German Handelsblatt article on April 29, title: This family-owned company explains why it continues to rely heavily on China. Like many German companies, ebm-papst, a manufacturer of wind turbines and motors from Germany, continues to invest in China. Its head of China, Thomas Nuremberg, explains the strategy and reveals why it is impossible to exit the Chinese market.
Have you left or stayed? Any one of the approximately 5,000 German companies in China can ask themselves – the world is in a fragile state and business with China is too important for most German companies to give up. This answer also applies to the family-owned company ebm-papst in Baden-Württemberg. "The Chinese market remains as attractive to us as ever," said Nuremberg. The company has been active in China since 1996 (pictured) and has offices in Shanghai, Qingdao and Xi'an at. In the 2022/2023 fiscal year, the group's total sales were 2.54 billion euros, of which approximately 20% came from Germany and 15% from China. Although the Chinese market contributes less to sales than the European market, growth is very important.
Nuremberg, who now lives in Shanghai, praised the Chinese government's overall planning and economic policies. In Germany, people hope to get more orders from China. He and the company are very clear, "We will not withdraw from China and will continue to invest." Currently, ebm-papst has about 1,900 employees in its branch in China. Its new Greater China headquarters in Shanghai, not far from Pudong Airport, was completed in March. It covers an area of 33,000 square meters and houses a logistics center, a four-story production building, research laboratories, offices and a canteen that can accommodate 900 employees. . In the ancient capital of Xi'an, the company also plans to expand its production area.
The economic boom is transforming the country, creating demand and driving modernization. In Shanghai, open-air markets selling meat have been replaced by modern supermarkets and cold-chain delivery services, often with cooling systems using German technology.
Nuremberg’s enthusiasm for the Chinese market is evident. The 55-year-old German has lived in China for 18 years and is married to a Chinese woman. He has also worked in Xi'an and the southern tech metropolis of Shenzhen. Regarding geopolitics, Nuremberg said: "China's democratic development does not necessarily have to meet our expectations...Western values cannot be copied to China." He said that many Chinese people hope that their families will become better and their children will have better health. Many opportunities. These must be attributed to the Chinese government.
The German government hopes that companies will reduce their dependence on China. However, the German economic community's interpretation of "risk removal" may be different from what politicians imagine - in 2023, German companies will invest more in China than ever before. They use the money to secure production and supply chains from geopolitical tensions. By more intensive localization of production in China, the Chinese market can continue to be served even in the event of a trade conflict. This is why BASF invested tens of billions of dollars to build a new production base in southern China.
In China, an innovative product has the same functions as foreign products, but the price can be 30% cheaper. Almost no German company wants or is able to say no to China. Nuremberg said: "No country has such a perfect supply chain network like China. India is also an attractive large market, but it is currently unable to keep up." (Author Martin Benninghoff, translated by Aoki )▲
