Mr. Hein, what has changed in the relationship between German and Asian business during the last decade?
Compared to the past, entrepreneurs today need to bear in mind three changes. First, more and more Asians have Europe in their sights and are even securing European expertise in senior management. The best example of this is the move by Carl-Peter Forster, the former head of General Motors Europe, to the top of India’s Tata Motors. Second, Asia’s incredible growth rates will return to normal in the medium term. That means future advantages will be based on making products tailored to local markets on the spot under local conditions. Delivering off-the-peg products will then no longer work in Asia. And third, the West must accept and make use of the fact that more and more research and development will be conducted in Asia. In the long run Asia will also compete with the West in that sector – and it will do so with lower costs and with less government regulation.
What were your first and your last major economic topics?
My first story in autumn 1999 focused on copyright piracy. Incidentally, we sometimes still have to report on that today. Now I write about raw materials joint ventures worth millions, about Asian takeovers like the acquisition of Volvo by Geely in China or the portrait of an Indian billionaire who is making history in Formula 1 racing. In an interview, the secretary-general of the Association of Southeast Asian Nations (ASEAN) recently gave our readers tips on how the West could overcome the financial crisis. Ten years ago, Asia itself was on the brink.
This year the Asia-Pacific Conference of German Business, which is held every two years, again took place in Singapore. What were the main themes?
Two themes were important in Singapore: overcoming the world financial crisis and the growing importance of Southeast Asia. Ultimately, however, both debates revolved around the Asia crisis of 1998/99. Southeast Asia dropped out of the picture because of its self-made problems and the subsequent rise of China. That was a mistake. After all, Singapore, the regional economic centre, is still here, and interesting growth markets are evolving in Malaysia, Indonesia, Thailand and Vietnam. The region is developing its own image as a central pivot between China and India, is growing together to a certain extent. After all, we are talking about a region with nearly 600 million people, with a growing middle class. I get the impression that people in German companies have recognized that again. Now the politicians are following.
What trends and attitudes have you been able to observe?
Business leaders from Germany were confronted by a self-confidence in Southeast Asia that they had not seen before and had not expected. “We are willing to offer Europe recipes and ideas about how it can deal with the crisis, because we have already successfully mastered several ourselves,” said Indonesia’s trade minister, Mari Pangestu, before some 750 business people from Germany and Asia. I believe that this wake-up call, this admonishment to again pay greater attention to Southeast Asia, did get through.
Is there a recipe for success for German businesses in Asia?
One development is clearly discernible. Initially the focus was on low-cost manufacturing in Asia. That was followed by the attempt to conquer local markets with our products. Today, Western companies are paying attention to the special wishes of customers in Asia. The car industry was a pioneer here – for example, with longer vehicles designed to be driven by chauffeurs. Today, companies like Siemens in India or China work with local engineers to design products that make do without anything superfluous, which makes them cheaper in order to appeal to the growing Asian middle class.
What developments are taking place in the opposite direction?
That’s something that will concern us very much in coming months. A banker in India recently told me that all the industrialists here already have takeover plans tucked away in the drawer. What interests them about Europe is what has always interested people: brands, new markets, experience, production processes, research and development. That applies particularly to Germany, and there particularly to the Mittelstand, the small and medium-sized business sector. When Indians like Baba Kalyani buy up large numbers of privately owned automotive suppliers, there have to be reasons for that. Step by step, Asians are working their way towards the high-quality markets of the industrialized countries.////
