Liaoning's capital forges links with Germany in effort to revitalize the city

It is the port and brewing center of Qingdao in East China that historically has the closest connections with Germany.

But the European nation is very much tied up with the future of Shenyang these days, mainly based on the sizeable automotive sector built up through the presence of BMW and its local partner.

During German Chancellor Angela Merkel's visit to China last August, the two countries signed an agreement to boost mutual investment, which included the establishment of a cooperation base for Chinese and German enterprises in Shenyang.

The opening of a consulate general in the city last October further signifies the importance of the relationship.

"Shenyang is a homeland of machinery and heavy industries," says Jens-Peter Voss, former German ambassador in Haiti and new consul general. "The city is very strong in manufacturing activities, and similar to many German cities."

Voss, 60, says Shenyang's revitalized industrial development will attract more advanced technology, improve service sectors and living conditions by reducing carbon emissions over the next five years.

This, and a solid industrial foundation, well-developed logistics system and convenient geographic location, he says, are the principal reasons for German and European companies wishing to set up shop in Shenyang.

Since the first German-Chinese joint venture was established in Shenyang 20 years ago, 115 German companies had registered operations in the city by the end of 2012, with a total investment volume of 2.1 billion euros ($2.7 billion), according to Shenyang investment promotion bureau.

"Shenyang is experiencing a transformation from heavy industries to more high-tech machinery and automobile sectors," Voss adds. "Thanks to the city's heavy industrial culture, heritage and vocational education system, recruiting qualified workers is not a problem for German enterprises."

The Association of German Chambers of Industry and Commerce in China and BMW Brilliance Automotive Ltd (BBA) have sponsored a local engineering college, one of 42 vocational schools in Shenyang, to train students.

Courses are taught in German and all textbooks, uniforms and tools are shipped from Germany. Trainees can receive direct job offers after graduation, and have the chance of obtaining scholarships to study in German universities for a year.

The increasing number of German businesses in Shenyang has prompted the national airline Lufthansa to open a direct link between the city and Frankfurt, with flights three days a week. This is likely to increase, says Juerg Christen, the airline's managing director for China, in line with passenger numbers after Shenyang Taoxian International Airport's third terminal opens in August.

Meanwhile, logistics on the ground also have a strong German helping hand with DB Schenker Rail Automotive, a Deutsche Bahn subsidiary, responsible for transporting auto components from Leipzig to Shenyang.

"With a transit time of 23 days, the direct trains are more than twice as fast as maritime transport in reaching Shenyang," says Karl-Friedrich Rausch, manager with DB Mobility Logistics. "This is a major incentive for the Eurasian Land Bridge."

But it's not all Germany. Florian Schmied, Shenyang board chairman of the European Union Chamber of Commerce in China, says around 50 European companies will come to Shenyang over the next three years to form an industrial park in Hunnan new district for sustainable urbanization .

Proposed by the Chinese government and supported by Markus Ederer, ambassador of the Delegation of the European Union to China, two years ago, the project is aimed at providing clean-energy projects, energy-saving solutions and high-tech industrial and construction materials.

Tax cuts, rent-free land and incentives for innovative activities are being offered by local government to attract companies.

"In the next 20 years, 300 million Chinese people will move to the cities," Schmied says. "They need mobility, greener construction materials, proper health care and information technology to settle down, which could be China's next new market growth point. The market potential is certainly huge.

"European companies can use their technological edge to help Shenyang become a leader in this industry."

In a sign that more European companies are inclined to invest in Shenyang, the United Kingdom, Australia and Thailand are planning to open consulate generals in the city next year, says Shenyang's foreign affairs office. (France opened one in 2008.)

However, Schmied feels that the development of the service sector in Shenyang is lagging behind that of the manufacturing sector. Many European workers find it difficult to adapt to Shenyang because it doesn't have the facilities they are used to in their own countries, especially for families.

European parents cannot find suitable schools for their children because Shenyang international schools follow the US educational system.

"Apart from the normal cultural and language barriers, these issues should be resolved as soon as possible if the city wants to attract more high-quality talent from Europe, particularly regarding hospitals, schools and emergency services," Schmied says. "Our member companies don't face these issues in China's top-tier cities such as Shanghai and Shenzhen."

Again, the Germans are quick off the mark to see a business opportunity in service shortcomings.

Maritim Hotel Group, a German international hotel chain, has invested 700 million yuan ($114 million; 89 million euros) in a hotel in Yuhong district.

"About 55 percent of our guests are Europeans and the majority of them are German," says Udo Doring, general manager of Maritim Hotel Shenyang.

"In comparison with Chinese hotels, we know more about what our European guests want and how to set up adequate services to cater for their preferences."

Contact the writers at zhongnan@chinadaily.com.cn and wuyong@chinadaily.com.cn

(China Daily European Weekly 05/31/2013 page16)