Part II of CCG Munich event, Feb. 19
Springer Nature, Alibaba Group, Qingdao International Academician Park, and Sungrow Europe representatives and diverse perspectives
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 four impulse speeches by:
Niels Peter Thomas, Managing Director Books, Springer Nature
Karl Wehner, CEO, Alibaba Group (Germany, Switzerland, Austria, Eastern Europe, Turkey)
Ömer Sahin Ganiyusugoglu, QIAP Industrial Development Consultant, Qingdao International Academician Park
Moritz Rolf, Vice President, Sungrow Europe
For the full transcript, please refer to this Google Doc or the attached PDF file.
Niels Peter THOMAS
Managing Director Books, Springer Nature
Thank you very much, Henry. I don't want to make any commercial break-in here, but we publish a lot of books from CCG so that makes sense. You don't have to pay to read and they are really very good. So I can only encourage you.
I'm an academic publisher and I would like to extend beyond that closely, if I just may because I think if we look at it from a scientific perspective, if we look at it from an academic perspective, decoupling from China means not de-risking but means a significant risk for our own academic and scientific system.
China has last year overcome the U.S. as the biggest supplier of new knowledge in the world. And there are many disciplines, especially the applied sciences - not so much in the humanities and the social science - but on average, there are many disciplines where one-third or even 40% or even more of new knowledge comes from laboratories in China that are all published in peer-reviewed English language international publications. So really reducing the number of academic cooperations and also reducing the number of innovation cooperations on a corporate level would significantly risk our own academic research capabilities. It's not anymore the other way around.
So this is, I think, a very important detail. Just in the last couple of years, there was this tipping point of China being really needed in many disciplines. And not only in this room, but in many other discussion groups, people will always say, yes, this is about quantity, but look at quality. I just want to point out that the average article published in an international English-language journal is cited over average by other researchers in the world. So if you take that - well, in academic circles, this is a debate that's a very big argument - but if you take citations as a quality measure, for the quality of an article, then the output of Chinese researchers is over the world average. And it has come a long way in the last couple of years, continuing to grow, we see the difference among changes. So this is really important.
But the interesting part here is also that the number of academic collaborations between Chinese and foreign researchers has been in decline since a couple of years ago. That might also be a pandemic effect, but we have to be very careful with also political effect. That is the real risk that I see on the academic side, which we really have to counteract. Otherwise, we will be facing more academic issues, in many corporations but also in the research model of the world, which is a serious issue.
Karl WEHNER
CEO, Alibaba Group (Germany, Switzerland, Austria, Eastern Europe, Turkey)
Thank you for having me join this round. And it's really interesting to see that we're all pretty much aligned with here in terms of the possible right things to do.
You know, from Alibaba's perspective, what we're focusing on predominantly in the DACH region - Germany, Austria, Switzerland - is to help small-and-medium-sized businesses trade internationally using technology. So we are not a manufacturer, we are not a retailer, we are a platform economy that brings buyers and sellers together. So trading partners find each other on the platform and especially on the EU platform.
So when we speak to small-and-medium-sized businesses, when we reach out to them as Alibaba, they don't care if you're Chinese originally - the company. What they care about is the situation they are in and how to find cost-efficient ways of growing business. I think businesses around the world have always thought about not putting all their eggs in one basket, and I don't like the term "de-risking" because it's got a negative connotation to it. But all of these small-and-medium-sized businesses are saying we want to extend, we want to use technology.
But what we also hear is a high level of uncertainty. And that's - if you look at the supply chain - highly debated in Germany, brought to life, not considering the consequences, naively thinking that it only affects companies of the size between 3,000 and 1,000 [people] - really naive if you're thinking that. And this uncertainty slows economies down.
But German companies are anyway not the ones that are known for being - I don't wanna say “fast” because that's the wrong term - but taking risks, be bold. And in a situation like we have right now - that's where a government or geopolitics are creating uncertainty - it just becomes more and more difficult to actually take action and to have that leap of faith against maybe a government saying, look, try and diversify. This is like your parents saying, don't touch the hot plate on the oven, right? Everyone knows that. But then it also lingers with the companies in terms of, do I have to do this? Shall I be doing this? But then I don't have guidance, and that creates uncertainty. And will business be sustainable if I grow my businesses internationally or towards China?
So from that perspective, I think it's most important for all of us over here to actually articulate this to our relative authorities that creating more uncertainty is not the solution. Businesses need certainty and then businesses will flourish. You create more and more uncertainty, you create more and more fear. You tell businesses which countries are good or bad for you - first of all, it doesn't work, right? Like we heard today, the investments in China are ramping up even with BASF having these issues. The big multinational companies in Germany do seek to grow their investments in China and abroad because there's so much uncertainty in the local government, there's more certainty going to the U.S. or to China in terms of subsidies. Right there, I've got to beef up my bank account before even starting building my plant. In Germany, we have to discuss for 10 years and the result is that Elon Musk comes to build and it was what everyone wants to do. So this is really, again, what I think we should all be vocal about, creating certainty versus uncertainty.
Ömer Sahin GANIYUSUFOGLU
QIAP Industrial Development Consultant, Qingdao International Academician Park
My name is Ganiyusugoglu, a very rare name. I'm a native Turkish. I have a German education. I am already 50 years in Germany and educated in Technische Universität in Berlin. My focus is machinery, industry, production, technology, and so on. And so smart factories and all that. We're here today. I work for a German company. For sixteen years, I was the Managing Director of a leading Japanese private-owned company in Germany and Europe. And for 18 years, I have lived in China, in Qingdao, latest. 我是半个中国人 [I am half Chinese]. I'm awarded the Friendship Award of the central government. I'm a member of the German National Academy of Science and Engineering and I'm also a member of the International Academy for Production Engineering. I will go tomorrow to Paris for the annual meeting where we'll meet all the professors and all academicians from all over the world for academic purposes. With this background, I want to make my comments.
For 18 years, I've been living with my wife in China with all my history. Today, looking around the world, "What is happening?" my wife says, "Can we live on in China? Because we feel today China is the best place for living in peace, for living with good perspectives for the future.
For example, we are talking about climate change. Climate Change is one of the aspects of the Sustainable Development Goals of the United Nations. And there are 17 Sustainable Development Goals. When you watch one by one individually, the country which contributes most to Sustainable Development Goals is China. One of the goals is eliminating poverty - China best design. Climate - China best example which the country contributes also financially to climate change. And so on and so forth, including Xinjiang.
I fully agree with you what is happening in the positive sense here. So looking entirely, I'm saying why I'm not 30 years younger to stay more in China and to contribute.
Then another aspect, academic contributions. After tomorrow, when I meet maybe 300 professors from all over the world, also from America, a minimal half of them are Chinese, contributing to American academics and industry. In England, many professors are Chinese in the publications - I really agree with you; I'm part of it - and many academic work is coming from China.
Furthermore, de-risking. Mr. Schumann has a good verdict. De-risking is not only a political issue. De-risking is coming from the bank business. What is our risk when we grant a credit? This is de-risking. This is financial wording. So the German Chamber of Commerce head in Beijing Mr. Hildebrandt says, de-risking is nothing the politics has to teach us. There is common sense in industry, ja? Don't put all your eggs in one basket.
So, and finally, I think Germany and China have the best precondition for collaboration in the future. Germany sells mechanical gears; German machine's best. And China sells digital gears and sets for business how to speed up - "China speed". So when we cooperate, we can make 1+1=3. We can contribute globally, ja? So these are my feelings and my thoughts and I always say, why I'm not 30 years younger?
Moritz ROLF
Vice President, Sungrow Europe
My name is Moritz Rolf. I'm the VP in Sungrow Europe here and based in Munich.
Chinese manufacturers of power electronics are one of the biggest manufacturers in the world, apart from Germany. But I actually want to give you the perspective from the business side, what it actually now means by de-risking because we are most detective from the solar industry, probably one of the biggest development factories competing with 100. We talk to friends and media and I see solar energy is a very, very political topic. And so we already feel how politics is in the field of business now.
The focus at the moment is on solar modules. We all know that for most of the raw materials for all the solar modules, 95% of solar modules coming to Europe are imported from China. And the reality now is that the European Union wants to protect the few solar manufacturers that are still existing. If you ask anyone in the industry, they would say you should be safe; you should have done it 10 years ago, maybe 15 years ago; and today is the day. I don't want to go into politics, but the last government, 15 years ago, should have not let all these solar module manufacturers that still were existing sort of going out.
Now we have a situation that we have in Europe a total of 7 gigawatts module manufacturers left. We installed last year in Europe 54 gigawatts or so. How is the whole energy transition going to happen for 7 gigawatts of modules? And you're not going to build 54 kilowatts of modules in the next few years.
But it's political now that one of the last module manufacturers in Germany is based in Saxonia. There's gonna be an election in September, which will put a timeout on the module manufacturer from bankruptcy in a year where you have an election. We now learned last week there will be a new regulation from the European Union - the Net-Zero Industry Act which is supposed to support and protect the last module manufacturers left in Europe.
So we are seeing international business in order to support these module manufacturers. It makes sense to me.
And I understand that resilience and de-risking are important. I'm European as well, but I think it needs to be the right way. It's not just to say, okay, we have cordoned off Russian oil last week; we don't have Russian oil and gas anymore; we now need to be careful that we don't rely on China from the solar side, the new energy side. It's correct, but it needs to be done in a way that the business and the energy transitional conditions still work. It's just, through the experience-sharing of what we've seen, nothing particular to the industry's problem follows this way.
Panel infrastructure, for example, we had situations obviously different, but it does have an impact. And obviously, just the other day, all of them said the solar industry and the energy transition would not be where it is now without the Chinese manufacturers. And that's utterly clear without Chinese modules, without Chinese inverters, and everything else, we would not have the amount of solar installed in Europe - impossible.
The last 15 years, we've been working for some seven years. I was at a German development factory before. We've all done great business with the Chinese companies - all the stakeholders, all the customers, installers, students, large project developers. It was a great business relationship. But you can notice now there's insecurity from all these customers. They don't know what to do. Should we continue to rely on Chinese supplies? Do we need to look for European [ones]? Most days, none are European, what are we gonna do?