Final part of CCG Munich event, Feb. 19
1.0 (One-Point-Zero), the Federation of German Industries (BDI), CCG, China-Bridge, and Huawei European Region representatives engage in final discussions.
Hi, this is Yuxuan from Beijing. On February 19, the Center for China & Globalization (CCG) collaborated with the German Federal Association for Economic Development and Foreign Trade (BWA) to organize a luncheon roundtable right after the conclusion of the Munich Security Conference.
Themed "China, Europe, and Globalization in 2024: What’s Next for Business?", the event is composed of two roundtables - one on de-risking and the other on green & digital transition. It gathered over 30 figures from German and Chinese businesses, chambers of commerce, academia, and the media.
The CCG Update will release the insights from the two roundtables held that day, following the order of their presentations at the event. Today's newsletter features the impulse speeches and discussions by:
Eric VOIGT, Senior Executive Partner, 1.0 (One-Point-Zero)
Stefan GÄTZNER, Chief Representative Greater China, BDI
Henry Huiyao WANG, former Counselor to State Council and Vice Chairman of MOFCOM China Association for International Economic Cooperation, People’s Republic of China; Founder of CCG
Michael SCHUMANN, Chairman of the Board, BWA; Chairman, China-Bridge
Kenneth FREDRIKSEN, Vice-President of Huawei European Region
Mike DE VRIES, Managing Director, China-Brücke e.V.
For the full transcript, please refer to this Google Doc or the attached PDF file.
Eric VOIGT
Senior Executive Partner, 1.0 (One-Point-Zero)
I’m Eric Voigt representing One-Point-Zero with Turing Vision, Ones Technology. So as one from that side - European technology - in Shenzhen, Hong Kong, Munich, and also Berlin, having clients from across all investments from Asia to Europe and India. So I have mostly kept within one side.
But I would agree with Christian. What I see in both divisions is that the well-meant intervention of politics and also the discussion for the majority of the players like the middle-sized companies actually make up the majority of any economy. You don’t really have to bend to actually compute politics. It is impossible. Whatever we want to do, they don’t want a plain view to see from both sides. It’s not really helping.
I'm gonna fully agree that risk assessment is an intrinsic part of any business, whether it be Chinese, Korean, or Japanese - it's part of them. It's not something we have to educate them on, by any chance, plus level money and fair deal. So they are very used to business and the way with money.
Coming to my point, I do see a drive from every side to actually do business together. And what I do is this, that there is transparency, right? Chinese businessmen are kind of unaware of how China is seen and viewed by geopolitical vantage. But there's a clear gap between how I can do business as a Chinese company outside that the rules or perceptions will change. It's not. The majority of them didn’t compute it; it's not part of the daily business. They don't do the law searches pre-business, the whole thing, and sometimes wonder why there aren’t many businesses on a fair price.
Here on the other side, I would say I see opportunities to do business, especially with China or with Asia. Or developing and researching because the inputs are missing. There's still no one answer for every company. It's not China plus+x or only China or out of China. There's always a mix of things. But with the current transparency of in-transparency, I think it's very hard to make an informed decision. The amount of information is opaque and it's too much to actually compute.
So what I would wish for is that there are more companies who want to do business and that, as everyone before me has agreed, most businesses do not necessarily need the assistance of politics to do it. And I think rather so you all have to work around politics. That's the way it always has been. So a bit more transparency would be fine and hands-off rather than instruction. Thank you.
Stefan GÄTZNER
Chief Representative Greater China, BDI
On the ground in China, I would say the AHK is the biggest network for those issues because, for example, BDI or other member associations like BDMA and BDA focus more on new offices in China, much more into that macro-level-made regulatory issues. If you need to have boots on the ground, it’s best to look up to connect with Shanghai, Beijing, Tianjin, and Guangzhou, and also get familiar with the local issues. So I think it would be the most pragmatic way if you have concrete questions asked in China.
Henry Huiyao WANG
former Counselor to State Council and Vice Chairman of MOFCOM China Association for International Economic Cooperation, People’s Republic of China; Founder of CCG
Thank you, Andrew. I think this is really an excellent roundtable discussion and I learned so much. And what I think is quite upbeat at this year's Munich Security Conference is that there's less China bashing, more positivity in looking at China to play a role because we're confronted with so many risks. We have to work together. So to avoid “lose-lose” has become the main theme of the year.
You talked about transparency. I think it's good. I had a meeting with the State Secretary from Olaf Scholz's office. During the Munich, we had a bilateral meeting. The German government has a delegation going to China. I also noticed Xinhua news agency’s report for Mr. Wang Yi and German Chancellor Olaf Scholz. They both said they wanted to create a better environment and better business opportunities for both sides. That's a really good thing.
So what I would hope is that if German businesses have any concerns or recommendations, maybe it's a good time to go with Olaf Scholz to China, whether on his delegation or visiting at the same time, to really send a message that here's where we want to see, here's what you want to improve. And now you don't need a visa to go to China, so it's much easier now. Also, we as CCG, when we go back, we're going to debrief what we learned at Munich. We can meet with the Ministry of Foreign Affairs, the Ministry of Commerce, and the DRC. We will reflect on what we hear and we will also send in the report on what we have learned from here.
So I think it's important this exercise continues. I also recommend to different government departments that we have the Comprehensive Agreement on Investment (CAI) between China and the EU. Maybe China should start first? Ambassador Fu suggested we lift the sanctions altogether at the same time, but it looks difficult from the European side. But I would encourage China to do it first, or maybe with different countries, like Hungary Germany, or Greece. But starting to do that would be very good. So I think it will be good to push from both sides. And I think as Premier Li Qiang said in Davos, China continues to open up and wants to have more transparency. I think you can all go to China and tell all the channels you need to talk about those so we can really get some synergy to push forward a more favorable climate for cooperation on both sides.
At the same time, you probably have to talk to the German government as well. German companies sell more cars in China than the U.S. and the EU combined, right? Also, other companies, Merck or BASF, you name it. Of course, they are big companies. But big companies provide a big chunk of GDP growth for Germany, and we cannot neglect that. We have to sustain that. So now the economy is more uncertain with the U.S. election, the China option will be even more important to have. So that's my comment. Thank you.
Michael SCHUMANN
Chairman of the Board, BWA; Chairman, China-Bridge
Well, one more issue that I would like to exchange opinions on, and maybe you can share some of your background knowledge with us on that as well. It's the CAI, the China-EU Comprehensive Agreement on Investment, and how can get that back to life again. We've seen some interesting movements in China. At the end of last year, the concept that is being coined as unilateral opening led to the visa liberalization. And usually, you know, the main tenet of diplomacy is reciprocity, right? But challenging times need innovative measures. China actually set an example that sometimes it's wiser to have a courageous diplomatic effort.
I've heard that there were rumors and discussions that this concept of unilateral opening may even go farther that people are thinking about maybe implementing some of the measures that have been negotiated for more than seven years in the negotiations leading up to the CAI. Let’s make this clear that it cannot be verified at the moment in the European Parliament. But that might be interesting to witness and to hear your opinion on. And also, I think the major obstacles are the sanctions, members of the Parliament, and members of European think tanks. And I would just like to convey a message if you debrief your people back home: if we could see movement on that angle, it would certainly help to get the task back on track.
Henry Huiyao WANG
One of the obstacles is that five members of the European Parliament were sanctioned by China. But now they're having a new election. So after the new election, we are starting with new members, then we can forget about that. We can propose that, of course.
Mabel Lu MIAO
As you know, this is an outcome of our event today, to make kind of a potential policy impact together. As you said, both sides would like to do something positive, but maybe think tanks can do the first step, and then move forward. I think Scholz will come to Beijing very soon. So we can propose this to our government.
Andreas HUBE
I think this is good. I think this brings me also to the end of this discussion. Again, unless there's somebody who’d still like to say something?
Kenneth FREDRIKSEN
Vice-President of Huawei European Region
I want to give some comments about the green and digital transitions because I believe this is probably the most important challenges and opportunities we have in front of us. But as Mühlhahn was explaining as well, it’s very much linked to the previous topic of de-risking. I mean, the countries and the economies that will be able to go through the green transition and also the digital transition successfully will be the successful countries and economies in the future. And I believe, on a positive note, that's maybe how we will find our way back to each other because it will need cooperation. And we see that.
That's basically how we now try to approach our business in Europe. While we are facing these very politicalized environments, we try to focus on how to contribute to these transitions, either for customers or for the EU. Because, if you are able to somehow change the narrative through value creation rather than forcing your way through political discussions where you have confrontations - I don't think that's the way it works. For us, as a company, what we try to focus on is: how can you help SMEs in Europe get access to technology? Anyway, like previously in November, I was opening our innovation center in Paris where we are giving access to SMEs across Europe to our technologies, our platforms, allowing them to develop their solutions and diversifications, and also helping them with go-to-market models in order to go global.
This is the way forward, I believe, because I don't think Europe or individual European countries are strong enough themselves to come out of these two transitions stronger than the U.S., China, Japan, or South Korea. And I believe that only if we continue to demonstrate the real value of cooperation and also what we, as a Chinese company, can bring to Europe from a technology perspective, from a competence perspective, that's also how we can change the narrative. Yes, there are a lot of de-risking policies in place already, but those de-risk policies are made worse through the narrative. If we can manage a narrative and how these de-risking policies are implemented through positive interaction, I believe things will potentially go better again. But of course, that requires efforts from both sides.
So I just wanted to finish from a positive note and also from our perspective that through the business, I believe we can also manage these difficulties by demonstrating the real value. Because we should also remember that the next transition is the intelligent transition. And the world will not look the same after the intelligent transition has been completed. Again, unless Europe ensures that they stay competitive both in the digital transformation and also in the green transition, we, as Europeans, may end up very much lower down the hierarchy and the value chains because that's where the value will be created in the future - it’s in the intelligent domain. So it's extremely important that we somehow find the way back together and utilize the best of global cooperation.
Michael SCHUMANN
Chairman of the Board, BWA; Chairman, China-Bridge
Just one idea. A very smart answer - like you said, by the next election, they will be gone anyway. But maybe we can return to that kind of diplomacy that characterized the years of Angela Merkel. And Olaf Scholz will come to Beijing in April. If he could take something home, like the sanctions on MERICS being lifted, I think that would be a major political win for him. I also don't like the political bias of MERICS. We’ve discussed this with them and about them many, many times. But I think that would be a gesture that would be appreciated very much also by the German public.
Mabel Lu MIAO
I think this initiative you mentioned just now, can also make some gestures to China. Actually, I think this is a two-way enforcement.
Michael SCHUMANN
You're right. We have the same in Germany, but sometimes the smarter one needs to act first.
Henry Huiyao WANG
I met Michael a few times. We always get together. So this Munich Security Conference only has two China-related side events, one by MERICS, one by CCG. He came to my event every year. So we promote that.
Mabel Lu MIAO
We stay in touch.
Mike DE VRIES
Managing Director, China-Brücke e.V.
Thank you. Yeah, thank you. My job is now wrapping up, closing this interesting meeting today. Henry, as you mentioned already, I learned a lot today. One interesting statement has come from you when you said, okay, we are almost aligned, all of us here. And the question is, why is it like that - that the whole table is aligned at the moment? It means we are all coming from business. We are all business-ready. We are international orientated. Every one of us is internationally active. We are intercultural, which is important to get this understanding. And at least we are open-minded, future-orientated, and peaceful-orientated. These are all abilities which combine us and align us. And we were focused, as mentioned, on a situation which was described by the MSC in the last three days. And we discussed it also last month in different panels, a situation which is at the moment very frustrating. It's shocking on one hand.
And yes, just to mention, lose-lose is not a nice future. And lose is also not a goal for business and positive-driven people like us. So it means we have to do something. We have to do something like we did today, which means we have to communicate, we have to support the dialogue for the future, to change something to make it not a lose-lose, to make it a win-win.
As we have mentioned months before, many times we have heard this from our Chinese friends. And how to do that? We already communicate. So we have to get other people into this dialogue, into this communication. Where should we start? We would start when these people who are telling us to de-risk, to give us advice on what we have to do, where we have to go, and how we have to do our intercultural communication and business. So we have to get the politicians into our dialogue. This is one which each of us can do any day, every day, again and again, on this side and also on the other side. The politicians have to learn - and I just can only speak for the German or European politicians - the knowledge - the lack of knowledge, I have to say - the lack of knowledge of China is there. You can see it and you can hear it. So we must make sure that politicians who are traveling to China, who are coming back from China, talk about what they have seen. Testimonials are the most convincing examples and most convincing arguments you could find. So we have to make our politicians testimonials. We have to bring them; more politicians have to go; more politicians have to learn from us who are the experts who have traveled many times or are even living in China. So we have to get more influence, more communication to the politician level that they understand what's going on and where they can guide us, by the right arguments and the right knowledge. This is one point which I just want to place here to give you for the next weeks and future for the activities.
But it's not only the politician. There's another level we have to mind the soft factor which is called media. The media are the speakers of the politicians and the media also mostly are self-driven or driven by third parties, whatever it is. But the media have the impact because they have the voice. But the media are also spreading - I will not say fake news - but they guide you to a wrong direction and they guide you to a wrong opinion with the people getting. Politicians read the media. They like to read what they're saying. If the media are writing de-risking, they believe, okay, there's a derisking. But also the economy people, the enterprises reading de-risking. And if a politician is saying something about de-risking, the SME companies will not go to China. They will think about it. The ones who are already there - you can see by the figures which I mentioned today - are investing, they are feeling strong and they're feeling safe. They know how the business is going. But the new ones which we want to bring in, need to understand that everything is coming from an unknown level, an inexperienced level. So we are forced to take risks.
Media, you can't convince them, you can't inform them. And I think we also have to think about getting the media on the table, discuss with them in different ways, and try to bring expertise more in. The third level - and that's at the end - these are our clients, our customers, the people, the community who are reading also the media. They're reading de-risking. If there's de-risking, there's a danger. If there is danger, it's worse, it's getting critical. So they're feeling uncomfortable. China getting this brand of “uncomfortable”, it made itself a threat on that.
So from this image, we have to bring it away by understanding what is behind China, how is the cultural functional, and how we are working together. The closest tides are strong and getting even stronger, but they have to learn. So we have to inform the people getting them. We can't do it from the German side alone. So China has also, Henry, to do something for their own image, which means to bring in the image. Just an example or at least a late recommendation: when the visa was getting free a couple of weeks ago, it could have happened that it was accompanied by a tourist campaign, which would say, okay, every German tourist, please come to China, free visa, please visit us, experience China. So we did good, but we could have done better in that way.
These are just three different levels of activities I just recommend and want to give you as a task, as a job in which each of us has to carry, contact, and discuss with the politicians. Contact, don't fear the media, just talk to the media. Look for the content for the discussions, and then at least also bring the ordinary people in, and bring more Chinese expertise and more Chinese experience onto the platform. This is what we are doing with the China Bridge. If any one of you feel motivated now by this and say, how can I do this? Approach these politicians, approach the media, approach the community. Just join the China Bridge. And because they are people who are safe-minded and going forward working on this. It's all our job.
And Mabel and Dr. Henry, so both of you, thank you very much for this nice luncheon, discussion, roundtable, dialogue, and communication. Michael Schumann and Andreas Hube, thank you for organizing everything. And on behalf of all the guests, I would say thank you for hosting us. And we're looking forward to common activities in the future and latest next year with the new picture on the topic, which is not lose-lose but win-win.