On 17 June 2008 the Chinese-German Symposium is taking place as part of transport logistic China 2008. The symposium is being chaired by Professor Frank Straube, Head of the Logistics Department at the Technical University of Berlin and Deputy Chairman of Germany´s logistics organization, the Bundesvereinigung Logistik. He reports here ahead of the fair on the status of German-Chinese cooperation.

Messe München GmbH: Professor Straube, you have just got back from China. What have you got to report from this latest trip?

Straube: Well, for one thing, good news from the Chinese-German Hochschulkolleg (CDHK – Chinese-German Graduate College) at Tongji University in Shanghai. The Kühne Foundation in cooperation with the Technical University (TU) of Berlin is supporting the setting up of a Department of International Logistics Networks and Services there, which will be a direct partner of the Logistics Department at TU Berlin. The head of the new department – a Chinese professor – will be appointed provisionally at the beginning of July.
The CDHK is also deepening its involvement in other ways, through the stepping up of exchanges between students and doctoral students at both universities. For example, in April six students from the CDHK registered for a semester here at the TU Berlin. After this time they will do a three-month period of practical experience in Germany.
In return the Chinese government, represented by the China Scholarship Council, will this year for the first time award full grants to 18 German students at CDHK to spend a period of study at Tongji University in Shanghai. The offer is directed at students of electronics, engineering, economics and law.

Messe München GmbH: What goals are both sides pursuing with this cooperation?

Straube: The main goals are to promote top-class education of Chinese students in a master´s program on supply chain management, and to disseminate logistics knowledge for executive managers of international and Chinese companies. The research work will be carried out in close cooperation with the research activities at the Logistics Department at the TU Berlin, and are aimed at developing strategies to internationalize logistics systems in Asia.

Messe München GmbH: Does this mean an improvement to the personnel situation in the logistics sector in China?
 
Straube: China´s economic expansion has also brought with it an above-average growth in the logistics sector. The result will be a lack of specialist staff, especially in the logistics area. Already we see an increased demand for further training in this sector. The European Logistics Association recognized this early on and today offers certification for managers in the logistics field in accordance with European standards – the training is divided into several modules, which are offered at a high level by both Chinese and German professors.

Messe München GmbH: Does this mean that German logistics providers, with their many years of experience, will be welcome on the Chinese market?

Straube: That depends very much on what services a German company wants to offer there. China´s accession to the WTO has meant the market there has opened up for foreign companies – this is seen for example in the reduction of custom tariffs, an improvement in the legal situation and better sales opportunities through the removal of restrictions. Nevertheless this ‘opening’ is still tied to certain regulations or limitations of various kinds. Just how closely foreign firms have to adhere to the requirements depends on the particular goals of the company. For access to the logistics market, companies still require either an A or a B license. At the moment only large state-owned companies can obtain the A license to operate nationwide, and a few international companies can obtain a restricted A license for operations limited to one province. The A license is granted by the Chinese Ministry of Foreign Trade and it entitles the company to draw up legal documents and offer its services direct. This means that the companies are largely independent in their planning and legal security, and have direct contact with their customers. To get an A license, many conditions have to be met, for example, twelve years experience on the Chinese market and a minimum turnover of 600 million RMB, of which 300 million RMB comes from transport. If a company operates in several areas (air, sea), or different provinces, then this company needs further A licenses. In addition there are logistics providers with a B license – here they need to cooperate with a Chinese company or the holder of an A license.

Messe München GmbH: Is it only these administrative regulations that keep German companies out, or are there other barriers?

Straube: Market entry is also made more difficult sometimes because of linguistic and cultural differences. Intercultural competence is one of the key requirements for the internationalization of companies. For logistics in particular intercultural management is one of the core competences, because here people from a wide range of backgrounds are working together on a day-to-day basis in global networks on joint projects.
Language barriers should not be underestimated by companies that want to enter the Chinese market. Here the CDHK at Tongji University is doing some pioneering work. In the CDHK German business and industry is so far supporting more than 25 university chairs in engineering and economic disciplines. Over a period of three years masters students from all over China are educated at the CDHK, including in logistics. This course is supplemented by a semester at a German university with follow-up practical experience in a German company. In addition to its teaching and research activities the CDHK aims to give new impetus to the cultural dialogue between Germany and China. Graduates are very well prepared for their later professional life – they are virtually predestined to work for a German company in China or vice versa.

Messe München GmbH: Training staff well also costs money. Will the export of goods from China continue to be a profitable business in future, too?

Straube: Here we have to make a distinction between the now very well developed coastal region and the much larger hinterland. Of course China´s economic boom, in which the country has enjoyed double-digit growth in GDP throughout the last 30 years, has brought change particularly in the coastal regions. The wage structures there have kept pace with this economic upturn, and in some areas these have now reached European levels. Actual manufacturing has for some time not been based in coastal regions – the Chinese hinterland has come up. There it´s still possible to manufacture relatively cheaply and if these regions are now participating increasingly from China´s upturn, we will see increasing demand here, too, for western products and therefore for a continued high export rate of European and German products.

Messe München GmbH: Do you think Chinas´ role in the global division of labor will therefore remain the same?

Straube: At the moment it still looks that way. However we can already see a trend towards moving production out of China and to countries like Bangladesh and Vietnam. And then there´s a counter-trend: the regionalization of production. A string of companies have moved their production back to Germany, as they were not able to profit adequately from the locational benefits. The reasons for this are in each case different.


About transport logistic China
transport logistic China, the meeting point for logistics, telematics and transportation, is being held at the Shanghai New International Expo Centre in China for the third time from 17 to 19 June 2008. More than 300 exhibitors from 33 countries presented their products and services at transport logistic China 2006 and Air Cargo China 2006. Over 9,000 visitors from 81 countries attended the international trade fair, which also featured an extensive program of related events and conferences. Additional information is available at www.transportlogistic-china.com.

About Messe München International (MMI)
Messe München International (MMI, Munich Trade Fairs International Group) is one of the world´s leading trade-fair companies. It organizes around 40 trade fairs for capital and consumer goods, and key high-tech industries. Each year over 30,000 exhibitors from more than 100 countries, and over two million visitors from more than 200 countries take part in the events in Munich. In addition, MMI organizes trade fairs in Asia, Russia, the Middle East and South America. With six subsidiaries abroad – in Europe and in Asia – and with 66 foreign representatives serving 89 countries, MMI has a truly global network.


Press contact:
Petra Gagel, transport logistic China 2008 Press Office
Tel. +49 89 / 949-20 244, Fax +49 89 / 949-20249
petra.gagel@messe-muenchen.de 

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