Chinese, German companies enhance cooperation in emerging fields

Volkswagen Group China recently announced that it will invest 2.5 billion euros (about 2.67 billion U.S. dollars) in the expansion of its innovation hub in Hefei, the capital of east China's Anhui Province, to increase its pace of innovation in China.

The investment will also be used to accelerate the production of two Volkswagen-brand smart electric vehicles, which are currently under joint development with Chinese manufacturer XPENG.

This move marks another substantial investment by the German automaker, which, over the past four decades, has established 39 plants in China and employed over 90,000 individuals.

Apart from traditional Chinese auto heavyweights like FAW Group and SAIC, Volkswagen has also fostered strong partnerships with newly emerged prominent enterprises such as XPENG, Gotion High-tech and Horizon Robotics, particularly in areas like new energy vehicle (NEV) batteries, autonomous driving and chip design.

As both manufacturing powerhouses, China and Germany are reinforcing collaboration in emerging sectors, including NEVs, green transformation, and artificial intelligence.

According to the German Institute for Economic Research, direct investment from Germany to China reached a record high of 11.9 billion euros in 2023, a 4.3 percent increase compared to the previous year. The value accounted for over 10 percent of Germany's total overseas investment, the highest level since 2014.

German car parts supplier Continental AG began construction of its first wholly-owned tire production base in China in 2009. Over the years, it has expanded investments in Hefei and intensified research and development efforts in NEV tires.

"The development of the NEV industry has spurred growth of upstream and downstream enterprises and presented new requirements for tire products, which for us, is not only a challenge but also an opportunity," said Zhou Yuan, deputy general manager of the Continental Tire Hefei plant.

In 2022, the company supplied 1.8 million tires for NEVs, and this figure surged to 2.9 million in 2023, showing a significant increase, he added.

While German companies expand their investments in China, a growing number of Chinese enterprises are seizing new opportunities in Germany by strengthening technological and talent collaborations with local partners.

A recruitment list from leading Chinese renewable energy company Sungrow Power Supply Co., Ltd. showcased a diverse range of positions in energy storage, finance, and marketing in Munich, Germany.

"The headquarters of Sungrow in the European region is in Munich. After years of development, Sungrow's business here continues to expand," said Moritz Rolf, vice president of Sungrow Europe.

According to Rolf, they mainly provide photovoltaic inverters, energy storage systems, and other products and solutions for local residential, commercial, and large-scale ground photovoltaic projects, contributing to the green energy transformation in Germany and Europe.

"Over 90 percent of our employees in Europe are local hires," said Rolf, adding that Sungrow Europe has a professional team of over 500 employees, with local European staff playing vital roles across various business domains.

"Green," "high-tech," and "emerging industries" have similarly become focal points for Chinese investment in Germany. In April this year, NIO, one of China's fastest-growing electric vehicle makers, officially launched its European intelligent driving technology center in Germany.

"NIO has forged strategic cooperation framework agreements with three major German automotive component suppliers in fields such as technology development, product supply and autonomous driving," said Zhang Hui, vice president of NIO Europe.

Such transnational cooperation can inspire the innovative development of the global auto industry, Zhang said, adding that it also demonstrates the great potential of Sino-German cooperation in promoting industrial upgrading and technological innovation.

Experts believe that China and Germany own different advantages and common goals in fields including NEVs and green development, which will lay a solid foundation for future Sino-German cooperation and allow both sides to share the fruits of cooperation.