Wednesday 19 January 2011

China vs German: Clash of Exporting Giants

“I am expecting a massive attack from China in Europe in the next few years – particularly in the machinery sector,” says Franz Fehrenbach, chief executive of Bosch, the world’s largest maker of car parts and Germany’s largest privately held industrial group by sales. “The Chinese will improve their quality and technology, but they will at the same time be extremely price-attractive.”

In areas that include not only solar panels but also wind energy, telecommunications networks, power transmission and high-speed trains, Chinese companies are already on a par with their western counterparts, often after “re-innovating” technology sucked out of joint ventures. In other areas, such as construction machinery, machine tools, cars and electrical engineering, companies from Sany in construction equipment to Shanghai Electric in power systems are gearing up to compete.

As the race between the world’s largest exporting nations gathers pace, what steps is German industry taking to fend off the greatest threat it has faced since the rise of corporate Japan in the 1960s and 1970s?

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