Plenty of Potential for German Business in China
Last week, nearly 80 people attended the event “China’s Potential for German Mid-Market Companies: Fact or Fiction?” organised jointly by Fiducia Management Consultants, Unicredit Bank, and Reutlinger Wirtschaftstreuhand (RWT) in Reutlingen, Germany.
In his opening speech, RWT’s CEO Siegbert Dierberger highlighted Germany’s continuously strong economic presence in China. Katharina Herzog, a Tax Advisor at RWT Horwath Global, moderated a discussion about how businesses from Southern Germany have operated successfully in China for years, especially in the automotive and mechanical engineering industries. A diverse panel of experienced speakers touched on recipes for success in China: Thaddaeus Mueller from Fiducia Management Consultants, Wolfgang Kirschning of RWT Horwarth GmbH, Juergen Lutz of Hypo Vereinsbank, Michael Rampf of Rampf Holding GmbH & Co. KG (Grafenberg), and Juergen Voehringer of Voehringer GmbH (Trochtelfingen).
While topics such as trading, taxes, profit transfers, and accounting continue to occupy the minds of German managers, there are growing concerns especially when it comes to finding the right talent in China. The speakers discussed the importance of innovative recruiting practices, which are necessary to put together an experienced team. When it comes to retaining ambitious Chinese employees, offering a clear career path and training opportunities to develop professionally are more attractive than salary increases.
Managers are most concerned about China’s size and fast changing market. Thaddaeus Mueller of Fiducia highlighted that while lower growth rates are a main characteristic of China’s “New Normal”, the government plans to double the average citizen’s income by 2020. China wants to shift its focus from heavy industry to services and develop a consumer society. In the next 5 years, innovation and science will play a greater role, urbanisation and green technology will be in high demand, and medical technology will profit from China’s current demographic changes, explained Mueller further.
Wolfgang Kirschning addressed China’s recent VAT reform, as well as the new Double Taxation Agreement (DTA), effective in 2017. China is still Germany’s most important trading partner outside of the EU and so businesses from the Neckar Alb region are optimistic about their business activities in the Middle Kingdom. Their motto: ”we will continue to expand our business to be part of China’s growth story!”
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