Shenyang and Germany
Shenyang and Germany have a close, long-standing and mutually rewarding association. The headline example of this is the highly successful three-plant BMW Brilliance operation in the city, but in fact the connections are deep and widespread.
Shenyang and Düsseldorf, in Germany’s industrial heartland, became sister cities in 1985, and they are natural fellows: Shenyang is often known as The Oriental Ruhr, or some variation on that term. It has the same industrial foundation, as well as a similar latitude and climate. About 1,000 Germans live and work in Shenyang, which is one of the Chinese cities with the largest number of German residents. Germany’s Consulate General has been open in Shenyang since 2012 – unusual for a provincial city.
Why is this? It’s all about trade. According to the Shenyang Municipal People’s Government, there are 60 German-funded enterprises in Shenyang. In 2014, the government says, total foreign trade volume between Shenyang and Germany amounted to $5.02 billion, the highest of any country with economic ties to the city.
The list of partners and investors is a roll call of some of the greatest names in German industry: not just BMW, but also BASF, Siemens, Boysen, Fuchs and Beitteler. They have been arriving steadily since the late 1990s and continue to do so, with more recent arrivals including Voestalpine, IBS, Schiess, Schiller Gruppe and Sigma 3D.
BMW is the most famous success story, and for good reason. Since setting up in Shenyang in 2003, BMW Brilliance – the Shenyang-headquartered joint venture between BMW and Brilliance Auto – has produced more than a million vehicles through its Shenyang plants, having invested more than €3 billion. It is the only BMW automobile production base in China, covering two production plants to create finished vehicles – Dadong and Tiexi – and, in 2016, a new engine plant. Shenyang is the only place outside Germany where BMW has an R&D centre.
Germany-Shenyang is not a one-way street, however, and there are many examples of enterprises from Shenyang heading in the other direction. As of July 2015, according to the Shenyang municipal government, 12 projects from Shenyang were invested in Germany, with agreed investment volumes of $113 million.
This is partly a function of outbound M&A from China, a widespread trend through which Chinese businesses seek to acquire technology in the west and integrate it into their own practices at home. So, for example, Neusoft acquired the Automobile Navigation System Project from Johanna Otto; China Shenyang Machine Tool Co acquired Schiess and founded its design centre in Berlin; and Northern Heavy Industry acquired MFW, part of the German Wirth Group. Others are mandates, such as Shenyang Yuanda Aluminium Industry Engineering undertaking an engineering project at Frankfurt airport.
It has also been helped by connectivity. The three weekly non-stop flights between Shenyang and Frankfurt have been halted for now, but perhaps more important is the Central European railway that can get cargo to Germany from Shenyang in just 12 days.
“Sino-German cooperation is closer and closer, more and more successful, more and more wonderful,” says Jens-Peter Voss, consul ceneral of the German Consulate General in Beijing.