Shenyang: A Home for German Companies

The capital Shenyang was long considered as the Ruhr area of the East, the cradle of China’s industrial development, which was closely linked to the rise of the heavy industry and mechanical engineering. But smoking chimneys are becoming less common. Today, the province of Liaoning, with an economic output of around 400 billion euros, is ranked seventh among the 31 provinces of China.

For more than twelve years, the capital Shenyang has been the location for BMW and its supplier Continental, Delphi and ZF, with technology that is world-leading. To date, Munich-based companies have built more than 1.3 million vehicles there.

The new German-Chinese Industrial Park is the logical advancement of the location. One year ago, it was approved as a national pilot project by the Chinese State Council. It is part of the Chinese “Made in China 2025” strategy and is to serve as one of the central gateways for the German “Industry 4.0” initiative. New methods of “Intelligent Manufacturing” will be tested in the park.

However, the park not only offers linkage to high-tech, but also very concrete practical advantages for companies that are looking for partners in China or want to gain a foothold in the Chinese market. A team of service personnel takes care of all administrative matters, from finding an apartment to applying a visa. A network of contacts is available to the companies. Small and medium-sized German companies are allowed to store their products at no charge. A discount of 50 percent of the market value is granted on office rent. If the company decides to stay and expand, discounts of up to 30 percent are granted for buying the land or expanding the production facilities. There is interest from all over the world. Inquiries not only come from Germany but also from Japan, Switzerland, Australia and Spain.

More than 50 German companies have already settled in Tiexi, including Festo, Siemens and BASF. They are connected with Duisburg by a direct train connection once a week. BMW is bringing automotive parts to Shenyang by this route. The 48 square kilometer (12 km x 4 km) area with ideal infrastructure is therefore an internationally competitive location for high-end technologies.

The German-Chinese Industrial Park is located in an industrial area in Tiexi district, with market leaders such as Shenyang Machine Tool Group (SYMG), the turbine manufacturer Shenyang Blower Works, or a plant for mining machinery by the company Sany, which is one of the largest construction equipment manufacturers in the world.

The Stuttgart-based architecture and city planning office SBA drew up the framework planning of the Tiexi industrial park. “The ‘green’ project wants to combine industry and living on a human scale,” explains Oliver Lambrecht, senior city planner at SBA. The objective is the livable “city 4.0” with a great deal of usable green space and little emissions.

The excellent location makes the German-Chinese Industrial Park particularly attractive. Several metro lines connect the German-Chinese Industrial Park with the city center. The latest growth is shown by the fact that the park not only convinces German companies but also international companies. Tian Fang, China sales manager with the US wagon and locomotive manufacturer Wabtec, has just invested in the German-Chinese industrial park. “The labor costs are lower, the policy supports where it can and the transparency of the authorities is higher than at other locations in China,” said the businesswoman. Wabtec plans to invest heavily in the next five years. For German and international companies it is a confidence bonus that BMW is on site.

In order to build trust, a service company was recently founded to further facilitate the access of German companies to the Chinese market. The managing director of the German-Chinese Service Center Kaiqing Liang wants to build up an education network to provide basic and continued training to employees on the spot. The dual training based on the German model is just as much the goal, as also to provide schools with international standards for the children of newly arrived families. So far, students can attend the German school up to 10th grade, then they have to go to Beijing. Soon, however, they will be able to graduate from high school in Shenyang. It is also planned to locate a German doctor on the site of the German-Chinese Industrial Park.

For Harald Kumpfert, chairman of the European Chamber of Commerce in Shenyang, who moved to Shenyang six years ago, this is just as important for his son as for the “high-profile” skilled workers he can hire in Shenyang. He himself has already settled near the German-Chinese Industrial Park at an early stage. “For those who come to Shenyang, the German-Chinese Industrial Park can be an excellent opportunity. Especially when the products come from the field of intelligent manufacturing”. He himself is satisfied with the business. For the cold days in winter, his company Eco-WIT New Energy produces smart heating systems for production halls.