Documentation Brochure - Hamburg Summit

EU-China Trade Relations
Lutz Bethge, Montblanc International Laurence Barron, Airbus China Cai Weici, China Machinery Industry Federation
Diethard Gagelmann, Otto Group
The development of trade is an accurate
reflection of economic development
in China. The growth rates are
immense, opportunities are enormous,
especially for European companies, and
not just in basic industries such as
energy, automotive or chemicals, but
also in luxury goods. “A few years ago
no-one could imagine the Chinese as
customers for luxury goods on a large
scale,” said Lutz Bethge, Managing
Director of Montblanc International in
Hamburg, but “in the next decade China
will be the No. 2 market in luxury
products, exceeding the United States.”
Considerable problems exist, of
course, inevitably so. They mainly relate
to products such as textiles, clothing
or shoes. There is a vague “feeling
of Chinese invasion” in these markets
in Europe. The EU criticises exports of
pirated products and with it the lack of
protection for intellectual property
rights in China. But Diethard Gagelmann,
Member of the Executive Board
of Otto Group, the world’s largest mail
order company said: “We are very
satisfied”. “China can compete with
other countries even better because of
good products.”
So a good work of information
remains to be done in order to clarify
that European firms also have opportunities
in China. How big they are is
something that Cai Weici, Vice President
of the China Machinery Industry
Federation, can underscore with ease in
relation to his own industry. It is, he
said, China’s largest and, most unusually
for China, it is an industry with an
import surplus. But he set clear priorities.
“We need efficiency to protect the
environment and we need to improve
quality.” That was why the best opportunities
for foreign providers were in
the high-tech and high-value sectors.
A company that clearly fulfils these
requirements is the European aircraft
manufacturer Airbus. “20 % of our entire
production goes to China,” said
Laurence Barron, President of Airbus
China. At the same time, “half of the
Airbus planes flying in the world have
parts from China.”
The question for all European partners
in trade with China is, however,
whether they can make a profit or trade
is based on the “you pay all, we get all”
motto that is imputed to the Chinese.
“Pricing was a very painful part, but we
are making a profit,” said Barron, commenting
on experience at Airbus, while
Bethge’s brief comment was: “It’s OK.”
Both men realised, of course, that it
is no longer merely a matter of selling
their products to China. Service and
research are two keywords that will be
increasingly important in the future.
“People don’t buy a brand, they want
service,” said Bethge. Barron agreed.
“Service,” he said, “is a very competitive
issue.”