Growing hub for Chinese firms in Germany

Duesseldorf isn't exactly the first destination that springs to mind when you think of Chinese enterprises in Europe.

But the capital city of Germany's North Rhine-Westphalia state is not only an important investment destination, but also a vital gateway for Chinese companies into the continent.

According to estimates, there are around 800 Chinese companies in the state, predominantly in Duesseldorf and Cologne.

Petra Wassner, chief executive officer of NRW.INVEST, the state's economic development agency, said that with a gross domestic product of around 582 billion euros ($753.4 billion), it has become an important beacon of economic investment.

It generates around 22 percent of German GDP, and about 4.5 percent of the European Union's overall output.

"At 27.1 percent (worth 189.8 billion euros) the state recorded the highest direct investment share of all 16 federal states in Germany at the end of 2010," Wassner said.

"Although around 1,000 companies from North Rhine-Westphalia have invested in China during the past 10 years, it is Chinese investment in North Rhine-Westphalia that has been more eye-catching," she said.

Both Duesseldorf and Cologne are often seen as ideal conduits for Chinese companies seeking access to the vast European market.

Annette Klerks, head of the Department for International Business Service and head of the China Competence Center Duesseldorf, said that a decade ago there were only 50 Chinese companies in Duesseldorf, and the number of local companies that could provide services to these Chinese enterprises were limited to just a few.

However, the number of Chinese companies has climbed to around 300, and every year the city receives an average of 20 new members of its own Chinese business society.

"Now we have 20 pages of experts, consultants, law firms and even tea shops that can provide services to Chinese companies," added Uwe Kerkmann, director of the Office of Economic Development of Duesseldorf.

"A decade ago, it would have been difficult to find law firms that had Chinese-speaking employees. That is not the case now.

"China has been the most dynamic growth driver for Duesseldorf and on average we see 20 to 30 new Chinese companies here every year. Over one-third of our FDI comes from China."

In 2004, the city government started a "China comes to Duesseldorf" strategy, to position the city as a perfect destination for Chinese companies looking to open in the region.

The city even hired its first native Chinese employee in its local government.

Around the city, almost 150 million people live within a radius of about 500 kilometers, the equivalent to one-third of all consumers and 45 percent of the purchasing power in the EU.

"Prior investments have helped create an important Chinese community and infrastructure, which makes it even more attractive for other Chinese companies to follow suit," she added, "with institutions like the Duesseldorf China Center, the Chinese Enterprises Association and Chinese banks like Bank of China and the Industrial and Commercial Bank of China making settling in for newcomers a lot easier."

Walter Schuhen, marketing director of Duesseldorf China Center GmbH, said 15 Chinese companies use Duesseldorf as their headquarters, and around 2,500 Chinese people live in the city, with that number increasing quickly every year.

Kerkmann, too, said that in the past, Chinese companies had the image of mass-produced "cheap products", but today its image is good products for good prices, and more of its customers are seeing quality branding and strengthening company image. "We believe that Chinese companies will get better and better in the future," he said.