic: “Measuring Intercultural Potential across Borders” Venue: Le Royal Meridien Shanghai Moderator: Mr. Joerg Heil | General Manager, hartung:consult Speaker: Ms. Deborah Schnabel | Head of Test Factory, ICUnet.AG Event: Special Event Topic: Laser World of Photonics Venue: SNIEC - Shanghai New International Expo Center

www.china.ahk.de

18th March 2014

18th March 2014

18th March 2014

19th March 2014

19th March 2014

20th March 2014

Event: German Chamber/Swiss Chamber Joint Event Topic: "Setting up a Subsidiary in China: Challenges, Risks and Chances from German Headquarter and China Branch Perspective" Venue: Le Royal Meridien Shanghai Moderator: Mr. Andreas Dittrich | Project Manager, German Chamber of Commerce Speaker: Mr. Dieter Müller | General Manager, Kittelberger (Shanghai) Co. Ltd.; Mr. Jan Kittelberger | CEO, Kittelberger media solutions GmbH

Event: German Chamber Corner - Hangzhou Venue: Angelo`s Restaurant

Event: Deutscher PraktikantenstammtischTaicang Venue: Riverside

Event: Special Event Topic: Taicang European SME Business Networking Venue: TBC, Taicang, Jiangsu

24th March 2014

Event: Workshop Automotive Topic: “The Software Revolution in the Automotive Industry” Venue: Le Royal Meridien Shanghai Moderator: Dr. Heiko Rauscher | Chief Executive Officer, Porsche Consulting China Speaker: Mr. Alexis Trolin | Head, ConnectedDrive Lab China, BMW Group

The demands of car owners are constantly growing, and pose major challenges for automakers. Cars no longer only have to be powerful, fast, efficient and attractively designed, but should also provide modern infotainment systems, be “connected,” and in the long-run even be able to drive autonomously. Mr. Alexis Trolin, Head of BMW Group ConnectedDrive Lab China, presented the challenges in the area of software for the automotive market in China and gave insights into the current innovations of BMW and its strategic orientation in this field. After a short introduction of the ConnectedDrive Lab in Shanghai, Mr. Trolin presented the differences between the automotive market in China and Germany. The fact that Chinese consumers display high mobile phone usage and attach great importance to infotainment makes software increasingly important when producing cars. The presentation was followed by a lively discussion. During this discussion the question of safety was raised. Can automakers provide both entertainment and safety? Should they have more partnerships with IT companies in order to manage the complexity of data requirements? The discussion clearly showed that software is becoming more important, and that automakers are still looking for the right solutions and strategies to cope with the changes in the automotive industry caused by this development.

Event: Deutscher Praktikantenstammtisch Shanghai Venue: Cotton´s

Event: Workshop Production & Logistics Topic: "Energy Efficiency in Manufacturing Facilities: Concept – Construction – Operation" Venue: Le Royal Meridien Shanghai Moderator: Mr. David Müller | General Manager, STAUFEN.SHANGHAI, Consulting Academy Ltd. Speaker: Mr. Christian Bosselmann | Deputy Managing Director, energydesign Shanghai

25th March 2014

Event: Wirtschaftsjunioren I Young Leaders Event Topic: “Solo-preneurship in China: Breaking and Making the Rules” Venue: Café Sambal Moderator: Ms. Andrea Cristancho | Partner at Chassport Speaker: Ms. Mary Rezek | Founder & Principal Consultant Saatori

June - July 2014

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REGIONAL NEWS | Shanghai | Chamber Affairs

27th March 2014

Event: Annual General Meeting of the German Chamber Topic: “Election of the Board of Directors of the German Chamber of Commerce in China | Shanghai” Venue: Grand Hyatt Shanghai Moderator: Mr. Jan Noether | President & CEO, German Chamber of Commerce Shanghai

The chamber meeting in March was held on the occasions of both the board election, which is held every two years, and the annual general meeting of 2014 at the Grand Hyatt Shanghai in Pudong. After Mr. Noether welcomed the over 200 participants of the annual general meeting, he gave the floor to Mr. Köhler who held a laudation to Mr. Fasser. Being actively engaged in the activities and workshops of the German Chamber of Commerce in China | Shanghai from its very beginning – most notably the German Chamber Roundtable which he organized from 1994 until 2013 – Mr. Fasser was awarded with the first honorary membership of the German Chamber in Shanghai. In the following, chairman of the board Mr. Titus von dem Bongart presented recent developments of the German Chamber and highlighted the constantly growing member numbers, the successful carrying out of events, and the high satisfaction of the members with the work of the chamber. He expressed his sincere thanks to the board members, Mr. Noether, and all active members of the Chamber. To honor the workshop leaders of the last two years for their commitment and their vital contribution to the work of the Chamber, Mr. Noether and Mr. von dem Bongart handed over certificates, trophies, and presents. Afterwards Mr. Odrian, the treasurer of the board, presented the financial report of 2013. Following the formal approval of the work of the old board by all attendees, Mr. Noether thanked all board members for their fruitful cooperation and expressed his wish to continue close collaboration with the former board members in the future. The 18 candidates then had the opportunity to introduce themselves, and gave enthusiastic and charismatic speeches outlining their goals for the chamber. During the election process guests could enjoy a delicious buffet dinner while listening to live jazz music by the Feng Hao Jazz Trio. After the votes were counted Dr. Ulrike Glück, the election supervisor, announced the new board members. Elected were Mr. Titus von dem Bongart, Mr. Bernd Reitmeier, Ms. Bettina Schön-Behanzin, Ms. Brigitte Wolff, Mr. Rolf Köhler, Ms. Ming Ming Liu, Mr. Andreas Odrian, and Mr. Peter Legner. Hence, every woman who campaigned was elected, and all former board members who ran were reelected. All of the elected board members have more than 15 years of experience in China. The Chamber and its members can expect two successful and eventful years with a highly motivated board.

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www.china.ahk.de

1st April 2014

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st

April 2014

1st April 2014

3rd April 2014

3rd April 2014

8th April 2014

Event: GC Roundtable Topic: Die Regierung im Sattel – Reformen oder Business as usual? Was wir nach dem richtungweisenden Parteitag erwarten dürfen“ Venue: Sofitel Hyland Hotel Moderator: Mr. Kurt Fasser Speaker: Dr. Peter Hefele | Director, KonradAdenauer-Stiftung Shanghai; Johnny Erling | Correspondent in Beijing Event: German Chamber of Commerce & DUSA Social Gathering in Suzhou Venue: Harry's Bar Suzhou

10th April 2014

10th April 2014

Event: Deutscher Praktikantenstammtisch Taicang Venue: Riverside

Event: Workshop Controlling and Finance Topic: “Inventory Reduction through a coherent Order to Delivery Process” Venue: Le Royal Meridien Shanghai Moderator: Mr. Marco Eilers | Director German Desk, Deloitte Touche Tohmatsu Certified Public Accountants LLP; Mr. Alexander Prautzsch | Director, Tax Services - China Tax & Business Advisory Services, PricewaterhouseCoopers Consultants Limited Speakers: Dr. Andre Philipp | COO, Deutz Dalian Engines Co. Ltd.; Mr. Joerg Nuernberg | Executive Director, Droege Group China Ltd.

14th April 2014

9

April 2014

Event: Workshop Maschinen- und Anlagenbau Topic: "Recruitment Challenges im Maschinenbau – Qualifizierte Mitarbeiter nach deutschem Vorbild“ Moderator: Mr. Daniel Tweer | General Manager, Rosler Surface Tech (Beijing) Co. Ltd, Shanghai Branch Speaker: Mr. Wilhelm Dittrich | Head, Department Recruitment, Training & Vocational Training, AHK Shanghai Event: Special Event Hangzhou Topic: "Am Ostufer des Westsees und westlich des Taihu - Wo steht China heute? Ein Jahres Rück- und Ausblick" Venue: Wyndham Grand Plaza Royale Speaker: Dr. Wolfgang Roehr | Consul General of Germany inShanghai

Event: Inter-Chamber Spring Mixer 2014 Venue: Isola Bar & Grill

Event: Deutscher Stammtisch - Shanghai Venue: Paulaner Bräuhaus

15th April 2014

th

Event: Workshop Kunshan Topic: “Lean for high-mix, low volume industries - theory and practical approach” Venue: Tonino Lamborghini City Center Hotel Kunshan Speakers: Mr. Rainer Voelker | Senior Consultant, Staufen.Shanghai; Mr. Thomas-Peter Koller | Executive Vice President System Business Asia, Voith

Event: Changzhou Roundtable Dinner Topic: “Benchmarking the Local Operating Environment” Venue: Monkey King Italian Restaurant

15th April 2014

Event: Deutscher PraktikantenstammtischTaicang Venue: Riverside Event: German Chamber Corner - Hangzhou Venue: Angelo`s Restaurant

June - July 2014

83

Advertorial

REGIONAL NEWS | Shanghai | In Person

Christoph Ladurner Company: Würth Line Companies, Greater China Job Title: Chief Executive Officer Year of Foundation: 1994 Main Business: business scope covers the fastener, metal maintenance, automotive, construction sector Number of Employees: more than 1,100 Sales: RMB 500.4mn in 2013

Tell us a little about your company and activities in China. The Würth Group is the world’s market leader in its core business, the trade in assembly and fastening materials. It consists of more than 400 companies in over 80 countries and has around 63,000 employees worldwide. The business scope covers the fastener, metal maintenance, automotive, construction and other fields. To serve customer needs, the sales force of Würth Line China visits customers day by day providing expert advice and fast delivery, implementing the Würth direct selling model in China. We want to be the number one in the eyes of our customers as the best and most qualified sales team. We want to provide our customers all over the world with the identical quality and brand promise. This means that we support our customers actively and in a solutionoriented manner so that they can focus on their business. We are constantly working to optimize our products and services. How long has your company been active in China? Have there been any major shifts in strategy in that time, and why or why not? The first Würth Company in Mainland China was established in 1994 in Tianjin, named Würth (Tianjin) International Trading Co., Ltd. Nowadays we have five Würth Line companies in China. We love serving our customers and offer them product solutions tailored to their needs as well as optimal services. The major driver of our success has always been our direct sales system, and

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June - July 2014

to maintain efficiency we have over 840 permanently employed sales representatives in over 100 cities around China.

What is your competitive advantage? What kind of benefits can companies using your products and services in China get?

Are your products all imported from Europe to sell in the domestic market? Do you see this changing over the next five to 10 years?

Würth provides customers with a wide product range and excellent service support. We not only sell products or systems, but also provide one-stop service. For example: our KANBAN is an optimized stocking and restocking system based on demand and usage, which allows Würth to control the direct supply of assembly components to customers. The thoughtful ordering systems and constant maintenance guaranteed by Würth sales representatives provides a lot of benefits: minimum of excess and obsolete stock, maximum of reliability and transparency, proactive program management, clear reorder points, reduction of rack space, and optimization of protection against harsh manufacturing environments. In fact, this kind of service guarantees our customers greater efficiency and saves time and money.

Most of our products are imported from Europe because we want to consistently provide high quality products. Customers buy from us because they trust our high quality products and the service we provide. Our business depends basically on global sourcing, and in recent years we have also found qualified suppliers in the China market to provide quicker delivery time. It is hard to say what will change in the next five to 10 years. What is sure is that we will keep our high quality in our services and our products. It’s Würth Line China’s 20th Anniversary. How do you plan on celebrating? Well, we have already adapted our logo and our materials for the occasion and launched some special promotions and offers. We will also have several special events for our customers as for our employees, like a sports campaign to motivate our employees. Additionally, we will award our loyal customers who have worked and grown with us from 1994, and award some anniversary gifts to our followers. We will also publish an anniversary book with the last 20 years of company history in it. In the near future we will visit Maqu school, our social cooperation project, to deliver some more donations.

What are your short and long-term objectives, especially in China? Our goal in the last year was to create one logistic infrastructure using one unified system, and we made it happen. We started with the introduction of our own ERP system to better serve our customers in the future, ensure the product supply, simplify purchase procedure and reduce customers overall cost with one unified professional system. We continuously will try to find new solutions to support our customers’ business every day.

Exhibition Calendar of Main City in China, June-July 2014 Date

Name

Venue

Link

Shanghai 4th-7th June

Die & Mould China

SNIEC

www.diemouldchina.com/en/

th

th

"DMC - International Exhibition on Die & Mould Technology & Equipment"

SNIEC

www.dmcexpo.com

th

th

LuxeHome-China (Shanghai) International Luxury Living and Interior Furnishing Exhibition

SNIEC

www.chinaluxehome.com

th

th

5 -7 June

Auto Components Shanghai - Shanghai International Automotive Parts & Accessories, Workshop & Service Station Equipment Exhibition

SNIEC

www.autopartschina.org

6th- 8th June

Green Processing

SNIEC

www.reedexpo.com/en/Events/2522/GREENPROCESSING

11th-13th June

MAE Mobile Asia Expo

SNIEC

www.auma.de/_pages/MesseDetailListe. aspx?id=131132&sprache=e

16th-20th June

ITMA Asia + CITME - China International Textile Machinery Exhibition

SNIEC

www.cematex.com

17 -19 June

"PCIM Asia - International Exhibition and Conference for Power Electronics, Intelligent Motion and Power Quality "

SWEECC

www.pcim-asia.com/

17th-19th June

4 -7 June 5 -7 June

th

th

transport logistic China - International Exhibition for Logistics, Telematics and Transport

SNIEC

www.transportlogistic-china.com

th

th

Rail + Metro China - China International Urban and Regional Rail Exhibition & Conference

SNIEC

www.metro-china.org

th

th

Aquatech China - International Exhibition & Conference on Water Technology

SWEECC

www.china.aquatechtrade.com/cn/en/Pages/default.aspx

th

th

2013 FlowEx China

SWEECC

www.flowex.com.cn/

th

th

Fi Asia-China/Hi China/Ni China - Food Ingredients Asia-China

SNIEC

fiasiachina.ingredientsnetwork.com/home

th

th

26 -28 June

Cphi & ICSE China & P-MEC & LAB World China - International Exhibition on Pharmaceutical Ingredients

SNIEC

www.cphi-china.com/

3rd-5th July

Offshore Wind (German Pavilion)

SM

www.offshorewindchina.com

3rd-6th July

Appp Expo-Shanghai Int'l Ad & Sign Technology & equipment Exhibition

SNIEC

www.apppexpo.com/index/2/cn

9th-11th July

17 -19 June 25 -27 June 25 -27 June 26 -28 June

Aluminium China

SNIEC

www.aluminium-messe.com/aluminium_china_129.html

th

th

EASTPO (SIMTOF) - Shanghai International Machine Tool Fair

SNIEC

en.eastpo.net/

th

th

ProPak China - International Packaging, Food Processing and Supplies

SNIEC

www.propakchina.com/cn/index.asp

th

th

China BevTek - International Beverage & Liquid Technology and Materials Exhibition

SNIEC

www.chinabevtek.com/en/index.asp

nd

th

China Diecasting

SNIEC

www.diecastexpo.cn

nd

th

Control CHINA

SNIEC

www.control-china.de

th

th

22 -24 July

The 13th Shanghai International Children Baby Maternity Industry Expo

SNIEC

www.cbmexpo.com

31st July-2nd August

China Joy - China Digital Entertainment Expo & Conference

SNIEC

www.chinajoy.net

14 -17 July 16 -18 July 16 -18 July 22 -24 July 22 -24 July

Exhibition

Beijing 8th-11th Jun.

EnerChina - China (Beijing) International Energy Saving and Environmental Protection Exhibition

BEC

www.enercn.com

th

9 -12 Jun.

"Sino Dental - International Exhibition on Dental Equipment, Technology and Materials "

CNCC

www.sinodent.com.cn

10th-13th Jun.

"Beijing Essen Welding & Cutting - International Trade Fair Joining, Cutting, Surfacing "

NCIEC

www.beijing-essen-welding.com/en/index.htm

12th-14th Jun.

th

CICEME - China Beijing Int. Coal Equipment & Mining Technology Equipment Exhibition

CIEC

www.ciceme.com

th

st

CIMES - China International Machinery & Equipment Show

NCIEC

www.cimes.net.cn/en/index.html

th

th

18 -20 Jun.

Asian Attractions Expo (AAE)

CNCC

www.iaapa.org/news/newsroom/news-articles/asianattractions-expo-moves-to-beijing-for-2014

25th-28th Jul.

17 -21 Jun.

B I Jewel - Beijing International Jewellery Fair

CNCC

www.newayfairs.com/EN/EventCalender.asp

th

th

All in CARAVANING

CNCC

www.all-in-caravaning.com

th

th

27 -29 Jun.

BITE - Beijing International Tourism Expo

CNCC

www.bitechina.com.cn/

09-12 Jun.

Guangzhou International Lighting Exhibition

CIEFC

www.messefrankfurt.com.hk/fair_homepage.aspx?fair_ id=15&exhibition_id=16

27 -29 Jun.

9th-12th Jun.

Guangzhou Electrical Building Technology

CIEFC

www.messefrankfurt.com.hk/fair_homepage.aspx?fair_ id=16&exhibition_id=17

26-28 Jun.

HOSFAIR Guangzhou International Hospitality Equipment & Supplies Fair

CIEFC

www.hosfair.com

8-11 Jul.

CBD - China International Building Decoration Fair

CIEFC

www.cbd-china.com/

8th-11th Jun.

CICGF - China International Consumer Goods Fair

NICEC

www.cicgf.com

Jul. 2014

EASTPO-China International Machine Tool Exhibition

WZICEC

www.donnor.com

Zhejiang

Jiangsu 26th-28th May

CIFE - China International Funeral Expo - Internationale Bestattungsmesse

NIEC

www.chinabz.org

st

rd

Hospital Build China

NIEC

www.hospitalbuild.com

rd

th

Asia Outdoor

NIEC

www.asian-outdoor.com

21 -23 June 23 -26 Jul.

Shenzhen 18-20 Jun.

Industrial Automation Shenzhen

SZCEC

www.industrial-automation-shenzhen.com

th

th

CIBF China International Battery Fair

SZCEC

www.cibf2014.com/siteengine.php?do=en/index

th

th

WATER - International Water Supply, Purification, Pumps, Valves & Pipe Exhibition

SZCEC

www.waterexpo.org

th

th

Intertextile Pavilion Shenzhen - Shenzhen International Trade Fair for Apparel Fabrics and Accessories

SZCEC

www.intertextile.com

25-27 Jun.

NEPCON West China

NIC & EC, Chengdu Century City

west.nepconchina.com/

20th-22nd June

Gifts & Houseware Chengdu

NIC & EC, Chengdu Century City

www.reedhuabo.com/cdjuneng

3-5 June

Build 4 Asia (formerly ASIAN ELENEX)

HKCEC

www.chinaallworld.com www.asianelenex.com www.allworldexhibitions.com

3-5 June

Asian Securitex

HKCEC

www.hkesallworld.com www.allworldexhibitions.com

12th-15th June

ITE - International Travel Expo Hongkong

HKCEC

www.itehk.com

16 -22 July

HKTDC Hong Kong Book Fair

HKCEC

hkbookfair.com

19-22 June

June Asia's Fashion Jewellery & Accessories Fair

HKCEC

www.asiafja.com

19-22 June

JGF - June Hong Kong Jewellery and Gem Fair

HKCEC

www.jewellerynetasia.com

Hong Kong International Education Expo

HKCEC

www.newayfairs.com

HKTDC Hong Kong Fashion Week for Spring/Summer

HKCEC

hkfashionweekss.com

Computex Taipei

WTC, TICC & TWTC Nangang

www.computextaipei.com.tw

18 -20 Jun. 26 -28 Jun. 10 -12 Jul.

Chengdu

HongKong

th

th

th

th

6 -7 July th

th

7 -10 July Taibei 3 - 7 June

Shangdong 11th-17th July

SINOCES - China International Consumer Electronics Show

QICC

www.sinoces.com

th

th

Stone QD - China Qingdao International Stone Products and Machinery Exhibition

QICC

www.stonefairchina.com

th

st

Int. Building Energy-saving & Renewable Energy Utilization Fair and Int. Construction & Decoration Materials Exposition (InterBuild Qingdao)

QICC

www.qdcese.com

18 -21 July 19 -21 July

For more information on upcoming Trade Fairs and GIC Shanghai Trade Fair services, please refer to contact Ms. Dong Yini, Tel: +86-21 5081 2266 ext. 1619. These are Events supported by the AHK. Members of the AHK get a 5% discount for chamber services part when participating *the Trade Fair Calendar is subject to change. We are not responsible for possible date changes

REGIONAL NEWS | Shanghai | Chamber Affairs

15th April 2014

Event: Special Event Topic: “Practical Tax Issues related to CrossBorder Inter-Company Services / 跨国关联公 司服务贸易实际税务操作”

Venue: InterContinental Pudong Moderator: Ms. Vivian Yao | Certified Tax Advisor, Partner, Roedl&Partner Management Consulting Speaker: Mr. Charlie Sun | Senior Associate, Head of Tax Practice Area Group, CMS China

15th April 2014

16th April 2014

16th April 2014

16th April 2014

17

th

April 2014

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June - July 2014

Event: Wirtschaftsjunioren I Young Leaders Event Topic: “Essential Legal Knowledge for Business in China” Venue: Waldorf Astoria Shanghai Moderator: Ms. Verena Simon | German Chamber of Commerce Speaker: Dr. Falk Lichtenstein | Counsel at CMS

Event: Workshop Suzhou Topic: “Anti-Bribery in China" Venue: Kempinski Hotel Suzhou Speaker: Mr. Kevin Wang | Partner, CMS, China

Event: Special Event Topic: “Wieder zurück – China Reflektionen mit ehem. ARD-Shanghai Korrespondentin Kerstin Lohse" Venue: Cotton’s Moderator: Ms. Katja Hellkötter | CONSTELLATIONS International Guest Expert: Ms. Kerstin Lohse | MERICS – Mercator Institute for China Studies,Berlin Event: Deutscher Praktikantenstammtisch Shanghai Venue: Cotton´s Event: Special Event Topic: "China HR Tomorrow - The Summit: The Only HR Summit Focusing on German Companies in China!" Venue: Grand Hyatt Shanghai

17th April 2014

Event: Chamber Meeting | April 2014 Topic: "One store per day – how to manage retail growth at break neck speed in China" Venue: Grand Hyatt Shanghai Speaker: Mr. Christian Nothhaft | CEO, Watsons China Moderator: Mr. Rolf H. Koehler | Vice Chairman, German Chamber of Commerce

Having studied tourism at the Munich University of Applied Sciences and then worked in the catering sector in Germany, the speaker of this April’s Chamber Meeting, Mr. Christian Nothhaft, took an astonishing path to become the CEO of the health and beauty care chain store Watsons in China. After hearing the short introduction from the moderator of the evening, Mr. Rolf Koehler, the audience could already anticipate an exciting speech and surprising insights into China’s retail business. Before the keynote speech, Mr. Koehler also introduced the new board members, who had been elected the previous month. He then gave the floor to Ms. Christa Kröger Wang who presented her organization “Harmony Shanghai,” which provides community dance projects for children in Shanghai. The idea for this concept developed in 2012 when Ms. Kröger Wang and the artistic director Sir Royston Maldoom organized a public performance of “Firebird” with 130 Chinese and German students. Mr. Nothhaft started his speech with a short overview of his interesting CV. After working as a consultant for chain restaurants in Germany, a company which does chicken processing in China, a wine business and later an electrical appliances business in Hong Kong, he finally ended up as the CEO of Watsons China. After introducing the company a little further he provided insights into the Chinese market. According to Mr. Nothhaft, even though China’s growth is slowly decelerating, the retail market still offers great potential. One factor driving the growth is country-wide urbanization and the fast development of 3rd tier cities. Mr. Nothhaft next gave an overview of related business fields, such as coffee shops, fast food chains, jewelry and cosmetics, and the main players of these industries in China. It became apparent that for every field there are about two to four big players which are mostly from foreign countries, but this situation is changing. A common problem among Western brands in China which Mr. Nothhaft observed is that they want to position their product in the same way they do it in the West: this mistake and the increasing pressure of local competitors are threats which will make it more challenging to succeed in the Chinese market. Another piece of advice that Mr. Nothhaft gave is not to outsource processes that you could develop within your company and also to develop talents within your company rather than hiring from the outside. This ensures higher motivation of employees and lower turnover which are both pressing issues in China. In the following Q&A session Mr. Nothhaft answered questions concerning the differences between stores in the North and the South of China and between 1st and 3rd tier cities, how to deal with this discrepancy, and how to ensure the quality of products for such a large number of stores.

www.china.ahk.de

22nd April 2014

24th April 2014

25th April 2014

Event: Women in Business Workshop Topic: “Releasing the Transformation Power of Women in Leadership” Venue: Waldorf Astoria Shanghai Speaker: Ms. Julia Atkinson | Senior Executive Coach at Atkinson-Training

Event: Special Event Construction & Operation Topic: "Construction Procedures in China – Planning, Approval Process & Implementation" Venue: Jumeirah Himalayas Hotels Shanghai Moderator: Mr. Christian Bosselmann | Deputy Managing Director, energydesign Shanghai Speaker: Mr. Colin Liu | Partner, CMS China; Mr. Erik Wauer | General Manager, MPS

Event: Young Professionals Mixer Venue: Xuan Bar / Andaz Bar

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REGIONAL NEWS | Shanghai | Chamber Affairs

Minister of Economic Affairs and Energy Sigmar Gabriel in Kunshan On 23 rd April 2014 the German Chamber in China | Shanghai had the honor of welcoming Mr. Sigmar Gabriel, Minister of Economic Affairs and Energy, Vice Chancellor of Germany and Party Chairman of the SPD at a gala dinner in Kunshan. Leading personalities of the German politics and of the German industry accompanied Mr. Gabriel at this event, such as the CEO of Voith and Chairman of the Asia-Pacific Committee of the German Business (APA), Dr. Hubert Lienhard, Mr. Martin Herrenknecht and the President of the DIHK, Dr. Eric Schweitzer, to name just a few. The dinner, which was hosted by the German Chamber of Commerce Shanghai, offered its members the opportunity to get in touch with important influencers of political and business networks and to exchange opinions on the current development of the German and Chinese economies. These topics were also discussed in speeches given by Mr. Gabriel, Mr. Schweitzer and Mr. von dem Bongart, Chairman of the Board of the German Chamber Shanghai.

New Workshop Series Construction & Operation Launched A new workshop series “Construction & Operation” has been successfully founded, and the first workshop in this framework took place on 24th April 2014. The workshop leader is Mr. Christian Bosselmann, deputy managing director of energydesign Shanghai. Mr. Bosselmann has more than 10 years of research and working experience with sustainable building design. Energydesign carries out various projects in the field of sustainable buildings in China and has been involved in the design and execution of multiple German manufacturing plants. The new workshop series presents an opportunity to discuss current trends in the area of the construction and operation of facilities in China, and will lay special emphasis on setting up production sites and their smooth and energy efficient operation. It will be carried out with the support of and in coordination with econet china, as it will also engage with the topic of green building – an area in which econet has extensive expertise. The scope of this working group will not be limited to activities in Shanghai; workshops will also be organized in the neighboring provinces Jiangsu and Zhejiang. At least one event per year will showcase “best practices” and will take place at a production site.

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Former Prime Minister at the German Chamber On 4th April 2014 Mr. Roland Koch, former prime minister of Hessen and now chairman of the board of Bilfinger SE, visited the German Chamber of Commerce in China | Shanghai. The reason for Mr. Koch’s visit to China was the founding of a joint venture between Bilfinger SE, Siemens and BITCC to extend their facility services in China in order to establish a second pillar of business besides their consulting and engineering activities. On this occasion Mr. Koch attended an expert discussion at the German Chamber on the topic of the current economic development in China and Europe. Among the participants were representatives of German companies in China such as Mr. Martin Ecknig of Siemens, Dr. Alasdair Jelfs of Merck Chemicals China and Mr. Peter Legner of Schenck.

Chamber Chief Representative Visits Anhui Mr. Jan Noether, Chief Representative of the German Industry & Commerce Greater China | Shanghai paid a visit to Anhui Province on 19th and 20th March 2014. He was warmly welcomed by Mr. Zhang Wuyang, Deputy Secretary General of Anhui Provincial People's Government. During the meeting, Mr. Zhang gave an overview about the industrial and economic situation in Anhui Province, while Mr. Nöther highlighted the increasing importance of East China for German companies. After the meeting, Mr. Noether visited the Hefei New & High Technology Industrial Development Zone and the Anhui Light Industry Vocational School. He further visited the Continental-Reifenwerk Hefei, the key German company in Anhui Province. On the 20 th March, Mr. Noether visited Ma’anshan City and met Mr. Zhang Xiaolin, Party Secretary of Ma'anshan Municipal Committee of CPC. Mr. Li Qun, Chairman of CPPCC Ma’anshan and Mr. Wang Xiaoyan, Vice Mayor of Ma’anshan also attended the meeting. Afterwards, they visited local and German companies in Ma'anshan. June - July 2014

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REGIONAL NEWS | Shanghai | Chamber Affairs

New Project Manager for Jiangsu (Taicang)

New Benefit Partners Shanghai

Mr. Daniel Faeh is our new project manager for Jiangsu province. In line with the new strategy to be more present in the neighboring provinces, he will be located in Taicang to support the local companies on-the-spot. Mr. Faeh holds a PhD of Science in Geography from the University of Bern where he investigated learning and innovation processes of Swiss SMEs in the mechanical and electrical engineering industry in China. Prior to his research, he was working at the Swiss Chamber of Commerce in Shanghai in 2009, Jakob Mueller (Textile Machinery) in Suzhou from 2005 to 2006 and attended a language semester at Suzhou University. Having worked, studied and lived in China for over three years, his cross-cultural background as well as a solid understanding of the economic, social and political developments in China will well contribute to our team of the German Chamber of Commerce in Shanghai. He can be reached at [email protected].

For a detailed description about our Benefit Partner Programme, please visit our website: http://china.ahk.de/chamber/benefit-partner

Suzhou

Mandarin House (Suzhou) 美和汉语 (苏州) Room 610, Building A, Xin Tian Xiang Plaza, 388 Su Ya Road, Suzhou Industrial Park 苏州工业园区苏雅路388号新天翔广场A座写字楼610室 Phone: 400 633 5538 Email: [email protected] Web: www.mandarinhouse.com Benefit: Corporate: free level assessment, free two hour group course, 20% discount, free APP; Indvidual: free level assessment, free two hour trial, 15% discount, free APP.

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German Press Agency dpa Mittelweg 38, 20148 Hamburg, Germany Phone: 8613143896142 Email: [email protected] Web: www.dpa-international.com Benefit: Personal profile on "dpa Executive Select," a news stream directly from the original source and selected based on your personal information wishes. Annual subscription at 20% discount, six months trial contract at 10% discount.

OWNS Club Shanghai 沃恩思上海汇抗衰老会所 Twelve at Hengshan Luxury Collection Hotel B1, 12 Hengshan Rd. (near Wulumuqi Rd), Xuhui District 上海衡山路十二号豪华精选酒店徐汇区衡山路 12 号 Phone: 0 (21 )3338 3909 Email: [email protected] Benefit: 15 minute complementary “meet the doctor” consultation with Dr. Missy Chua ND and/or 10% off your initial Naturopathic consultation for German Chamber Members.

Turkish Airlines 土耳其航空公司 Room 211, Shanghai Centre, No. 1376 Nanjing Road 200040 上海市南京西路1376号上海商城211室200040 Phone: 0 (21) 3222-0021 Email: [email protected] Web: www.turkishairlines.com/ Benefit: 10% discount on all high class fare (including Business, Comfort and Economy Class); 9% discount on all medium class fare (including Business, Comfort and Economy Class); 7% discount off based on all low class fare (Economy Class only); 3% discount off based on all super low class fare (Economy Class only) from Shanghai/Beijing/Guangzhou to Turkey and European destinations served by Turkish Airlines flights. 5KG extra luggage allowance for all discounted tickets under this promotion scope. Promotion validation: Ticketing period: 1st Apr. 2014~31st March 2015; Travel period: 1st Apr. 2014~31st Dec. 2014 How to get this offer: email [email protected], quote the membership of German Chamber of Commerce and the name of card holder, and quote tour code CCC24399.

www.china.ahk.de

Regular Social Events - East China

Event Highlights

Shanghai

11th June 2014: Maschine Building & Plant Construction Workshop: “Successful Multi-Brand Strategy- The TRUMPF / Jinfangyuan Example”

Deutscher Stammtisch – every second Tuesday of the month at Paulaner Braeuhaus Fenyang Road, 7:00pm, Shanghai Praktikantenstammtisch – every third Wednesday of the month at Cotton's (Anting Road), 7.30pm, Shanghai Hangzhou Hangzhou’s German Chamber Corner – every third Tuesday of the month at Angelo’s Restaurant, 7:00pm, Hangzhou Note: please always find the latest event calendar on our website: www.china.ahk.de/events If you would like to be included in our mailing list to get latest news and updates, please contact: Mr. Andreas Dittrich, [email protected]

Training Calendar Shanghai Date 6th June 6th June 9th-10th June 9th-10th June 10th June 12th-13th June 12th-14th June 16th June 16th-17th June 17th-18th June 18th June 19th-20th June 20th June 24th June 24th-26th June 1st-2nd July 5th July 7th July 14th-15th July 15th-16th July 17th-18rd July 17th-19th July 21th-22th July 24th-25th July 28th-29th July

Training Business Etiquette* Your Corporate Online Academy* China Law (Sanbao + Product Liability) and Recall in the Automotive Industry & VDA 1 Documentation and Archiving* Working Smart with Microsoft PowerPoint 2007 / 2010 Manage yourself and your team* MS Office Advanced Skills for HR* Controlling in 3 Stages: Stage 1 “Controlling & Controller” Working Smart with Lotus Notes Maturity Level Assurance Training for Project Manager* Working Smart with Microsoft Excel 2007 / 2010 Robust Production Process Assurance – Training for users* The Risk of the Customs Affairs and Foreign Trade Compliance System Bilding Excel Data Management and Analysis* Effective Meeting management* VDA 6.3 Process Auditor Module A + BII Essential AutoCAD skills 2-D Drawing Basics* Problem Solving Techniques* Microsoft Access Basics* Microsoft Excel Advanced Skills for Finance* Essential Leadership : Module One How to deal with China Customs, Custom Formalities Planning and Strategy of its Auditing Controlling in 3 Stages: Stage 2 “Controlling Toolbox” Working Smart with Microsoft Project General Cultural Awareness* Coaching Skills for Managers* * New Course

The takeovers of European firms by Chinese enterprises have been among the most popular topics in the media recently. Putzmeister and Kion are just two of the better known examples. However in 2013, TRUMPF, a German family-owned company, acted against the trend by taking over the Chinese company Jiangsu Jingangyuan (JFY), which is a leading producer of machine tools in China. With this acquisition, TRUMPF is hoping to strengthen its position in the Chinese mid-market. In his presentations Mr. Peter Hoecklin, President of TRUMPF China, will explain the concept and requirements of a multibrand strategy, reveal some of the experiences he made during the acquisition of JFY and discuss the most important synergy effects he was hoping to achieve with JFY. The workshop will take place on 11 th June from 6:30 to 8:30 pm. It will be a German language event.

Shanghai Training Highlights Business Etiquette There are things parents cannot teach you! International Corporations create a culture of their own. To successfully maneuver in this environment is not only based on good grades and knowledge. To become a respected partner in the corporate world it needs the skill to adapt to this culture and to follow certain rules. The training is designed to make you familiar with such rules and to practice them in a safe environment. General Cultural Awareness Amid the trend of globalization, the business environment of enterprises is undergoing profound changes, and businesses are often met with challenges arising from cultural diversity. To make the situation more complex, culture is basically intangible or even imperceptible, so business people have often found it difficult to communicate with others from unfamiliar or different cultural backgrounds. To some extent, therefore, cultural diversity has become the toughest barrier for business expansion in the global market, as well as the most probable source of trouble for internal management. Under this circumstance, we have designed General Cultural Awareness which will give you insights into other cultures and present “Cultural Dimensions” that will help you measure various other cultures. Through this course, you will be able to understand people from other cultural backgrounds and orient your own behavior when dealing with them. In a word, this course will build up a communication bridge across different cultures.

Shanghai contact: Ms. Zhang Yihui ' 021 6875-8536 ext. 1658 021 6875-8573 ext. 5658 [email protected]

June - July 2014

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REGIONAL NEWS | South & Southwest China | Member Affairs

Thanks to Our Yearly Sponsors 2014/15 South & Southwest China Offices

Langham Place Guangzhou Receives Award In December 2013, the Langham Place received Golden Post House’s “Best Hotel Design 2013” award at the Jin Yi Awards, an annual event organized by Southern Metropolis Daily. Winners of this award are selected by senior industry sources and readers. The hotel was designed by global award-winning architects from Aedas, with Andrew Bromberg, director of Aedas, as the lead designer. The novel, avant-garde façade makes the hotel a distinct landmark in Guangzhou, located on Pazhou Island. Ever since its opening in late October 2013, the hotel has been receiving attention from industry experts and guests for its unique design.

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Hager Contributes to Smart City Development in China O n 1 2 th December 2013, Hager Electro, the G e r m a n specialist company in low voltage and smart building controls, participated in a seminar on “Improving Building Energy Efficiency” in Shanghai. The event saw experts from the Chinese government, real estate developers and representatives from design institutes come together to exchange knowledge and discuss the latest developments in building automation: intelligent lighting and airconditioning controls for office buildings. Hager Electro shared insights on energy saving solutions along with best practices in this field and showed the latest KNX Smart Building solution, which will help to monitor and control energy consumption levels. With its innovative and intelligent building technology solutions, Hager Electro will continue to contribute to smart city development as well as improved measures to reduce pollution and to save energy in China.

Commerzbank strengthens M&A in Asia Commerzbank Corporates & Markets has increased its M&A presence in the Asian market by adding a team to its Hong Kong offices. This is in response to the increasing activity from clients in China seeking to capitalize on opportunities in Germany and greater Europe. Mr. Martin Rock leads the team and is responsible for supporting Chinese clients who have an interest in Europe, particularly in acquiring technology and manufacturing assets as well as broader market access. The M&A team in Asia will focus on the industrial sector (covering equipment, machinery, automotive and chemicals), healthcare and food/consumer segments. Commerzbank sees interest from Chinese investors in opportunities within the German market, particularly for the “Mittelstand” mid-market sector, where Commerzbank has expertise and an extensive footprint.

www.china.ahk.de

Daimler-BYD Joint Venture Introduces DENZA

New Members South & Southwest China For full contact information and company profiles of our new and existing members, please visit www.german-company-directory.com

Mr. Ronnie Cheng General Manager Langham Place, Guangzhou ' 020-8916 3388 guangzhou.langhamplacehotels.com Mr. Eddie Chong Private Member [email protected]

On 20th April, Shenzhen BYD Daimler New Technology Co., Ltd. (BDNT) officially unveiled its DENZA all-electric vehicle at Auto China 2014 in Beijing. The world premiere of the serial production model is the culmination of cooperative efforts at the 50:50 R&D technology joint venture established by Daimler and BYD back in 2010 – the first Sino-German joint venture dedicated to an all-electric vehicle in China. Combining Daimler’s renowned tradition and engineering expertise as a worldwide leader in safety technology and quality excellence with BYD’s leading battery technology, DENZA is styled as an honest and modern urban vehicle concept that fits both private and fleet customers. BDNT’s first DENZA car will hit the market in September 2014, available in two distinctive, well equipped lines: the “Lifestyle” and ”Executive” versions. The Garden Hotel Guangzhou Receives Award On 17 th April, the Garden Hotel G u a n g z h o u was honored as the “Best Business Hotel in Guangzhou” at the seventh TTG China Travel Award Ceremony. The TTG China Travel Awards is an influential travel trade event that honors the best in the hospitality industry. Winners of this year’s awards were determined by votes cast by professional readers of TTG China, TTGBT MICE China, TTG Asia, TTG MICE, TTG India and TTG Asia Luxury magazines. The Garden Hotel Guangzhou is the first and only Platinum 5-star Hotel in Guangzhou and the flagship hotel of the Lingnan Group’s deluxe hotel collection – LN Garden Hotel. Being named the “Best Business Hotel in Guangzhou” is not only an acknowledgment of the Hotel’s exceptional service standards and brand reputation, but also an affirmation of its standing in the region’s hotel industry.

Mr. Jun Dong General Director Paulmann Deng Ju Co., Ltd. ' 020 82029856 [email protected] Mr. Mervin Ho Residence Manager Ascott Raffles City Chengdu [email protected] www.the-ascott.com Mr. Jiyue Huang General Manager Chongqing Xin ZHONGTIAN REMONDIS Environment Technology Co., Ltd. ' 023-6261 0160 [email protected] www.zt-remondis.com Mr. Gerd Kaarow General Manager Greater China Metz Connect Zhongshan Ltd. ' 0760-8636 5040 [email protected] www.metz-connect.com

Mr. Steven Lux Project Manager MPS Construction Engineering (Shanghai) Co., Ltd ' 021-3356 2760 [email protected] www.mps-engineering.com Mr. Gary Price Private Member ' 138 1621 3267 [email protected] www.xdl-china.com Mr. Simon Shen General Manager Advance Team Combine Limited ' 0769 2268 9275 [email protected] www.gpmcn.com Mr. Dickson Song General Manager Holiday Inn Guangzhou Science City ' 020 22009999 [email protected] www.ihg.com Mr. Martin Sust Project Manager Stiefel (Guangdong) Environmental Protection Engineering Co., Ltd ' 020-2388 9649 [email protected] www.stiefelchina.cn

Mr. Thomas Kloehr Private Member [email protected]

Ms. Wei Tao General Manager Prec-Cast(Zhongshan) Co., Ltd. ' 0760-2251-0689 [email protected]

Mr. Tobias Knapp Managing Director Onero Consulting Shenzhen Ltd. ' 075526902676 [email protected] www.bsdconsulting.com

Mr. Samuel Tsang General Manager Crowne Plaza Guangzhou City Centre ' 020-8363 8888 [email protected] www.crowneplaza.cn

Mr. Ruediger Kümmerle CEO Lenzkes Clamping Tools (Shenzhen) Co., Ltd ' 0755 2349 6341 [email protected] www.lenzkes.com.cn/

Mr. Martin Uhlemann Private Member [email protected]

Mr. Tom Landwehr Sales Manager Illies Trading (Shanghai) Co., Ltd. ' 020-8732 1003 [email protected] www.illies.de Mr. Felix Lang Business Development Executive Shanghai SIP Engineering Consulting Ltd. ' 021-6465 0978 [email protected] www.sipgroup.com Mr. Garson Lee General Manager Daw (Guangzhou) Ltd. ' 020 32633020 [email protected] Mr. Cai Lishan Branch Manager Hörmann Beijing Trading Co., Ltd. Shenzhen Branch ' 0755-2515 4046 [email protected] www.hoermann.cn

Mr. Gregor Voege General Manager The Inspection Company Ltd. ' 0755 8278 2520 [email protected] www.the-inspection-company.com Ms. Ursula von Jeinsen Private Member u.vonjeinsen@gmailcom Mr. Gerhard Weinhardt General Manager Rutronik Electronics (Shenzhen) Co. Ltd ' 0755-2215 7309 [email protected] www.rutronik.com Mr. Hu Yu General Manager Chongqing Chemetall Chemicals Co., Ltd. ' 023 6758 7867 [email protected] www.chemetall.com

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6th March 2014 Shenzhen

Event: Stammtisch Shenzhen Venue: Bierhaus Shekou

12th March 2014 Guangzhou

13th March 2014 Guangzhou

11th March 2014 Shenzhen

June - July 2014

Event: Inter-Chamber Networking Drinks Venue: Crowne Plaza City Centre

Event: Manufacturing Working Group Topic: Manufacturing Floor Management at Testo Instruments Shenzhen Venue: Testo Instruments (Shenzhen) Co., Ltd.

On 11 th arch, the erman Chamber of Commerce • outh & Southwest China conducted the first open session of the manufacturing working group at Testo Instruments Shenzhen Co. Ltd. The aim of this pilot project is to provide manufacturing experts with a platform to share knowledge and to continuously improve their manufacturing and automation processes. The participating companies included Testo Instruments Shenzhen Co., Ltd., IPTA (Moulds), IKA Works Guangzhou, Rehm Thermal Systems and Guangdong Zama Precision Industry Co., Ltd. During the one-day workshop, participants were split into several groups that each focused on a different business unit with the aim to identify possible bottlenecks and other areas where the manufacturing process could be further improved. The workshop concluded with the presentation of the audit results and suggestions of improvement methods by the experts. A followup session has already been scheduled to reveal improvements of the previously identified issues. Following the initial session in March, the manufacturing working group will now be held every two months on a regular basis at different companies. Further companies that are interested in joining the project are invited to contact the erman Chamber of Commerce in China • outh and Southwest.

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Event: Stammtisch for Young Professionals and Students Venue: Rebel Rebel Urban Bar & Cafe

17th &18th March 2014 Hong Kong

Event: GCC University Cooperation Career Fair Venue: Hong Kong Polytechnic University

www.china.ahk.de

18th March 2014 Zhuhai

19th March 2014 Dongguan

20th March 2014 Chengdu

Event: Insurance Seminar Topic: Optimum Insurance Packages for German Expatriates Venue: EPCOS (Zhuhai Free Trade Zone) Co., Ltd. Speaker: Mr. Sven Janssen | General Manager, Hofmann Versicherungsvermittlungs GmbH

25th March 2014 Guangzhou

Event: General Manager Roundtable Topic: Red Tape and Unfair Treatment by Authorities & Copyright Infringement Venue: GCC Office Guangzhou Chair: Mr. Peter Helis | General Manager, German Industry & Commerce Greater China, Guangzhou

Event: Insurance Seminar Topic: Optimum Insurance Packages for German Expatriates Venue: One for the Road Bar, Dongguan Speaker: Mr. Sven Janssen | General Manager, Hofmann Versicherungsvermittlungs GmbH Event: Inter-Chamber Spring Mixer 2014 Venue: Dorsett Grand Chengdu

25th March 2014 Guangzhou On 17th arch, the erman Chamber of Commerce • outh and Southwest China attended the opening ceremony of the Hong Kong Polytechnic University’s Career Fair 2014, organized by the University’s Office of Careers and Placement Services (CAPS). The ceremony was the kick-off event for the GCC University Cooperation Project – Career Fair, which was held the following day The erman Chamber of Commerce • outh and outhwest China is the first Chamber to take part in the Polytechnic University Career Fair, and proudly invited its members to take part and to tap into the large pool of graduates and final year students. Participating member companies included Zama Corporation, CCS China Ltd., Framas Dongguan Plastics Ltd. and Guangzhou Oltrefrontiera Trading Ltd. who presented their companies and job postings to the students. Overall, the career fair hosted over 220 exhibitors, including more than 50 international employers, who used this unique opportunity to hold leadership, entrepreneurship and mini recruitment talks on site. Mr. Daniele Ugolini, vice general manager of Guangzhou Oltrefrontiera Trading Ltd., grasped this chance to introduce the turnkey and window display industry to a large number of interested students by means of an entrepreneurship talk held in one of the many lecture halls at the Polytechnic University. In total, the participating Chamber members were able to collect more than 200 contacts and CVs of potential employees and trainees, and look forward to further pursue the cooperation with students and graduates of the Polytechnic University in Hong Kong.

27th March 2014 Shenzhen

Event: German Happy Hour Venue: Paulaner Bräuhaus Guangzhou

Event: Guangxi – Connecting Shenzhen’s Young Professionals Venue: Xpats Bar & Lounge

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REGIONAL NEWS | South & Southwest China | Chamber Affairs

2nd April 2014 Guangzhou

Event: Annual General Meeting 2014 & Elections to the Board of Directors 2014 – 2016 Venue: The Langham Place Speakers: (in alphabetical order) Mr. Stefan Gallon | Consul General of the Federal Republic of Germany in Guangzhou Mr. Rainer Ganser | Owner, Backstube [the better bakery] Dr. Christian Geinitz | Economic Correspondent, Frankfurter Allgemeine Zeitung in China Mr. Frank Jaeger | CEO & Owner, TCA Ltd. Mr. Gerd Kaarow | General Manager Greater China, Metz Connect Zhongshan Ltd. Mr. Rüdiger W. Kümmerle | CEO, Rhea & Partner International Holdings Ltd. r Peter estmann Treasurer, CC • outh and Southwest China; CEO & Director, Allianz China General Insurance Company Ltd. r liver Regner xecutive irector, CC • South and Southwest China Mr. Ulf Reinhardt | General Manager, ARC Pacific Mr. Stefan Rosenbohm | Chairman, GCC • outh and outhwest China Technical Director, Shenzhen Giesecke & Devrient Currency Automation Systems Co., Ltd.

The 2014 Annual General Meeting and election of the Board of Directors attracted high interest and voter participation. After introducing the option to vote online for the first time in 2012, the turnout increased again this year to 92 online votes and overall reached 35% participation. Mr. Stefan Gallon, German Consul General in Guangzhou, opened the AGM, emphasizing the strong cooperation between the Consulate and the Chamber and outlining the essential preconditions for the further economic development in the Pearl River Delta. Mr. Stefan Rosenbohm, Chairman of the CC • outh outhwest China, summarized the Chamber’s achievements and developments as well as various projects and initiatives (see adjoining box) during the 2012-2014 term. He specifically highlighted the increased number of business events, the opening up of the project groups to further member companies and the Chamber’s support of the Hopeful Hearts foundation. Ms. Asha Hoffmann, founding member of the organization in Guangzhou, was presented with a check of RMB 30,000 on behalf of the Chamber. Completing the review, GCC’s treasurer Mr. Peter Nestmann provided an overview of the Chamber’s general financial setup referring to a solid financial base. The Board of Directors took this opportunity to bid farewell to two highly valued members of GCC’s staff who will pursue changes in their careers during the spring of 2014. Ms. Heidrun Buss is returning to Germany after seven successful years first as Regional Manager in Shanghai and then as Executive Chamber Manager in Guangzhou for the last four years. Mr. Max Zenglein significantly shaped GCC’s Shenzhen office over the last five years and successfully advanced numerous projects for the Chamber. He will now take over the post as Economic Analyst for the German Chamber of Commerce in China in the Beijing office. The Board expressed its sincere gratitude for the achievement of the two colleagues and wishes all the best for their promising future. This year’s election highlight was the introduction of the candidates who each outlined their goals and motivation to run for office. The Chamber would like to thank all candidates for their dedication and are pleased to announce the board of 2014-2016 as follows: Mr. Stefan Rosenbohm | Chairman Mr. Peter Nestmann | Treasurer Mr. Oliver Regner | Executive Director Mr. Frank Jäger | Board Member Mr. Gerd Kaarow | Board Member Mr. Rüdiger Kümmerle | Board Member

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Overall, the evening provided a platform for the 60 participants to network with other members and friends from all across the Pearl River Delta. Dr. Christian Geinitz, Economic Correspondent in China for the renowned German newspaper F.A.Z., introduced his newly published book on China’s hidden treasures and pointed out recent prospects for German companies. He particularly emphasized business opportunities in China's Western provinces, thereby building a figurative bridge to GCC's liaison office in Chengdu. The guitar-flute duo of Mr. Bastian Hildner and Mr. Qi Yan performed as background entertainment and long-term supporter finsta generously sponsored assorted digestif schnapps and liqueur to complement the sumptuous dinner. We thank all members for their continuous support of the Chamber and its activities and all those who made their vote count in the 2014 board election.

Introducing GCC Pilot Projects In , the CC • outh and outhwest China introduced a number of pilot projects to assist its members in dealing with the most pressing issues that German companies are faced with in China: training & recruiting qualified staff as well as efficiency and productivity concerns. In order to ensure access to educated staff already at an early stage, the Chamber initiated a cooperation project between its members and the Hong Kong Polytechnic University, one of the leading universities in the fields of engineering, IT and chemistry in our region. The cooperation thus far has seen a successful kick-off session in May 2013, followed by a preliminary visit of the university’s Industrial Centre to reveal further cooperation possibilities. In March 2014, GCC members joined the first career fair at the HK PolyU. Further steps to advance the project involve internship programs, bachelor and master theses, and cooperation with other universities and faculties.

Another initiative commenced in 2013 is the “Member-4-Member” training: a technical engineering training series in accordance with the German dual education system, set up by CCS Zhongshan, Testo Instruments and ZAMA henzhen, supported by the CC • outh Southwest China. The purpose of this project is to share information and skills in the area of mechatronics among member companies during basic short-term trainings. The training program shall be expanded in the coming months to include further companies and training schools. On top of that, the GCC initiated the formation of a manufacturing working group led by industry experts from the Chamber community. The goal of these groups is to bring together German-speaking manufacturing professionals in order to share experience and production know-how on a specific topic to improve efficiency and the automation process. Prospects for 2014 include further public rounds in a greater variety of industries, as well as awards for the “Company of the Year.”

June - July 2014

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REGIONAL NEWS | South & Southwest China | Chamber Affairs

3rd April 2014 Shenzhen

8th April 2014 Shenzhen

9th April 2014 Chengdu

10th April 2014 Guangzhou

15

th

April 2014 Guangzhou & Zhuhai

100 June - July 2014

Event: Stammtisch Shenzhen Venue: Bierhaus Shekou

16th April 2014 Shenzhen

Event: General Manager Roundtable Topic: Introducing the Member-4-Member Training: Mechatronic Fitters Venue: GCC Office Shenzhen Chair: Mr. Max Zenglein | Economic Analyst reater China and Regional anager, CC • South & Southwest China

Event: General Manager Roundtable Topic: Developments and Impact of Chinese Trade Unions Venue: Bosch (Shanghai) Security Systems Ltd. Chair: Ms. Astrid Schröter | Liaison Manager ichuan Chong ing, CC • outh Southwest China

Event: Stammtisch for Young Professionals and Students Venue: Hooley’s Irish Pub

Event: Finance Seminar Topic: Tax Treaties and Their Implications on Holding Structures Venue: GCC Office Guangzhou & EPCOS (Zhuhai FTZ) Co., Ltd. Speaker: Mr. Dave Wong | Tax Partner, Tax Advisory Services, Mazars Hong Kong

24th April 2014 Shenzhen

29th April 2014 Guangzhou

Event: PRD European SME Forum 2014 Topic: Practical Solutions to Help You Think Big Venue: Crowne Plaza Hotel & Suites Landmark, Shenzhen Speakers: Ms. Christine Raynaud | CEO, MRIC Ms. Cindy Jensen | EU SME Centre Speaker Mr. Tristan Roquette | Founder and Managing Director, Teamacting Group Ms. Noelia Maestre | Marketing & Communications Director, Teamacting Group Mr. David Allison | China IPR SME Helpdesk Expert Chair: Mr. Hubert DelelisF anien | Chair of the SME Forum, European Chamber

Event: Spring Inter-Chamber Networking Mixer Venue: The Venice Hotel, Shenzhen

Event: German Happy Hour Venue: G Bar, Grand Hyatt Guangzhou

REGISTER TODAY

Understanding Trends and Perspectives Program Highlights

14th Asia-Pacific Conference

Sigmar Gabriel German Federal Minister of Economic Affairs and Energy

Dr. Hubert Lienhard Chairman APA and President & CEO, Voith GmbH

Vietnam will be the host country of the 14th Asia-Pacific Conference of German Business (APK). Held every two years since 1986, the conference has established itself as the key forum for decision-makers in business and politics in the Asia-Pacific region and Germany. This year’s conference theme is “Understanding Trends and Perspectives”. The economies in the Asia-Pacific region combined are playing an ever more important role in global trade, as is their share in world population and GDP. Over the decades, the APK has established itself as a catalyst and indispensable platform for partnership-based dialogue between Germany and Asia. The 14th edition of the APK will focus on industries and trends of the future, where cooperation between businesses in Germany and Asia-Pacific can thrive. During the two-day conference, some 750 participants will have ample opportunity to speak, listen, network and contemplate concepts and solutions for a sustainable future. The conference will be co-chaired by APA Chairman Hubert Lienhard, President & CEO of Voith, and the Honourable Sigmar Gabriel, German Federal Minister for Economic Affairs and Energy. Co-organiser and local host of the APK is the Delegation of German Industry and Commerce in Vietnam (AHK).

Online registration available at:

Program Highlights Thursday, 20th November Welcome Reception   Friday, 21st November – Conference Day 1 Breakfast Workshop Plenary Session r
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Economic Outlook Asia 3 Parallel Sessions t Panel Discussion: How to finance a growing company in Asia? t Expectations of the Emerging Middle Classes in Asia t Debate: Free Trade Agreements and Asia-Pacific: “Winners and Losers?” 3 Parallel Sessions t “Industry 4.0” t How to develop and retain talent t Innovation and IPR Evening Reception Saturday, 22nd November – Conference Day 2 Breakfast Workshop 2 Parallel Sessions t Competing R&D Locations t Raw Materials and Resources 2 Parallel Sessions t
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 Closing Reception

REGIONAL NEWS | South & Southwest China | Chamber Affairs

Events South & Southwest China Regular Social Events German Happy Hour Guangzhou – every last Tuesday of the month at Paulaner Bräuhaus Guangzhou or alternating venue Stammtisch Shenzhen – every 1st Thursday of the month in Bierhaus Shekou Young Professionals Stammtisch Guangzhou – every 2nd Thursday of the month Guanxi-Connecting Shenzhen’s Young Professionals – every last Thursday of the month

Training Calendar June-July 2014 Date 11th June 20th June 26th-27th June 7th-8th July 18th July

Training Government Relations Workshop: Developing an Effective China Strategy Creative Problem Solving & Decision Making Leadership Transition from Engineering to Management Executive Secretary & Administration Assistant Training Improving Workplace Safety through Applied Psychology Hology

Chamber Event Calendar 10th June 12th June 12th June 12th June 14th June 17th June 19th June 24th June 1st July 29th July

Joint GM Roundtable & Factory Tour Dongguan Logistics Seminar Shenzhen German Asparagus Dinner Guangzhou German Asparagus Dinner Chongqing German Standup Comedy Shenzhen Legal Seminar Shenzhen Inter-Chamber Networking Drinks Logistics Seminar Guangzhou General Manager Roundtable Shenzhen General Manager Roundtable Guangzhou

South China Training Highlights 11 th June 2014 (GZ): Government Relations Workshop: Developing an Effective China Strategy Understanding the workings of the PRC government, its structure, the sometimes competing agendas of its constituent parts and the opinions of its officials is critical for business success in China. The purpose of this workshop is to explore successful strategies and to provide practical advice on how to effectively manage government relationships. Personal experiences as well as case studies will be shared with the participants. After this workshop, participants will be able to understand how to map out a government relations strategy for their business in China, how to build effective relationships with key stakeholders and how to avoid legal pitfalls in dealing with the government. 20th June 2014 (GZ): Sales Team Coaching Workshop

Design Services Corporate Image Design Brand Design | Advertisement | Packaging | Leaflet | Image Brochure

Graphic Design & Printing Flyer | Invitation Card | Newsletter | Magazine | Catalogue

Exhibition & Event Poster / banner | Roll-up | Showcase | Display Stand | Freebies

Faced with complex, open-ended, ever-changing challenges, organizations realize that constant innovation is critical to stay ahead of the competition. As a leader, how effectively do you manage these business difficulties? Can you break thought patterns and think differently? This workshop will teach you how to utilize tools to spark creativity, and enable you to develop comprehensive approaches to solve problems with fresh ideas and make high-quality decisions. 18th July 2014 (GZ): Improving Workplace Safety through Applied Psychology Hology This workshop is for EHS professionals and managers who are responsible for a safe work environment and want to improve safety at work. It looks at how the human mind affects safety and how the principles of psychology can be used to evaluate safety practices and to make the workplace even safer.

CONTACT US German Industry & Commerce Greater China

www.china.ahk.de/media DEinternational™ is a registered brand of the German Chamber Network, services are provided by GIC.

102 June - July 2014

For further information please contact: Ms. Leonie Lin ' 020 8755-8208 | 020 8755-1889 |

[email protected]

www.china.ahk.de

New Benefit Partners South & Southwest China For a detailed description about our Benefit Partner Programme please visit our website: http://china.ahk.de/chamber/benefit-partner/

The Brew Sports Bar & Grill 大

Shenzhen Tiansu Calibration and Testing Technology Co., Ltd

餐

市天

Brew Panyu Huanan Country Garden, Main Entrance Panyu, Guangzhou 店 市 区 2 11号

No. 2 Jinlong Avenue Baolong Hi-tech Industry Zone Longgang District, Shenzhen, China (518116) 东

市

区

区

大

路华南

Guangzhou Branch

Brew Zhujiang New Town (Taps) Baolin Garden, Hua Jiu Rd. & HuaXun St., Zhujiang New Town

Room 411 Shiqiao Technology Mansions Panyu District, Guangzhou, China (511400)

Tel: 020 - 3804 9549

华 路和华

东

(511400)

市

区市

科

大厦411室

Dongguan Branch

Brew Jian She Liu Unit 11-13, Yuhai Food Street, #1 Jian She Liu Rd & Dong Feng Rd Yuexiu District, Guangzhou 市 11-13号

路店 区建 （东 路

Tel: 020 - 8382 8299

东 东 523710

市

厦

厦大

55号

区

路228

大厦1号楼

Room 1716 Aidu International Mansion No. 49 XingshaKaiyuan East Road, Changsha, Hunan Province, China (410199) 南 市 东路49号 1716室(410199)

国际

Jiangxi Branch Room 1941 Building Bojin Area Dongfangmingzhu City No. 360 Jiefang West Road Qingyunpu District, Nanchang, Jiangxi Province, China (330000) 南

市 金区B

区 路360号东 1941室 330000

Suzhou Branch 510630

Tel: 020 3801 7000 E-mail: [email protected] Web: www.mccawleys.com Benefits: 10% discount on any product that is not on special.

N0. 68 Heilongjiang North Road, Kunshan, Jiangsu Province, China (215300) 市

No. 81 Le’an North Road Jimei District Xiamen, Fujian Province, China (361300) 建

厦

市

美区

北里81号 361300

Chongqing Branch Building 5 Xinke International Square No. 68 Jinyu Anenue North New District, Chongqing (401122) 市北 区金 5 (401122)

大

68号

科国际

Qingdao Branch

南

McCawley’s Irish Restaurant & Bar Shop No.101 16 HuaCheng Ave, Zhujiang New Town, TianHe District, Guangzhou, P.R.C 510630 16号101

No. 55 Tangxia Avenue Tangxia District, Dongguan, China (523710)

Hunan Branch

路1号 海 ）

E-mail: [email protected] Web: www.thebrew-china.com Benefits: 10% discount on all products (cannot be used in combination with other promotions)

大

海市 215300 建

东

建

海

Building 1 Baochengda Mansion 288 Alley Rongxing Road Songjiang District, Shanghai, China (215300)

Fujian Branch

Tel: 020 - 3482 0401

店 市天 区

Shanghai Branch

Room 403 No. 698 Zhengyang Road Chengyang District, Qingdao, Shandong Province, China (4266000) 东 市 阳区 阳路698号403 (4266000) Tel: 0755-84815081 Fax: 0755-28949551 E-mail: [email protected] Web: www.51jl.org Benefits: 1. 10% discount on total calibration fee for the instrument/apparatus 2. Accredited labs with 17 subsidiaries all of China and one special technical team to provide effective and professional service to the chamber members. 3. One appointed colleague especially responsible for the program to guarantee service quality

北路68号 215300

June - July 2014

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REGIONAL NEWS | South & Southwest China | Chamber Affairs

Changes in the Shenzhen Office Team

The German Chamber of Commerce in South and Southwest China is glad to announce that Mr. Max J. Zenglein will be taking over the post as Economic Analyst for the German Chamber of Commerce in China. Mr. Zenglein started working for the German Chamber in the South in November 2008 and shaped the regional office in Shenzhen. With his strong academic background and a forthcoming doctor’s degree he introduced the Chamber’s Annual Survey on Wage Trends and conducted the annual nationwide Business Confidence Survey. Mr. Zenglein will be based in Beijing and still support the members in the South on whose behalf we express our gratitude for his remarkable contributions in the past and wish him great success within our Chamber network in the future.

Changes in the Guangzhou Office Team

German Chamber again Supports Hopeful Hearts Foundation

For the German Chamber of Commerce in South and Southwest China it is time to say goodbye to one of our most valued colleagues, Ms. Heidrun Buss. After seven successful years with the Chamber, first in Shanghai and later in Guangzhou, Ms. Buss is now eager to return to Germany for some time. She supported the membership development and event organization as Regional Manager Shanghai from 20072009 and joined the South & Southwest China team as Executive Chamber Manager in 2010. Over the past four years, Ms. Buss considerably expanded the Chamber's network and professionalized its membership services and support. We thank Ms. Buss for her outstanding contribution to the Chamber’s development and wish her all the best for her future.

The Board of Directors concluded to continue the Chamber’s charity support of the Hopeful Hearts Foundation by donating RMB 30,000 in line with last year’s successful charity liaison. In 2013, the Chamber already enabled the surgery of two children in Chengdu and Guangzhou. Throughout the year, former board member Mr. Rainer Ganser together with GCC staff members and the Hopeful Hearts team screened incoming applications, visited the children, talked to the doctors and searched for further information on the parents’ backgrounds, living situation and financial means.

The German Chamber encourages its members and German companies to support Hopeful Hearts. For more information, please contact [email protected].

New Executive Chamber Manager at the German Chamber Guangzhou As of 1 st June, Ms. Fabienne Privat has been appointed as Executive Chamber Manager for the German Chamber of Commerce Guangzhou, succeeding Ms. Heidrun Buss. Ms. Privat has several years of experience in marketing, sales, business development and key account management for international companies. Before joining the Chamber she worked in Bureau Veritas’ Building & Facilities department as international business developer and German key account manager in Shanghai. She holds a bachelor’s degree in Eastern Asian studies and a master’s degree in international marketing management. With almost five years of academic and practical experience in China, she has developed a thorough understanding of the Chinese market. As GCC’s new Executive Chamber Manager in Guangzhou Ms. Privat will gladly take care of the members’ needs and can be reached via Tel: +86-20-8755 8203 or Email: [email protected].

104 June - July 2014

Since its foundation in Nanjing in 2003, Hopeful Hearts was already able to support more than 250 children. The organization is run by a small group of expatriates and caring locals and has now also teams in Chengdu and Guangzhou. The families applying for the foundation’s support are mostly migrant workers or farmers who cannot afford an operation and have no chance to receive government support or bank loans.

Meeting of the Board of Directors | Monday, 14th April | Guangzhou The board meeting in early April was the first get-together of the new board of directors after having been elected less than two weeks earlier at the Annual General Meeting in Guangzhou. This constitutive meeting saw a review of the AGM and the appointment of Mr. Stefan Rosenbohm as GCC Chairman and Mr. Peter Nestmann as Chamber Treasurer. Furthermore, upcoming tasks were outlined and discussed, e.g. concerning the articles of association for the German Chamber of Commerce in South and Southwest China, as well as this year’s Oktoberfest events. The Chamber congratulates the newly constituted board of directors to its assignment and wishes all board members a successful and dynamic term 2014-2016.

www.china.ahk.de

June - July 2014

105

GCC BoARDS

GCC Board North China

GCC Board Shanghai

GCC Board South & Southwest China

Mr. Lothar Herrmann* Chairman Siemens Limited China President and CEO

Mr. Titus Freiherr von dem Bongart* Chairman Ernst & Young (China) Advisory Ltd. Partner and Head of GBN Greater China, ASEAN & Korea

Mr. Stefan Rosenbohm* Chairman Shenzhen Giesecke & Devrient System Co. Ltd. Technical Director

Ms. Alexandra Voss* CC • orth China Executive Director Delegation of German Industry & Commerce Beijing Delegate and Chief Representative

Mr. Jan Noether* CC • hanghai President & CEO Delegation of German Industry & Commerce Shanghai Delegate and Chief Representative

Mr. oliver Regner* CC • outh outhwest China Executive Director Delegation of German Industry & Commerce Guangzhou Delegate and Chief Representative

Mr. Stephan Luerssen Vice Chairman Bitzer Refrigeration Technology (China) Co., Ltd. Managing Director

Mr. Rolf H. Köhler Vice Chairman CanadAsia Management – Development (Shanghai) Co., Ltd. Director

Mr. Peter Nestmann Treasurer Allianz China General Insurance Company Ltd. CEO & Director

Mr. Martin Broda Treasurer Commerzbank AG Beijing Branch General Manager

Mr. Andreas odrian Treasurer Deutsche Bank (China) Co., Ltd. Director and Head of Corporate Banking and Coverage, MNC

Mr. Frank Jäger The Cable Assembler Ltd. CEO & Owner

Mr. Karsten Engel BMW Group Region China President and CEO

Mr. Peter Legner Schenck Shanghai Machinery Corp., Ltd. President & CEO

Mr. Gerd Kaarow Metz Connect Zhongshan Ltd. General Manager Greater China

Mr. Xingliang Feng NRW.INVEST China/Beijing Executive Chief Representative

Ms. Mingming Liu Voith Corporate Management (Shanghai) Co., Ltd. Executive Representative Member of Voith Paper Board

Mr. Rüdiger W. Kümmerle Rhea & Partner International Holdings Ltd. CEO

Mr. Jörg Müller Volkswagen Group China Executive Vice President

Mr. Bernd Reitmeier Startup Factory (Kunshan) Co., Ltd. General Manager

Mr. Kay Popken Lufthansa German Airlines Managing Director Strategy and Development China

Ms. Bettina Schoen Freudenberg Management (Shanghai) Co., Ltd. General Manager

Ms. Susanne Rademacher Beiten Burkhardt Rechtsanwaltsgesellschaft mbH Partner and Chief Representative Beijing

Ms. Brigitte Wolff Strategy & PwC Director

* GCC All-China Board Member

106 June - July 2014

www.china.ahk.de

German Chamber Ticker About us PUBLISHER German Chamber of Commerce in China Offices and Teams in Mainland China: GERMAN CHAMBER TICKER TEAM Chief Editor (Shanghai) Ms. Olivia Helvadjian Editor (Shanghai) Ms. Caitlin Waggoner Design (Shanghai) Ms. Ye Li GCC NORTH CHINA 0811 Landmark Tower 2, 8 Dongsanhuan (N) Rd. Chaoyang, Beijing 100004 ' 010 6539-6688 010 6539-6689 [email protected] Executive Chamber Manager Mr. Sebastian Suciu ' 010 6539-6660 [email protected] Regional Manager Beijing Ms. Jana Kumpf ' 010 6539-6661 [email protected] Regional Manager Tianjin & North China Mr. Bjoern Lindemann ' 022 8787-9249 [email protected] Head of Communications Ms. Yulya Toporochan ' 010 6539-6670 [email protected]

GCC SHANGHAI 25F China Fortune Tower, 1568 Century Ave. Pudong, Shanghai 200122 ' 021 5081-2266 021 5081-2009 [email protected] Executive Chamber Manager Ms. Petra Kreuder Ext. 1605 [email protected] Project Manager Shanghai Mr. Andreas Dittrich Ext. 1871 [email protected] Project Manager Jiangsu Province Mr. Dr. Daniel Faeh [email protected] Communications Manager Ms. Olivia Helvadjian Ext. 1637 [email protected] Editor Ms. Caitlin Waggoner [email protected] Ext. 1675 Project Manager Ms. Verena Simon Ext. 1630 [email protected] Senior Project Manager Ms. Li Yandi Ext. 1609 [email protected] Project Manager Ms. Xiao Liewen Ext. 1650 [email protected]

GCC SOUTH AND SOUTHWEST CHINA Room 1903, Leatop Plaza, 32 Zhu Jiang East Road Tianhe District, Guangzhou 510620 ' 020 8755-2353 020 8755-1889 [email protected] Executive Chamber Manager Ms. Fabienne Privat ' 020 8755-8203 [email protected] Regional Manager Mr. Chihang Lee ' 0755 8635-0487 [email protected] Liaison Manager Sichuan-Chongqing Ms. Astrid Schröter ' 028 8533-6840 [email protected] Cover image: Scribing by Florent Courtaigne @ VISION DAY in Dec 2014 for CONSTELLATIONS International The German Chamber Ticker is free of charge. For subscriptions or extra copies please e-mail your nearest Chamber office. The current and previous issues of the magazine can be found on our website www.china.ahk.de and can be downloaded through our app. © 2014 German Chamber of Commerce in China. No part of this publication may be reproduced without the publisher’s prior permission. While every reasonable effort is made to ensure that the information provided is accurate, no guarantees for the currency or accuracy of information are made. All material relating to information, products and services (or to third party information, products and services), is provided ‘as is’, without any representation or endorsement made and without warranty of any kind, including the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security and accuracy. The author(s) of each article is/are solely responsible for the content thereof; In no event will the publisher be liable for any loss or damage whatsoever arising from infringement or any defect of rights of the content of the article. Views expressed are not necessarily those of GIC/GCC.

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