Wang: Would you please talk about the latest development of Sino-German economic relationship?
Ludwig: Germany and China enjoy a very close economic relationship. Up to now, there are over 2000 German enterprises in China，with an overall employment of more than 200 thousand local (Chinese) employees. Therefore the German engagement contributes greatly to the Chinese employment market. German investment is mainly in the fields of machinery, electronics, automotive as well as environmental protection and healthcare industry. Moreover, there is a big difference between investments from Germany and other countries: German investment is strongly focused on manufacturing while other countries are more likely to invest in the service industry. Accordingly, German enterprises have transferred a higher amount of technology to China than every other country.

Wang: What do you think about the investment climate in Beijing? What fields are to be improved?
Ludwig: Investment conditions in Beijing are already quite good and steadily improving. However, there are some points that should more be taken into consideration: Many German enterprises feel that supply of high quality skilled workers is inadequate, especially blue collar workers in the construction or factory sector. A comprehensive education system is very important for economic development - not only for white-collar labor force, but also for blue-collar worker.
Besides, the improvement of market transparency is another issue. But the major concern of most German enterprises is the protection of their know-how. In terms of intellectual property rights protection, China has to strengthen its efforts to make sure all WTO requirements are fully carried out.

Wang: Does German Delegation of Industry and Commerce represent German government? What are its main missions?
Ludwig: The German Delegation of Industry and Commerce is subordinated to the Ministry of Economy, and belongs to the worldwide Chamber network under the umbrella organization "DIHK" in Berlin. Our mission is to promote German trade and investment in China. Within this scope we advise and support German companies concerning the establishment of their China business, find local partners, etc. At the same time the German Chamber of Commerce with its more than 300 member companies in Beijing acts as a platform for German enterprises in China. Our tasks also include the collecting of useful information for our government and lobbying for our member companies. Since our founding in 1999 we have established good working relations with various Chinese government agencies. But still, the German Chamber of Commerce is not allowed to have Chinese companies as members due to Chinese law. We hope that this confinement will finally be abolished next year.
Meanwhile, we warmly welcome Chinese enterprises to invest and develop their business in Germany. With its central position, Germany is an ideal platform for doing business in Europe. Enterprises investing in Germany have the best conditions for entry into all the markets of the EU. Germany is geographically, politically and economically at the very center of Europe

Wang: Compared to German government and enterprises, what are the differences of Chinese government and enterprises?
Ludwig: The Chinese government is very clever in developing its economy. By importing and absorbing a vast amount of foreign technology, Chinese enterprises have succeeded in improving productivity and efficiency within a very short time period. Therefore Chinese enterprises have saved a lot of time compared to German companies which have been developing and steadily improving their core technologies over the last 50 years. Since that time Germany is paying much attention and efforts to technological innovation. Not surprisingly Germany - with a population of only 80 million people - has been the strongest exporting nation worldwide over the last years.
From my point of view, China currently has to face three major challenges: harmonious social development, rural problems and environmental protection. According to our experience and understanding, improving the quality and durability of products is an important step for saving resources and therefore to protect the environment.
Due to its special geographic location in central Europe and with a very short coastal line, Germany suffered heavily from pollution from neighboring countries. The lower parts of several big rivers, like the Elbe, are located in Germany, which means that the rivers were already polluted when they crossed our boarder. The same problem existed with air - polluted air is brought in from neighboring countries. Therefore Germany started environmental protection research very early - already in the early 80s and has made great achievements in this field.  

Wang: What are the shortcomings of environmental protection in Beijing?
Ludwig: In general, the idea of "Development First, Environmental Protection Afterwards" is not correct. This approach leads to a huge vast of natural resources and is therefore very cost intensive for the companies. The three biggest problems concerning environment are the following:
1. Poor air quality in Beijing;
2. The traffic situation is very bad; traffic jam is becoming more and more serious every day. Economically it is not smart to have so many taxis and private vehicles in Beijing, instead the public transport system should be improved.
3. Chinese enterprises are not considering environmental issues at all. Resources are not used properly and often wasted. On the long run this will cause an upsurge in cost and consequently reduce the competitiveness of Chinese enterprises on the world market.
Since the air quality is very bad in Beijing, some foreign investors who planned to invest in Beijing are now also considering some other cities in China with better a quality of life. A healthy environment is an important element for an investment decision and should therefore not be underestimated by the Municipal government.

Wang: Thanks for your rational and crucial remarks on local environment in Beijing. Now let's talk about automotive industry development in China. German automotive industry has made a great contribution to Chinese automotive industry for its huge investment.
Ludwig: Since the opening of the Chinese market and the economic development over the last 2 decades, China has laid a good foundation for its own automotive industry and new Chinese automotive companies have been established. But still, it is not easy to manufacture high quality automobiles.
Nowadays German companies like Volkswagen (Shanghai) only employ very few foreign engineers in China; most of its employees are Chinese. In some respect, you could say that Volkswagen is also a Chinese factory.

Wang: Since you are a sinologist, I want to talk about sinology with you.
Ludwig: I started learning sinology in 1973, while I was also studying economics. Because I was very interested in China, I hoped to study Chinese economy by way of learning Chinese and sinology. At that time, China was so strange to western people; Germans felt that it was difficult to understand China. Thus I chose learning sinology, because I wanted to understand China. During my Chinese studies we read "Guwen Guanzhi", which I liked very much, although it is very difficult to understand.

Wang: For the issue of environmental protection in Beijing, I have a suggestion. We plan to organize a small seminar. Would you please invite some German entrepreneurs and scholars to participant?
Ludwig: That is a good idea. I think it is a very good plan. Please inform me the date two weeks in advance so I have enough time to arrange that.