BEIJING, April 19, 2024 /PRNewswire/ — A report from People’s Daily: The number of German companies in Taicang, east China’s Jiangsu province reached 500 as Beumer Group settled there earlier this year.
During the past three decades, Taicang has consistently seized business opportunities with the German companies based there and created an optimal business environment for them and its successes have been recognized by the authorities in both countries.
In November 2008, Taicang was named a “Sino-German Enterprise Cooperation Base” by China’s Ministry of Commerce and by Germany’s Federal Ministry for Economic Cooperation and Development and remains the only city to be recognized that way by both sides.
Why can this county-level city attract numerous German companies to settle and thrive there?
The sound business environment and professional services that Taicang offers are one of the secrets to the city’s appeal. “Meticulous government services” and “unimpeded communication between the government and enterprises” are the most frequently mentioned terms by German enterprises in Taicang when they speak of the city’s business climate.
Jan Assmann, general manager of the Taicang company of Bernstein, a leading supplier of industrial safety and enclosure technology from Germany, has been living in Taicang for nearly 20 years. He told People’s Daily that the government of Taicang has provided abundant favorable policies for German enterprises and the business environment there is getting better and better.
He believes German companies flocking to Taicang has created a cluster effect. For example, automotive parts manufacturers settling in the city have attracted machine tool manufacturers, which then attracted mold manufacturers. In this way, Taicang has gradually established an industrial chain and supply chain centered around automotive parts and machine tools, Assmann said.
The German Center Taicang was set up in the city in 2016, which provides one-stop business services for nearly 50 enterprises including those from Germany.
“We were attracted by Taicang’s excellent business environment and the professional services provided by the government,” said general manager of the center Marieke Bossek.
According to Bossek, Taicang High-tech Industrial Development Zone has assigned a service specialist to every German enterprise, who the enterprises can turn to for assistance whenever they encounter difficulties or challenges.
“This efficient service has left a deep impression on me,” she said.
In recent years, German companies in Taicang have strengthened their localization strategies, which not only advanced their own development, but also helped with the standardized and massive production of local enterprises. The rapid development of local suppliers has helped German companies reduce production costs and improve supply chain efficiency.
Chiron Group, a leading manufacturer of high-speed CNC machine tools, is considered an “hidden champion” in this industry. The group set up a factory in Taicang in 2012 and later moved its China headquarters to the city, said Willi Riester, chief technology officer of Chiron Machine Tool (Taicang) Co., Ltd.
“Our machine tools require extremely high precision, and it is essential to maintain close communication with both upstream and downstream customers. Thanks to the cluster effect of the China–Germany industrial parks in Taicang, the supply chain here is stable, allowing us to conveniently and swiftly obtain high-quality components,” Riester said.
Currently, over half of the German companies in Taicang place R&D locally, and over 90 percent of the early settlers have completed capital increases and expanded production. The average output value per mu (about 667 square meters) of German companies has reached 14 million yuan ($1.93 million).
At the end of 2023, the New Energy Phase II Factory of a manufacturing base of German manufacturer of rolling element bearings Schaeffler Group was officially inaugurated.
Matthias Zink, CEO Automotive Technologies of Schaeffler Group, noted that the group has expanded its investment in Taicang 13 times, which totaled over 11 billion yuan. Taicang has become one of the group’s largest manufacturing bases globally, Zink added.
Over the past 30 years of cooperation with Germany, the local government of Taicang has paid more and more emphasis to the exchange between Chinese and German cultures, providing a comfortable, well-built, and convenient business and living environment for German companies and their employees.
For instance, Taicang has built a Rothenburg Street, where German bakeries and restaurants can be found almost everywhere.
“The cityscape of Taicang is constantly improving, and the environment has become more beautiful,” Assmann said. “When I’m free, I often take a stroll with my family along the Haiyundi Road and the Rothenburg Street.”
Taicang also hosts events such as beer festivals, marathon races, Sino-German artist salons, and Sino-German table tennis tournaments on a regular basis. It has built service facilities like a Sino-German friendship kindergarten, attracting an increasing number of Germans to settle there.
A series of policies that China released recently have signaled the country’s determination to expand high-level opening-up. It has rolled out five new measures to simplify the process for foreign nationals seeking to visit China, revised the national version of negative list for foreign investment, and lifted all restrictions on foreign investment access to manufacturing.
It also put forward 24 specific measures to further optimize the foreign investment environment and intensify efforts to attract investment, and made continuous efforts to build a market-oriented and world-class business environment governed by a sound legal framework. These efforts are welcomed by German companies in China.
A recent report released by the German Institute for Economic Research showed that direct investment from Germany to China increased by 4.3 percent in 2023, reaching a record high of 11.9 billion euros ($12.79 billion).
Another report released by the German Chamber of Commerce in China earlier this year highlighted that over 90 percent of surveyed companies plan to continue their business operations in China, with 54 percent of them intending to increase their investments in the country.
“Since settling in Taicang in 2004, OASE has seen a continuous increase in actual investment,” said Shen Ya, general manager of Oase Living Water (Taicang) Co., Ltd.
“Over the past three years, our business has grown at an average annual speed of 30 percent. In the future, the group will continue to seize opportunities in China, increase investment in China, and deepen our presence in the Chinese market,” Shen added.
“China’s commitment to expanding high-level opening-up has strong appeal to foreign-invested enterprises. As global economic recovery remains sluggish, China’s economy has shown a positive growth momentum. We hope that more German companies can seize the opportunity and continue to invest in China,” Assmann said.
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Since 2020, North Carolina has announced more than 67,000 new jobs and $42.3 billion of capital investment, according to the N.C. Department of Commerce. During that same period, ElectriCities has tracked significant growth in North Carolina public power communities, including more than 8,500 new jobs and investment of more than $3.4 billion. We sat down with three North Carolina-based industrial site consultants to get their take on what’s driving the state’s recent investment boom and what they’re hearing from clients about continued economic expansion.
Our experts may not agree on the best barbecue style (more on that later), but there’s consensus about what makes North Carolina a top state for business. Factors like the state’s central location, educated and ready workforce, favorable tax climate, and low cost of doing business top the list.
“I don’t think you can overstate being centrally located on the East Coast and how important that is to an industrial user who’s thinking about how they maximize their reach to their customer base,” said Steven Pearce, Vice President of Infrastructure and Economic Development at McGuireWoods Consulting.
Jenae Valentine, Location Analysis and Incentives Manager with Maxis Advisors, said population migration and quality of life are important drivers for many of her clients, as these factors are positive indicators of growth.
“North Carolina has so many assets and resources that have been developed over decades — all the ingredients are here.”
— Benton Blaine, Managing Director,
Cushman & Wakefield
Benton Blaine, Managing Director at Cushman & Wakefield, touted the state’s great interstate system and robust electrical infrastructure. “North Carolina has so many assets and resources that have been developed over decades—all the ingredients are here,” he said.
While projects related to EVs and batteries, including manufacturing, material processing, and recycling, are ongoing and still being sited, all three experts expressed concern about what may happen once the influx of federal funding stops.
“I don’t have a crystal ball, but I think we’ll see fewer and smaller EV and battery projects when federal dollars aren’t there to support them,” Pearce said.
Blaine said he expects to see a more diversified market, including lower-tier suppliers in EV, as well as manufacturing projects in solar, transformers, food, and life science.
When it comes to electric service, top considerations are reliability and cost, our experts said. Clients also want to know the source of their electricity and how much of the mix is renewable.
Valentine said, “My clients want to understand an electric provider’s ability to meet their ramp-up schedule so that when they’re ready to become fully operational, they’ll have the power needed to support their manufacturing operations.”
Knowing power is available is trickier these days.
“Up until 2019, my largest project was 11 megawatts, and that was a big project. Now I have a 150, a 100, an 80, two 60s, and a 40,” Blaine said. “We’re talking about projects that need to use a measurable portion of an entire power plant.”
Part of the fun of site selection in North Carolina is watching trend lines to forecast continued industrial growth.
Along with watching what he calls the natural progression of the EV supply chain, Blaine hopes we’ll see incentives for workforce training that supports current and future technology.
Pearce is watching the impact of the uncertainty that often comes with election years and current geopolitical movement. Since higher interest rates impact investment, he’s hopeful they’ll drop this year. He’s also watching population growth—or lack of it, based on recent data.
Along with all that, Valentine said she’s keeping an eye on construction costs, industrial lease rates, industrial vacancy, and job reports.
Whatever the future brings, it’s clear that each of these industrial site selection consultants appreciates what our state has to offer and that each enjoys calling North Carolina home.
They do not, however, enjoy the same style of North Carolina barbecue. Blaine and Valentine share an affinity for Lexington-style, while Pearce prefers Eastern-style. When it comes to the ’cue, let’s just agree to disagree.