China-Germany Cooperation: Taicang in East China becomes a home for German firms

A small city nicknamed "China's German town" is just a one-hour drive from financial hub Shanghai. Over the past few decades, Taicang has attracted hundreds of German firms and huge amounts of investment. Currently there are over twenty training centres. Chen Tong travels to the city to find out why.

Neighboring Shanghai, there's a small county-level city famous among the German community in China. It's home to 500 German firms – more than anywhere in the country. How did the city of Taicang become the so-called "German town" of China?

We begin our journey from this bus route.

CHEN TONG, Taicang, Jiangsu Province "We are here in Taicang – at the point of origin of the number 103 bus. Check out the 'stop' sign here. If you know Chinese, most of these signs are actually transliteration of German terms."

The route runs through East Nanjing Road, an industrial cluster for the automobile industry. On this road, it's possible to find everything you need to produce an electric driving system for vehicles. The German terms we see on the board are Chinese names for some of these factories.

Our stop is called Kern Liebers – the first German firm that came to Taicang.

In 1993, the German manufacturer of car parts decided to set up a firm in China. It chose Taicang because of the location.

SIMON VEIT, Senior Vice President, Kern-Liebers, China "You are very close to the big city, to the big hubs, the port, airport, Shanghai and Suzhou. We liked it."

Taicang has a population of only 850-thousand people. But it's only a one-hour drive from central Shanghai, and sits along the Yangtze River. The natural advantages of the city make it ideal for trading.

Reporter: Are there any German firms you'd actually recommended to come?

SIMON VEIT, Senior Vice President, Kern-Liebers, China "Oh. I think plenty of those. At the beginning, Kern Liebers did a lot of advertising for Taicang. So companies like Fischer and Mubea came because we recommended it. Now I also do that."

In the 1990s, there were only a dozen German firms in Taicang, but this figure jumped significantly in the 2000s. But geography is not the only reason 500 firms have set up shop here.

One man, Duan Yueqiang, has played a key role. Over the past twenty years, Duan has traveled to Germany at least once a year – only to attract more German investment. His personal experience helps him understand German work culture.

DUAN YUEQIANG, Director of Sino-German (Taicang) SME Cooperation, Demonstration Zone Management Office, Taicang "First, they require high-end technologies. Second, they require high-quality professionals who understand how to operate high-end machine tools and possess foreign language proficiency to understand these drawings."

To help the firms find the employees they want, Taicang has even imported a German education system called the "Dual System."

CHEN TONG, Taicang, Jiangsu Province "This is an auto part. It looks simple, right? But making a perfect one requires workers' years of experiences."

This is a training center at a German firm. Students spend part of their time at a local vocational school to develop their theoretical knowledge, and the rest of the time they spend here learning the practicalities of the job.

FANG YI, Student "They are strict in every area. For example, if one part has room for error, they will try their best to minimize it as much as possible."

Reporter: Do the high standards also require you to be more careful?

"Yes. Indeed."

Taicang currently has over twenty such training centers. After studying for five years, these students remain at the firms to work. The system also provides job opportunities to locals. Sixty percent of jobs in Taicang are provided by German firms.

SHAO CHANGXIAO, Head of Training Center, Haring Precision Technology "We need to supply 30 million high pressure common rails a year, and they require a high standard of consistency. Small sized firms can't ensure such high levels of consistency. So we're still in short supply of skilled workers."

A survey published in January by the German Chamber of Commerce shows over 90-percent of German companies operating in China would remain in the country. It says close to 80 percent of the surveyed firms expect to see their industries grow in the next five years. Based in Taicang for more than three-decades, the very first German firm in the city is still growing.

SIMON VEIT, Senior Vice President, Kern-Liebers China "Industrial chain over the past decade become more and more convenient, better and better. Not only if you look at the factory, suppliers and customers of us. Also the infrastructure, you have schools now and big universities."

The five-hundredth German firm in Taicang was just presented its license this January. For Duan Yueqiang, traveling to Germany is still part of his annual agenda.

DUAN YUEQIANG, Director of Sino-German (Taicang) SME Cooperation, Demonstration Zone Management Office, Taicang "I introduce our business environment and answer their questions about the Chinese market."

Taicang is offering a series of tailor-made services for German businesses, and of course lifestyle too.

Erwin is among hundreds of Germans calling Taicang their new home. At first he came to Taicang for work, but later quit his job and opened three bakeries in the city.

Reporter: Do you think your bakery is offering something for German people who live in Taicang who have left their home something to think of their homes?

ERWIN GERBER, Bakery Owner in Taicang "Yes. That's why I come to one of my shops every day, to enjoy German culture and feel a little bit at home."

CHEN TONG, Taicang, Jiangsu Province "When the first German firm came to Taicang thirty years ago, the little county could probably never imagine that one day it would become a home for German firms in China. And they keep coming. While some people are saying 'foreign investors are quitting China,' I think what's happening in Taicang proves how wrong they are. CHEN TONG, CGTN, TAICANG, JIANGSU PROVINCE."