Valuable Experience in Germany’s Economic Development for China to Learn
Germany has been the heart of European economy since the founding of the European Union as well as the main pillar of European manufacturing, and China is one of the countries with the fastest economic and social development in the world today. Although the two countries are located in different continents and have different social systems, they have many similar characteristics in terms of economic development models. Both countries have developed highly industrialized, open, manufacturing-oriented and export-oriented economies and have benefited greatly from globalization over the past decade. The success of some German companies actually comes from proper assessment of policies and great understanding of domestic and international markets. Germany does have quite a lot of experience that is valuable for China to learn. The first thing to mention is the content of market participation of the government. As we all know, German producers pursue perfection and innovation, and a lot of high technology is added to factories’ process of production. In fact, the German government has played a key role in encouraging innovation and providing infrastructure support. Decentralized grassroots governments work closely with different industries from the bottom up, providing incentives, financial support, and infrastructure for companies to create R&D efforts, while ensuring that SMEs and suppliers can also become participants. Many successful German companies with excellent creativity and high internationalization level are actually small and medium-sized enterprises, which are so-called “hidden champions”. They become a major part of the German economy. This stems from the fact that the German government has always ensured that SMEs and large enterprises can develop on an equal footing and compete fairly under restrictions of policies. China has made great achievements in the fields of computer, communication technology and energy, but its innovation capability still needs to be improved. Chinese government is already trying to strengthen collaboration between different industries and improve the market application capacity of scientific research results.
Another important experience to point out is to cultivate local industrial clusters and develop industrial networks. In Germany’s industrial structure, an important feature is that Germany has a large number of spontaneously formed industrial clusters. They include dense and complex networks of industrial collaborations in which companies collaborate with suppliers and customers, local research centers, universities, vocational schools and even their competitors. German government will not try to create a new industrial cluster from the top down, but will look for companies and research institutions that are already involved in target areas and provide them with necessary funding, possible equipment and personnel support. In today’s China, the proposal of the Innovation Cooperation Network undoubtedly plays a strong role in promoting the development of manufacturing and high-tech industries. If industrial clusters and industrial networks like these can be established among SMEs and expanded to include more industries besides high-tech fields, there will undoubtedly be a new path for the development of China’s economy.
Germany and China, which seem to come from two different worlds, actually have a lot of similar internal development characteristics. I believe that commuication between two different economic systems will absolutely be beneficial. It can bring more ideas to solve existing problems and promote progress made by each country.
By Tao Cheng
