Oktoberfest China - AHKs

Beijing • Guangzhou • Shanghai
IN THIS ISSUE:
October - November
2008
Oktoberfest China
Cover Story: Record Number of Visitors at Oktoberfest
Beijing Financial Street | Profile of German Expats in Shanghai | WWII German Passports Found at Shanghai Fleamarket

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GCC Board
Beijing
* All-China Board member
October - November 2008 | 2
Siemens Ltd. China
President and CEO
Dr. Richard Hausmann *
Chairman
KPMG Huazhen Certified Public
Accountants
Partner Audit
Mr. Andreas Feege
Treasurer
German Chamber Beijing
Executive Director
Ms. Jutta Ludwig *
Delegate & Chief Representative
Delegation of German Industry
& Commerce Beijing
Deutsche Bank (China) Co. Ltd.
Beijing Branch
Director, Head of Corporate Banking
Coverage, China
Mr. Eddy Henning
Gruner+Jahr (Beijing)
Advertising Co. Ltd.
General Manager & President
Mr. Wolfgang Kohl
Volkswagen (China)
Investment Co. Ltd.
Executive Vice President,
Finance Department
Dr. Jörg Mull
TUI China Travel Co. Ltd.
CEO
Mr. Marcel Schneider
Bayer (China) Ltd.
Vice President, Corporate Social
Responsibility Greater China
Mr. William Valentino
Daimler AG
Executive Vice President
Daimler Northeast Asia Ltd.
Chairman & CEO
Mr. Ulrich Walker
Shanghai Guangzhou
Lufthansa German Airlines
Managing Director Greater China
Mr. Arved von zur Mühlen *
Chairman
Bosch (China) Investment Ltd.
Executive Vice President
Mr. Elmar E. Weitzel
Vice Chairman
Vossloh Fastening Systems
(China) Co. Ltd.
CEO
Mr. Thomas Dorn
Treasurer
German Chamber Shanghai
Executive Director
Mr. Manfred Rothgänger *
Delegate & Chief Representative
Delegation of German Industry
& Commerce Shanghai
Beiten Burkhardt Rechtsanwaltgesellschaft
mbH
Shanghai Representative
Office
Chief Representative
Mr. Rainer Burkardt
Siemens Shanghai Medical
Equipment Ltd.
President and CEO
Dr. Rolf Hupke
POLYMAX (Shanghai) Trading
Co. Ltd.
Chairman of the Board
Mr. Ulrich Mäder
Allianz China Life Insurance
Co. Ltd.
CEO
Mr. Christian Molt
Management Engineers
China Ltd.
Managing Director
Ms. Brigitte Wolff
The German Chamber of Commerce in China
Trolli Confectionery Co. Ltd.
Guangzhou
General Manager
Mr. Michael Stein *
Chairman
German Chamber Guangzhou
Executive Director
Ms. Alexandra Voss *
Delegate & Chief Representative
Delegation of German Industry &
Commerce Guangzhou
Lufthansa German Airlines
Guangzhou
General Manager, Southern China
Mr. Nico Beilharz
TCA Ltd. The Cable Assembler
Dongguan
CEO / President
Mr. Frank Jaeger
VA TECH ELIN Transformer
Guangzhou Co. Ltd. (Siemens
Group)
General Manager
Mr. Dirk Soete
C. Melchers GmbH & Co. KG
Guangzhou & Chongqing
Representative Offices
Inspirion GmbH Guangzhou
Representative Office
Chief Representative
Ms. Renate Tietjen

The German Chamber of Commerce in China
www.china.ahk.de 3 | October - November 2008

Preface
The GC Ticker is the internal bi-monthly newsletter
of the German Chamber of Commerce in China.
Publisher
German Chamber of Commerce in China
Managing Editor
Ms. Kristen Robinson (Shanghai)
Editorial Team
Mr. Walter Jansen (Beijing)
Mr. Kilian Becker (Guangzhou)
GC Ticker is free of charge. For subscription or
extra copies please email your nearest Chamber
office
Other issues of the magazine can be found on
our website: www.china.ahk.de/publications
For editorial or sponsorship inquiries please
contact:
German Chamber of Commerce in China
Beijing Office
German Chamber of Commerce
in China • Beijing
0811 Landmark Tower 2, 8 Dongsanhuan (N) Rd.
Chaoyang, Beijing 100004
Tel: +86-10-6590 0926 ext. 308
Fax: +86-10-6590 6313
Email: jansen.walter@bj.china.ahk.de
Guangzhou Office
German Chamber of Commerce
in China • Guangzhou
2915 Metro Plaza, Tianhe (N) Rd.
Guangzhou 510620
Tel: +86-20-8755 2353
DL: +86-20-8755 8203
Fax: +86-20-8755 1889
Email: becker.kilian@gz.china.ahk.de
Shanghai Office
German Chamber of Commerce
in China • Shanghai
29F, POS Plaza, 1600 Century Ave.
Pudong, Shanghai 200122
Tel: +86-21-5081 2266, ext. 1637
Fax: +86-21-5081 2009
Email: robinson.kristen@sh.china.ahk.de
© 2007-2008. German Chamber of Commerce in China.
No part of this publication may be reproduced without
the publisher’s prior permission. While every effort has
been made to ensure accuracy, the publisher is not responsible
for any errors. Views expressed are not necessarily
those of GIC/GCC.
October - November 2008 | 4
Dear Member,
As host of the 2008 Olympic Games, China
has been under close watch from the
whole world throughout the year. Expectations
ran high due to the tremendous
changes implemented over the past 30
years during China’s reform policy. Chinese
leaders, as well as the organizers of the
Games, were well aware that the Beijing
Olympics would affect the way the world
looks at China, and they successfully presented
an open, modern country at arm’s
length from industrialized nations.
Undoubtedly great efforts were made to
display the best of the country, foremost
in the nation’s capital. In South China
people watched the games right from the
start with enthusiasm, and beamed with
pride when Guangzhou native Chen Xiexia
won the first gold medal for the Chinese
team. At 152cm in height, the 25-yearold
weightlifter set an Olympic record by
lifting a total of 212kg. It was the first of
13 medals won by athletes from Guangdong
province. One of the stars of the
Games, Zou Kai, hails from Sichuan province.
In fact, the 20-year-old gymnast
from Luzhou is the second Chinese to
receive three gold medals at a single
Olympic Games. Winning the team gold
and individual gold medals in the floor
exercise and the horizontal bar, he has
given the people in Sichuan a reason to
celebrate.
The earthquake in Zou Kai’s home province
overshadowed the run up to the date
of the opening ceremony on 8 th August.
The vast support and help offered by
numerous countries after the tragic earthquake
clearly underscored that China can
The German Chamber of Commerce in China
South China Congratulates Local Medalists,
Gears up for Germany and China Event Series
rely on its partners and that whatever
happens here is of relevance to the rest
of the world. The member companies of
the German Chambers of Commerce in
China raised a significant sum to alleviate
the situation and transferred supplies
and equipment to those in need. A charity
concert during the Chongqing station
of the event series “Germany and China
– Moving ahead together” was appreciated
and enjoyed enthusiastically by the
Chinese audience.
We are looking forward to making the
upcoming station of “Germany and China
– Moving ahead together” in Guangzhou
with its German Esplanade from 7 th -15 th
November a big success. The event will
definitely signal Germany’s consolidated
interest in partnering with China and
further strengthen the mutually beneficial
exchange between our two countries. The
German Chamber of Commerce • Guangzhou
will, together with its local partners,
take a leading role in the organization of
economic events during this time. Among
other activities, we will organize a conference
on small and medium enterprises
that will focus on business promotion
issues and bilateral development opportunities.
Another example of the activities
planned is a forum on vocational training
which will serve as a platform for the presentation
of Germany’s duale system and
the identification of cooperation opportunities
in South China.
We hope members and friends of the
German Chamber of Commerce will use
the opportunity of this major event series
to visit Guangzhou and look forward to
meeting you at one of the various business
and cultural activities!
Mr. Michael Stein
Chairman of the German Chamber of Commerce in China, Guangzhou
General Manager of Trolli Confectionery Co. Ltd. Guangzhou

Chamber Teams
Join Our Growing
Network
Now at Half Price
Take advantage of our
comprehensive, Chinawide
network of German compa-
nies. Six month memberships
lasting through December
2008 available at half price.
Contact your local Chamber
for details.
Beijing
Ms. Katja Sassi-Bucsit
010 6590-6930
Email: sassi-bucsit.katja@bj.china.ahk.de
Guangzhou
Mr. Kilian Becker
020 9755-8203
becker.kilian@gz.china.ahk.de
Shanghai
Ms. Heidrun Buss
021 5081-2266 ext. 1656
buss.heidrun@sh.china.ahk.de
June October - July - November 2008 | 62008
| 6
Beijing
Guangzhou
Shanghai
Ms. Katja Sassi-Bucsit
Executive Chamber Manager
Tel: 010 6590-6930
Email: sassi-bucsit.katja@bj.china.ahk.de
Ms. Claudia Barkowsky
Regional Manager North China
Tel: 010 6590-0926 ext. 329
Email: barkowsky.claudia@bj.china.ahk.de
Mr. Kilian Becker
Manager Membership & Events
Tel: 020 8755-8203
Fax: 020 8755-1889
Email: becker.kilian@gz.china.ahk.de
Ms. Anna-Lisa Hartmann
Senior Manager Chamber Affairs
Tel: 021 5081-2266 ext. 1630
Fax: 021 5081-2266 ext. 5630
Email: hartmann.anna-lisa@sh.china.ahk.de
Ms. Heidrun Buss
Project & Event Manager Shanghai
Tel: 021 5081-2266 ext. 1656
Fax: 021 5081-2266 ext. 5656
Email: buss.heidrun@sh.china.ahk.de
Ms. Li Yandi
Project Manager
Tel: 021 5081-2266 ext. 1609
Fax: 021 5081-2266 ext. 5609
Email: li.yandi@sh.china.ahk.de
The German Chamber of Commerce in China
Ms. Lina Sun
Chamber Affairs Management
Tel: 010 6590-0926 ext. 210
Email: sun.lina@bj.china.ahk.de
Mr. Walter Jansen
Publications Manager
Tel: 010 6590-0926 ext. 308
Email: jansen.walter@bj.china.ahk.de
Ms. Esther Hu
Chamber Assistant
Tel: 020 8755-2353 ext. 217
Fax: 020 8755-1889
Email: hu.esther@gz.china.ahk.de
Ms. Kristen Robinson
Publications & Marketing Manager
Tel: 021 5081-2266 ext. 1637
Fax: 021 5081-2266 ext. 5637
Email: robinson.kristen@sh.china.ahk.de
Mr. Ferdinand Pillenstein
Regional Manager Zhejiang & Jiangsu Provinces
Tel: 021 5081-2266 ext. 1830
Fax: 021 5081-2266 ext. 5830
Email: pillenstein.ferdinand@sh.china.ahk.de
Ms. Liu Li
Chamber Team Assistant
Tel: 021 5081-2266 ext. 1650
Fax: 021 5081-2266 ext. 5650
Email: liu.li@sh.china.ahk.de

The German Chamber of Commerce in China
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Business Focus
Knocking on the Door of
International Finance
Beijing’s Financial Street brings
banking to a new level in China
Just How International is
Shanghai?
What does the average expat look
like? Where do Germans fit in?
Regional Spotlight:
Yingkou
Yangtze River
Kunming
Chamber News
Beijing
Olympics bring visitors from around
the world, Germany puts best foot
forward throughout the events
Guangzhou
Happy Hour guests warm up for
Oktoberfest
Shanghai
Around Town
Cover Story: Oktoberfest a hit in
China, festivals launched through
the country break record number
of visitors
Beijing
Guangzhou
Shanghai
Members Mix
Meet the Member
Member News:
Beijing
Guangzhou
Shanghai
16
32
63
© Imagine China
10
26
54
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Contents
Community
Olympics
Olympics & Paralympics a great
success for China and Germany
Expo in Brief
Education & Training
Sports
As a martial art, sport, and dance,
Capoiera brings the spirit of Brazil
to China
Health
Environment
China’s wetlands crucial to averting
environmental damage, protection
measures implemented
Giving Back
The 7 th Shanghai Charity Carnival
invites residents to have fun for a
noble cause
New Books
Travel
Experience the famed Balinese culture
– cycling tours offer an
insider’s view
Food & Restaurants
Bakery culture comes to China –
and makes itself at home
Art & Culture
Beijing Embassy elaborately
decorated for Olympics
Special: German History
in Shanghai
Shanghai member finds passports
of Jewish refugees, returns the
memoirs to descendants
City Tour
Qibao an authentic antidote
to Yu Gardens
Chinese Course &
Benefit Program Update
Community Events & Sudoku
Chamber Events Calendar
www.china.ahk.de 7 | October - November 2008
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Business Focus
Chamber Notices
October - November 2008 | 8
ALL CHINA
Membership Directory New Edition!
An indispensable reference, the Membership Directory details
all the contacts of the German Chamber of Commerce in China.
This year’s edition will be released during the month of November.
Each member will receive a complimentary copy; additional
copies may be purchased. Please contact your local Chamber to
place an order.
BEIJING
Celebrate the
Spirit of Flower
Power at the
8 th German Ball
2008!
1 st November 2008 at 6.00pm
Venue: Kempinski Hotel Beijing Lufthansa Center
50 Liangmaqiao Road, Chaoyang District | Tel: 010 6465-3388
Fee: RMB 1090 /1290 member/non-Member
Language: all
Contact: Ms. Miriam Rudolph
Tel: 010 6590-0926 ext. 305
Fax: 010 6590-6313
Email: rudolph.miriam@bj.china.ahk.de
Web: http://china.ahk.de/en/chamber/beijing/events/
upcoming-events
Tickets now on sale - call or email today!
New Chamber Manager
in Beijing
The German Chamber of Commerce
• Beijing welcomes Ms. Katja Sassi-
Bucsit as the Chamber’s new Executive
Manager. She has recently worked in
management positions at the Beijing
Goethe-Institut and at SportsMark
Event Management. Ms. Katrin Loch
has moved on to new challenges in her career. We thank Ms.
Loch for her outstanding service and wish both ladies the best
of luck for the new tasks they face.
The German Chamber of Commerce in China
GUANGZHOU
German Chamber Welcomes New
Consul General
As of 26 th August, Mr. Eberhard
Schuppius is the new Consul General
of Germany in Guangzhou. The
German Chamber of Commerce welcomes
Mr. Schuppius who was previously
stationed as German Ambassador
in Riga, Latvia, before coming
to South China. Guangzhou huanying
nin!
At the same time, the GCC expresses its gratitude to his predecessor,
Mr. Friedrich-Carl Bruns for the excellent cooperation
over the past three years. Bonne chance à Bordeaux!
SHANGHAI
11 th German Ball:
A Night in Black & White
15 th November 2008 at 7.00pm
Venue: Grand Hyatt Shanghai | Jinmao Tower
After the ticket raffle at the September Chamber
Meeting, all tickets have been sold out. Winners
of the tickets should come to the Chamber
office to pick up their tickets. We look forward
to welcoming you to a dazzling night in black
and white this November!
Shanghai IT Day Postponed to 22 nd
October
This fall’s Shanghai IT Day has been moved to 22 nd October. We
hope to see you there for a third successful event in Shanghai!
Please contact Heidrun Buss for more details.

Business Focus
Cover Story
Planning a Grand Future
Standing at the corner of West Beijing’s Financial Street, you might
think you were standing on Wall Street in New York City. Glistening
skyscrapers soar above Beijing’s West Second Ring Road and beyond.
Stylish hotels and boutiques pack modern buildings. Demand for new
office space outruns the pace of construction.
Financial Street, the name of Beijing’s bustling new showpiece, used
to be a place of old alleys and courtyards. Today, it is home to China’s
top financial regulators, the headquarters of domestic financial institutions,
and of more than 500 global financial institutions.
Earlier this year Beijing’s Municipal Government announced its ambition
to become not only a financial hub in Beijing, but also a domestic
and possibly global financial center. As a result the city will put
forth vigorous efforts to become a financial management, information,
and service base.
A Quiet Advance
For a long time, Beijing had defined its role as a political and cultural
locus serving the country. As Shanghai and Shenzhen grew assertive in
their financial goals, Beijing cautiously avoided any “financial center”
designation as such, to avoid criticism of allegedly redundant construction.
The city stayed tight-lipped: “Although Beijing never made
its ambitions known, it has actually risen to become China’s financial
center, and is on solid ground in its drive toward internationalization,”
Li Yang, Director with the Institute of Finance and Banking under
the Chinese Academy of Social Sciences (CASS) told the Beijing Youth
Daily. Zhou Chunsheng, a professor at Cheung Kong Graduate School of
Business, also remarked to the same publication: “As a financial base,
Beijing is unparalleled in access to information and pools of professionals,
and is knocking on the door to be let in by the world’s financial
players.”
The financial sector has been significant in Beijing’s economy. It contributed
12.5% to the city’s total GDP in 2007 - the highest proportion
among Chinese cities. In the first quarter of 2008, the percentage
of Beijing’s tax revenues from the financial sector ballooned to a
dizzying 88.7% over the previous year, surpassing all other industries.
Currently, over 80% of China’s capital goes through Beijing for processing.
Over 80% of China’s banks, insurance companies, and securities
firms are headquartered in Beijing, which boasts the regional
branch offices and research organizations of 293 Fortune 500 enterprises.
Fig. 1 | Beijing vs. Shanghai in 2007
Beijing Shanghai
Financial sector worth RMB 112.63bn Financial sector worth RMB 119.57bn
(USD16.1bn) (USD 17.1bn)
12.5% of GDP 10% of GDP
Home to 677 financial institutions: Home to 604 financial institutions:
234 banks 109 banks
59 securities firms 94 securities firms
117 insurance companies 261 insurance companies
October - November 2008 | 10
The German Chamber of Commerce in China
Beijing – Knocking on the Door of Global Finance
From left to right, Mr. Werner Lauk, at that time German Deputy Chief of mission to China, Mr. Wu
Jian, President of Hua Xia Bank, Dr. Hugo Bänziger, Chief Risk Officer, Member of the Management
Board and the Group Executive Committee at Deutsche Bank, and Mr. Xie Chaobin, Deputy Governor of
Chaoyang District Government with traditional lions at the opening of Deutsche Bank Tower in Beijing
Even more importantly: Beijing is the birthplace of China’s financial
policies, where the Central Bank (People’s Bank of China), China
Banking Regulatory Commission, China Securities Regulatory Commission
and China Insurance Regulatory Commission make their decisions.
“With strained land resources and environmental protection pressures,
Beijing is not ideal for labor-intensive manufacturing, but is perfect
for the high-end service industry. Finance is bound to be a future
pillar of its economy,” added Zhou.
Beijing or Shanghai?
Beijing’s financial commitment has made some other Chinese cities
nervous, especially Shanghai, which has long sought to become an
international financial center.
Some feel Beijing’s rise might blunt the prospects for Shanghai and
dilute China’s competence as a whole. Others argue that Shanghai
will pursue its own dream on the back of a buoyant financial market.
However, neither of the two cities seems capable of overshadowing
the other. (Fig. 1)
Undeniably, the Shanghai Stock Exchange is the beating heart of
Chinese finance, much like the New York Stock Exchange is for the
USA. The Shanghai Gold Exchange and Futures Exchange also add
importance. “In contrast, Beijing is handicapped by lack of an influential
financial platform despite numerous financial institutions,” Qi Bin,
Director of the Research Center under the China Securities Regulatory
Commission said to the 21 st Century Business Herald.
However, Shanghai’s development does not come at Beijing’s expense.
“Shanghai’s development can breathe life into finance in the whole
country, as it will deliver better financial services to institutions in
other locations,” Tu Guangshao, Vice Mayor of Shanghai said at the
Shanghai Lujiazui Forum. Vice Premier Wang Qishan stated he believed
that Shanghai’s financial blueprint would eventually come true as
China’s financial reforms continue.
A Win-Win Game
Many argue that China might need more than one financial center to
drive its domestic economy. “Shenzhen and Hong Kong will become
the financial powerhouses for South China, and Shanghai drives the
development of East China. As China’s financial control center, Beijing
will extend financial support to northern areas as well,” Niu Fengrui, a

The German Chamber of Commerce in China
researcher with the CASS, told the 21 st Century Business Herald. “Each
financial center has different positioning, leaving the opportunity for
cooperation. Given implementation of a full-fledged market economy,
competition can optimize the efficiency of resource allocation,” added
Niu. The USA also has multiple financial centers: New York leads the
world in stock and energy futures, while Chicago is recognized as the
global financial derivatives trading center.
The Road Ahead
Beijing has obviously sensed its opportunity. Working closely with
Tianjin, which aims to set up China’s first over-the-counter stock
exchange, it is pursuing pilot funding programs to help small and
medium-sized enterprise startups. A private equity fund council will
also be created.
Meanwhile, Beijing’s three economic pillars - Financial Street, the
Central Business District, where Beijing’s 2 nd financial district is now
growing promoted by the Chaoyang District Government, and the
Zhongguancun Science Park - will continue to expand, adding to Beijing’s
financial strength.
Beijing is increasingly unleashing its financial potential by stepping
up favorable policies. CITIC Securities told the 21 st Century Business
Herald it has decided to relocate its headquarters from Shenzhen back
to Beijing. Additional fund management companies are also reportedly
considering the move.
Nevertheless, markets should not be underestimated in creating a financial
center. Philadelphia was originally the financial center of the USA,
Cover Story
but was gradually replaced by New York. “It’s the markets that call the
shots on where the financial center will be, not the government,” Zhou
Ziheng, a researcher with the CASS told Beijing Youth Daily. Zhou also
pointed out that China should not rush to create a financial center
based on immature markets and cautioned that China’s financial security
could easily become vulnerable to foreign speculators.
Finance Experts on Banking in Beijing
Mr. Lee Zhang, Chairman of Deutsche Bank China: “The
opening of Deutsche Bank Tower in Beijing is a result of concerted
support from the regulators in China, the municipal government
of Beijing, and the Chaoyang District Government, who
have provided excellent infrastructure and a favorable business
environment for Deutsche Bank China to thrive.”
Mr. Michael M. Reichel, General Manager, Commerzbank
Shanghai Branch: “After opening a branch in Hong Kong (1979)
and in Shanghai (1994) as well as being the first German bank
with a representative office in Beijing (1981), we are currently
preparing to open a further branch in Tianjin. Commerzbank
China offers SMEs as well as multinationals commercial banking
products and solutions that meet their needs. We are their creative
“relationship bank.”
Chris Devonshire-Ellis | Senior Partner - Dezan Shira & Associates
Email: info@dezshira.com | Web: www.dezshira.com
www.china.ahk.de 11 | October - November 2008
Business Focus

Business Focus
Sino - German Business
October - November 2008 | 12
The German Chamber of Commerce in China
Just How International is Shanghai?
Shanghai has been home to residents from a wide variety of cultures
and ethnic backgrounds over the last 170 years. In fact, looking at the
cityscape, you could say many areas were built by expatriates. Over
the years, relatively accurate records have been kept on the numbers
and nationalities that have called Shanghai ‘home’ - right down to the
last Albanian. Yet, at no point in the last 100 years has this number
been as difficult to pinpoint as today.
If one thing is certain, it’s that Germans have played an important part
within China’s expatriate community, particularly in Shanghai. In fact,
it’s widely acknowledged that Germans and Americans outnumber all
non-Asian expats. This is no surprise, when you consider that Germany
is China’s largest economic and trade partner in Europe, or that many of
the largest German investors in Asia are based in Shanghai.
Immigration Over the Years
1865 - Out of total 2,235 international residents, 175 were German
1915 - The foreign settlement and concession area housed 20,924 foreigners
– predominantly British merchants, missionaries and physicians.
The number of Germans had increased to 1,425.
1925 - Census revealed there were nearly 30,000 foreign residents, consisting
3.5% of the population. While the Japanese made up the largest
group, the German population was rapidly increasing.
1930 - The German expatriate community outnumbered the French, at
1,430 residents throughout the International Settlement, external roads
and French Concession.
1934 - Shanghai was the world’s 6th largest city, with a foreign population
of 70,000. Most were Japanese or Russian, but Germans still outnumbered
the French.
1942 - Shanghai’s pre-1949 foreign population peaked at 150,931.
Snapshot of a City’s Growth
In the early census days, a complete breakdown of the nationalities
was available. However, today the situation is no longer clear, with a
number of different authorities responsible for keeping records. These
include the Shanghai Municipal Labor Bureau, the Public Security
Bureau as well as the various foreign Consulates. While in the 1930s
foreigners required neither visas nor passports to enter Shanghai,
today’s complicated requirements span a wide range of visas and residence
permits.
Resident Status
The F visa also known as a business visa is the case which causes the
most confusion. Some ‘F’ visas holders visit China strictly to conduct
business for a short period of time. They stay in hotels and don’t stray
much beyond the Bund, Pudong and Yuyuan Gardens. Others remain
here a little longer, and extend their stay a few times until they count
essentially as residents, but how many of these cases are there? How
have recent visa changes affected this group? The answer is uncertain.
According to the Shanghai Municipal Statistics Bureau, by late 2006,
Shanghai’s total population (not including itinerant or migrant residents)
had grown to 18m. According to the Municipal Labor and
Security Bureau, legally registered international residents numbered
Fig. 1
Japan 30% 29,326
America 13% 15,877
South Korea 12% 17,020
Singapore 6% 6,336
Germany 5% 5,636
France 4% 5,437
Canada 4% 4,572
Australia 3% 3,927
Malaysia 3% 4,097
UK 3% 3,725
Other 17% 23,923
119,876, constituting around 0.7%
of the total population, and more
than 50% of China’s total international
population.
In mid 2006, the Shanghai Municipal
Labor and Social Security
Bureau announced there were
51,000 foreigners working in
Shanghai. (Fig.1)
As these statistics reveal, ‘Western’
expatriates constituted a mere 32%
of the international community in
Shanghai. Regional expats from Japan, Korea, Singapore and Malaysia
made up 52%. There were also a further 20,000 permit holders from
Hong Kong, Taiwan and Macau listed as permanent residents.
If you include those working in China without a work permit (usually
living here on an F visa), estimates of the total number vary greatly
and rise to as high as 600,000 but this is an impossible number to
validate. Since 2004, annual increases have been between 25-35%.
Apparently, the long-term goal of the Shanghai Municipal Government
is to establish an international community that constitutes 5% of the
city’s total population. The question, nervously being asked by expatriates
and other foreign residents, is will the gates be shut once that
goal is reached? Recently, a tightening of F visa regulations has been
one indicator.
Germany in Shanghai
1872 - C. Melchers & Co. enters Shanghai
1885 - German Consulate General built
1886 - First German business delegation in Shanghai
1914 - German School of Engineering built at the Tongji University
1929 - German Cultural Center established in Shanghai consisting of
the German Community Center, the Kaiser Wilhelm School and the new
German Protestant Church
1972 - Germany established official diplomatic ties with the People’s
Republic of China
1984 - German Business Association is founded with 13 members
1986 - Hamburg and Shanghai become sister cities
2000 - Trade volume between Shanghai and Germany totals USD3.6 bn
2001 - China attracted direct investment from 1,600 German companies,
650 of which had set up their joint ventures or representative offices in
Shanghai.
Second Generation Expats
The majority of Shanghai’s international population consist of the
employees of multinational corporations and their families. Over the
last 3 years, the number of expatriate children has risen by more than
30%, an increasing number of which were born in Shanghai and know
no other home than China.
As the number of children increases, so do the education resources
and schools that cater to them. The German School Shanghai was

The German Chamber of Commerce in China
Fig. 2
established in 1995 to cater to German students. As the largest
German school in China, it is now responsible for 850 students, from
kindergarten to the Abitur. (Fig.2)
Becoming a World Class City
So where do all these foreigners fit in to Shanghai’s plans to become
a world class city? Most metropolitan, international cities have an
average of 4.3% expatriate residents. According to official statistics,
Shanghai’s foreign population has yet to reach even half of this figure
and recent changes to visa application procedures make it difficult to
predict when that figure will be reached.
History reveals that Shanghai was most definitely a global city prior
to WWII, particularly in the 1930s. Where does it stand today? The
Globalization and World Cities Study Group and Network (GaWC) provides
a categorization and ranking system of world cities. The top
four cities in the world are widely acknowledged as London, New York,
Paris and Tokyo.
Sino - German Business
In the categorization and ranking of world cities, GaWC assessed
major world cities based on “advanced producer services” provided by
international corporations, such as accountancy, advertising, finance
and law. They defined Shanghai as a ‘minor global city’ in 1999, on
par with Singapore and Hong Kong, which attracted large foreign businesses
and a related expatriate community. Since then, Shanghai has
become the regional and corporate headquarters for more than 500
multinational companies.
In March this year, the Shanghai Personnel Bureau stated that the city
now has 70,000 expatriates, with another 70,000-plus returned overseas
Chinese also working in the city. While Shanghai may not be a
world class city yet, it definitely has potential.
The Average Expat
• 67% of international residents granted work permits hold mid-level or
senior management positions in foreign invested enterprises, while
only 14% work for domestic firms.
• 90% have university degrees.
• Expatriate staff hired on the ground in China represent more than 50%
of all international residents, compared with only 26% in 2005.
• Over half are employed in the service sector
Source: Shanghai Municipal Labor and Social Security Bureau
Laura Mitchelson is Strategic Director of Amber, a Shanghaibased
consultancy specializing in market and competitive intelligence
and business analysis in China.
Laura Mitchelson | Email: lmitchelson@amberinsights.com
www.china.ahk.de 13 | October - November 2008
Business Focus

Business Focus
Yingkou - North China
October - November 2008 | 14
Yingkou
Province: Liaoning
Population: 2.3m
Area: 5,402km²
Coastline: 96km
Geography
Yingkou is a coastal city on the
east bank of Bohai Bay, where one
of the largest rivers in China, the
Liaohe, empties into the Bohai
Sea. The city is equidistant from
Shenyang and Dalian, located roughly 170km away from each.
Infrastructure
• The Port of Yingkou is an international seaport consisting of three
separate dockland areas: Yingkou Old Port at the mouth of the
Liaohe River, Bayuquan Port, and Xianren Island Energy & Chemical
Industry Port on the Bohai Sea. Xianren Port is still under construction.
• Yingkou is the second-largest port in northeastern China (after
Dalian) and is one of China’s 14 key national ports. It has 31 berths,
of which 19 exceed 10,000-ton capacity. In 2007, the port achieved
a record volume of 120m tons, 27% higher than the 2006 volume.
The aim is an annual throughput of 200m tons by 2010. The operator,
Yingkou Port Group, is seeking a listing on the stock exchange.
• The Shenda Expressway, a 400km expressway that connects the
provincial capital Shenyang with the famous harbor city Dalian,
passes through Yingkou. Built between 1984 and 1990, it lays claim
to being the first expressway in mainland China. Originally, it had 4
lanes but was rebuilt recently as an 8-lane configuration.
• Two railways run through Yingkou: the Changchun-Dalian Railway,
and the Harbin-Dalian Railway, which mainly transports coal, oil,
agricultural products and wood. A new Harbin-Dalian railway is
under construction, scheduled to open in 2013.
• Shenyang and Dalian International Airports are easily accessible
from Yingkou, each about a 90min drive away. Yingkou does not
have its own airport, but plans for one exist.
Industry
GDP was RMB 5.68bn in 2007, ranking 4th in Liaoning Province
behind Shenyang, Dalian and Anshan.
The main industries in Yingkou include: metallurgy, magnesia materials,
petrochemical, equipment manufacturing, textile and paper. More
than 680 foreign-invested enterprises have settled in Yingkou, among
them four from Germany.
Natural resources in Yingkou are rich and of high quality. More than
30 kinds of metal and non-metal minerals have been verified. Magnesite
reserves rank first in the world, while talcum and boron rank first
in China. This makes Yingkou an ideal location for the sourcing of raw
materials.
Two of China’s biggest steel mills have projects in Yingkou: Angang
Steel Corporation has a major mill, with a capacity of over 10m tons,
The German Chamber of Commerce in China
including a 5m-wide steel plate mill. The Minmetals Yingkou Medium
Plate extension project with a total investment of RMB 4.72bn, and a
planned annual production of 1.5m tons, is under construction.
Yingkou is adjacent to the Liaohe oil field, the third largest in China.
The surroundings have rich oil and natural gas deposits, and refined
oil and gas can be transferred to Yingkou’s port through two pipelines.
Development Zones
Yingkou Economic & Technological Development Zone (YK-ETDZ) is a
national economic and technical development zone in Bayuquan District
in the south of Yingkou city, approved by the State Council in
1992. Of a planned 145km², 30km² are currently developed.
Power is supplied by Huaneng Yingkou Power Plant, one of the state’s
key projects during the 8 th Five-Year Plan. It has a capacity of 1,840MW,
which will be expanded to 3,000MW by 2010.
The Liaoning (Yingkou) Coastal Industrial Base is an important part of
the development strategy of the Bohai Rim Economic Circle and the
revitalization of the old industrial base in Northeast China. The development
of this region is strongly supported by the Central Government
and Liaoning’s Provincial Government.
The Yingkou Coastal Industrial Base is located between Yingkou’s
downtown and Bayuquan Port. The planned area of 120km² will be
developed in 3 phases. It includes an industrial area, with special
zones for different industries, and an urban area. Until 2010, industrial
clusters will be formed in equipment manufacturing, electronic
communication technology, fine chemicals and modern logistics.
Yizhou Fossil & Geology Park
In 2004, a farmer from Yixian County near Jinzhou, Liaoning,
accidentally discovered the remains of a beautifully preserved
dinosaur, later identified as a Jinzhousaurus. German veterinarian,
Dr. Burkhard Pohl, whose passion for dinosaurs is internationally
known (Wyoming Dinosaur Center & Dig Site), heard the
news and came to Liaoning just weeks after the discovery. Pohl
and his team created the first joint venture company of its kind
in China with the local government and Liaoning provincial government.
With a 51% stake for the German side, the Sino-German
Yizhou Fossil & Geology Park was born.
The museum also became the first environmentally-friendly
museum in China. 2,000 trees of local species were planted in
the park, recyclable and non toxic materials were used for the
museum’s construction, energy needs are covered by solar and
wind power, and a 100% recycling program was put in place for
all of the museum’s wastes.
The collection from China and around the world ranges from the
world’s oldest mammals to the largest turtle ever found (a giant
4.5m Archelon - the only specimen in China).
Mr. Damien Leloup | Mob: 13521649494 | Museum office: 0416
7575-088

The German Chamber of Commerce in China
www.china.ahk.de 15 | October - November 2008
Business Focus

Business Focus
Kunming - South China
Kunming
A Pearl in China’s Southwest
This city of 6.2m is the capital of China’s southwestern province,
Yunnan, which borders Laos, Vietnam and Myanmar. Many Chinese
refer to it as the “Spring City” thanks to its temperate climate, which
is free from bitter cold winters and scoring hot summers. The city is
situated in the center of Yunnan province next to Lake Dian which
is one of the biggest freshwater lakes of Asia, at a height of almost
1900m.
Tourism Hub
For many tourists, Kunming serves as the starting point for visiting
towns such as Dali or Lijiang with their picturesque buildings and
beautiful scenery reminiscent of the fictional paradise Shangri-La.
Although Dali and Lijiang are far away from Kunming in the western
part of the province, there are numerous tourist attractions within a
15km radius of the city, such as the Bamboo Temple or the Golden
Temple. Very famous is the Stone Forest some 120km away from
Kunming. Shilin, as it is called in Chinese, is a massive collection of
grey limestone pillars weathered by wind and rain reaching up to 30m
in height.
In the northwest corner of the city lies Cuihu, or Green Lake Park. The
tranquil lake surrounded by greenery is home to the statue of one of
China’s most famous composers, Nie Er, who wrote the national anthem
of the People’s Republic, “The March of the Volunteers.” Nie died at age
23 when he fled from the national troops of Chiang Kai-shek.
Cultural Diversity
Minorities make up one third of the total population in Yunnan. When
Mongol forces under Kublai Khan entered China on horseback in the
13 th century, they brought their culture with them. Even today there
is a sizeable Muslim (Hui) population of 150,000 in the city whose
October - November 2008 | 16
The German Chamber of Commerce in China
ancestors may have been part of the
Mongol army or the builders, craftsmen
and traders that followed them.
More prominent in Kunming are only
the Yi, with a population of 400,000.
Overall there are 24 minorities living
in the city which is almost half the
total number of minorities in China.
Industry
As for Kunming’s economy, the city
is blessed with vast natural resources
like copper, lead, and zinc that led
to the foundation of big enterprises
like the Yunnan Copper Group, the
Kunming Iron & Steel Company, and
Yunnan Metallurgical Group. Around
the city you will find one of the
largest salt and phosphate mines in
China.
Kunming is also a center for agricultural
products and horticulture. It is
the largest flower export base in Asia with many Dutch experts having
transferred knowledge and technology to the area. The tobacco industry
is very strong as well, and famous national brands such as Hongta
and Honghe have their headquarters here.
Rounding out its economic base, a sizeable chemical industry focuses
on fertilizers as well as plastics, cement, and textiles.
Infrastructure Development
Two years ago, the Chinese government approved the construction
of an almost 3,000km-long oil pipeline from the port of Sittwe in
Myanmar to Kunming. This will not only shorten oil transportation
from Africa and the Middle East to the energy hungry industries in
China by two weeks, but will also see associated industries such as
the petrochemical industry expand. As part of the ambitious Asian
highway program, construction of the 264km-long Hanoi – Kunming
highway has begun. From Kunming, traders will have direct access to
Vietnam’s ports of Hai Phong and Cai Lan. The transportation network
will integrate both markets and spur economic growth.
Society & Standard of Living
According to official statistics the living standard of Kunming’s population
has risen continuously as real wages have increased. However,
despite two high-tech development zones, the Kunming High-tech
Industrial Development Zone and the Kunming Economic and Technology
Development Zone, the city still lags behind other big Chinese
cities in this regard.
Nevertheless, major retailers are turning more and more attention
to the city, and it is one of China’s most promising second-tier
retail markets. Over the past few years, many well known foreign
retailers have opened up business here with supermarkets and
convenience stores as well as luxury brands taking root. This is
clearly a sign that as competition along the eastern coast becomes
increasingly fierce, China’s inner provinces will receive more and
more attention.

The German Chamber of Commerce in China
www.china.ahk.de 17 | October - November 2008
Business Focus

Business Focus
Yangtze River - East China
Yangtze River
Gateway to China’s Interior
Already the world’s largest cargo-carrying river, the Yangtze will soon
offer year-round shipping for barge fleets of up to 10,000dwt between
Chongqing and Shanghai. By summer 2009, when the Three Gorges
Dam project is completed, the average river journey between the two
cities will be halved to no more than 7 days. Currently, a non-stop
container service exists that takes as little as 5 days. As companies
expand domestically, accessing China’s interior will become crucial not
only for sourcing, but also for delivering to customers.
Connecting Shanghai to Chongqing
To support an anticipated surge in shipping activity, the river’s major
ports are being expanded and modernized. Chongqing, for example,
which is located further upstream than any other significant port on
the Yangtze, is building a new container terminal 6km from the city
center. Named Cuntan Terminal, it will be the largest and most modern
container terminal on the upper Yangtze upon completion in 2009.
Large sums of money are being spent to build a Riverside Expressway,
a Riverside Highway and a Riverside Railway - all connecting Shanghai
to Chongqing, running parallel to the Yangtze. The Riverside Expressway,
due to be operational by the end of 2010, will cut the journey
time by car between the two municipalities to around 24 hours. It
will complement the 2,500km Riverside Highway, which currently has
a section between Wanzhou (Chongqing) and Yichang in (Hubei) that
is a particular bottleneck due to its state of repair. It currently takes
around 14 hours to cover the 560km stretch. The Riverside Railway
project will cost RMB 20bn and is scheduled to be completed by 2010.
Investing in the Interior
The question that all these initiatives pose
for foreign companies in China is to what
extent will they make inland cities more
viable destinations for direct investment?
October - November 2008 | 18
The German Chamber of Commerce in China
In the research for the book Yangtze Transport
2008: Accessing China’s Interior scores of manufacturers
with existing plants in major port
cities from Jiangsu to Sichuan were interviewed.
The way they are coping with the logistical challenges
of getting components in and finished
goods out in a timely and safe manner, are
instructive for other foreign investors that may
be looking to the interior in the face of higher
costs along the coast.
Distribution Channels Still
Problematic
While it remains true that that the logistics
problems facing FIEs in the interior are greater
than those found near the coast, many have
been able to successfully adapt their operations
and thereby maintain reasonably high levels of
efficiency.
Just outside Shanghai, in Taicang, Weiss-Voetsch runs a whollyowned
environmental testing instruments plant. A little over half
of the company’s output is sold in China. Since its domestic clients
are spread across the country, all its products are delivered by truck.
In the past the company experienced problems with domestic trucking
companies, due to poor protection from the elements and a
lack of proper loading and unloading equipment. Consequently, the
company is now paying a little extra to ensure that there is no intermediate
handling. Trucks are loaded by Weiss-Voertsch’s staff and
taken directly to the client.
Weiss-Voetsch exports slightly less than half its total output. The
quality of roads between Taicang and Shanghai is good and the port
is efficient in handling cargo, so few problems have been experienced
in this area. In urgent cases, the company air freights products overseas
via Pudong Airport. However, this is not a straightforward process
due to the heavy weight of the products. Loading can take so much
time to arrange that in the in end it is sometimes just as quick to sea
freight cargo bound for Asian markets such as South Korea.
Auto parts manufacturer ThyssenKrupp Tailored Blanks operates a wholly
foreign-owned plant in Wuhan. Between 2005 and 2006, the company
shipped its finished products by container via the Yangtze to Chongqing
and Shanghai. However, the long barge journeys were not conducive to
supplying its auto assembly customers, which operate on a just-in-time
basis. Furthermore, a 7-day journey by river can be covered by truck in
just 24 hours. River transport requires significant additional investment
in the steel pallets on which the products are loaded, since it takes
much longer for the pallets to be returned to the plant.
Short lead times are a vital competitive advantage in the many
sectors. In future, ThyssenKrupp may use the strategy of building
additional facilities in China so as to be even closer to its clients. To
serve major auto assembly plants in the leading cities, it uses subcontractors
for warehousing and just-in-time deliveries.
David Lammie | Editor - Yangtze Transport Business Services Ltd. | Tel: +44 20 8874-3217
Email: dl@YangtzeBusinessServices.com | Web: www.YangtzeBusinessServices.com