Germany seeking new partners in Asia
The following article is based on a report from a visit to Germany by 11 Asian journalists including one from The Jakarta Post.
By Oei Eng Goan
HAMBURG, Germany (JP): Although markets of preference for most German enterprises are member countries of the European Union, German companies could not but turn their keen eyes on the huge potential and business opportunities Asia offers.
More than 10 percent of total German exports are absorbed by Asian countries, and the Bonn government has put greater emphasis on the growing importance of countries in this most populous continent since it adopted a new policy on Asia in early 1994.
"As an export-dependent nation, we must be involved in Asia's dynamic markets through trade and investments. Economic rivalry with Asia and our response to the region's economic power and success are a major test for our business community's ability and for government policy," Chancellor Helmut Kohl said in 1993 after visiting India, Singapore, Indonesia, Japan and South Korea.
Kohl's visit was followed by a conference of German ambassadors stationed in the Asia-Pacific region in 1994. The conference, held in Bonn and concluded with a 10-point "Concept on Asia", aims at forging closer ties in all spheres with Asian countries, particularly with the seven-member countries of the Association of Southeast Asian Nations (ASEAN).
And the new policy bore fruit.
"For the first time, in 1994, Germany enjoyed a small surplus of around DM 328 million in its trade with ASEAN," an official of the Federal Ministry of Economics told The Jakarta Post last month.
Data from the ministry shows that German exports to ASEAN countries last year totaled DM 20.56 billion (US$13.90 billion) against imports of DM 17.18 billion, giving Germany a surplus of DM 3.38 billion, 10 times greater than it was in 1994.
Excluding ASEAN, Germany's total exports to Asia last year increased by 8.4 percent to DM 57.50 billion from 53.06 billion in 1994. Its Asian imports also increased to DM 76 billion in 1995 from 73.30 billion the year before.
Obviously, the German business community has responded deftly to Kohl's challenges. Germany's enthusiasm for Asian markets and trade partners, however, have upset other countries outside Asia.
"We are blamed, from time to time, by Africa and Latin America that we do not concentrate that much (on their regions) as we do on the Asia-Pacific region," Jurgen Staks, head of the Federal Foreign Office's Southeast Asia office, told the Post last month.
As a result of their aggressive business campaign, a number of German enterprises have won major contracts in Asia as well as found partners for joint ventures.
Reimelt, an engineering and construction company, has built part of the Mayora plant, an Indonesian biscuit factory in Tangerang, some 25 kilometers west of Jakarta. A privately-owned enterprise, Reimelt also supplies spare parts and flour silos for food processing plants worldwide.
According to Reimelt's marketing executive, Gunter Holle, the company is also negotiating with Indofood, a large corporation owned by Indonesian business tycoon Sudono Salim, for the construction of an integrated food processing plant in Indonesia.
Jakarta, meanwhile, has accorded a contract worth more than DM 500 million to Germany's Siemens to build a telecommunications network in eastern Indonesia, according to the latest news report.
Apart from this, Germany's integrated transportation company, ADtranz, which was set up in January of this year after a merger between AEG and ABB Daimler-Benz, will supply an automated light- rail system to Singapore and Malaysia, electric locomotives to India, and has established its first joint venture in China where some 8,100 kilometers of new track will be built up to the year 2000.
Behind this success story, however, the Bonn government also seeks and encourages foreign investors to join its ventures in developing eastern Germany.
As Chancellor Kohl put it: "Investments should not be heading only in one direction. It is important that we, in turn, present Germany -- especially in the new federal states -- to Asia as an investment location of the future."
For six years now, since the unification between West and East Germany in October 1990, the federal government has transferred DM 150 billion annually to help recover the economy of former Stalinist-style German Democratic Republic. Unemployment, following the closures of many east German industries, is another problem that has to be coped with.
Although widely known for its high labor costs, Germany's reputed infrastructure, efficient traffic network and strategic location still offers a competitive edge to foreign investors.
"Several Japanese computer manufacturing firms have started investing in Thuringia," said Walter Link, the state secretary of Thuringia Lander, the fastest growing region of all five German new federal states which is home to Opel car producer and Zeiss optics industry.
To help boost business activities in eastern Germany, the German government has also built a DM 1.33 billion trade exhibition center in Leipzig, a former German Democratic Republic city. The imposing glass and steel structure of the exhibition hall, built on an area of 20,500 square meters, was opened only last April.
All this, evidently, is only part of Germany's drive to lure more and more investors to the country whose "Made in Germany" high-quality products have been known worldwide.