Germany — a strong high-tech partner

Monday, October 3, 2011
Courtesy of the German Trade Office Taipei

Germany is the economic powerhouse of Europe, a reliable partner and committed player in the global economy, even more so in a time when developments in some Euro-countries and the U.S. cause worries about future economic growth and stability.

The German economy was one of the first to recover from the financial crisis, and achieved 4.1 percent growth in GDP in 2010, a remarkable number for a mature economy. Germany not only outperformed the European Union (EU) average of 1.8 percent GDP growth in fiscal year 2010, but also performed better than Japan (3.9 percent) and the U.S. (2.9 percent). The economic growth is believed to continue at a rate of around 3 percent this year, despite the turbulences in the eurozone.

The growth drivers of the German economy are the machinery, automotive, chemical and other export-oriented industries. High-tech German products offer state-of-the-art solutions for many challenges like environmental production, security of energy supply, aging societies and mobility.

Based on an estimate from the “AHK Expertenindex,” a report published by the Association of German Chambers of Industry and Commerce (DIHK), the total exports will rise by 11 percent in 2011 and 9 percent in 2012 year-on-year, outpacing the 7.4-percent growth in global trade predicted by the IMF.

Since Taiwan is also heavily dependent on exports, it was especially affected by the 2008 crisis due to decreased demands from mainland China, the U.S. and Europe. However, like Germany, it was one of the first economies to recover and achieved a remarkable rise in GDP by 10.88 percent in 2010; the trading volume between Taiwan and Germany in 2010 also increased by 42.4 percent from the previous year.

Germany thus remained Taiwan's most important trading partner in Europe. This did not change during the first eight months of 2011, in which imports from Germany rose by 22.1 percent compared to the same period in 2010. Taiwan imported mainly machinery (23.3 percent), chemical products (15 percent), motor vehicles and parts thereof (13.9 percent), electrical machinery and equipment (11.3 percent) as well as measurement and control engineering services (7.1 percent) from Germany in 2010. Electronic components (49.4 percent), machinery (13.2 percent) and automotive parts (9.6 percent) last year made up the main export goods to Germany.

Taiwan is also a highly valuable partner for German companies in growth areas such as optoelectronics, information technology, biotechnology and nanotechnology. In the environmental sector, rising energy and commodity prices offer new market opportunities. After the disaster at Japan's Fukushima nuclear power plant, which led to Germany's Energiewende, (nuclear phase-out) the strong focus on renewable energy and energy efficiency in Germany creates new opportunities for a lucrative partnership between Taiwan and Germany.

German direct investments in Taiwan in the first eight months of 2011 amounted to US$15.8 million, compared to same period in 2010 — an increase of 9.2 percent. The overall foreign direct investment (FDI) in Taiwan also increased by 11.5 percent to US$2.9 billion over the same period.

It is the mission of the German Trade Office Taipei (GTO) to represent the interests of German companies in Taiwan and support the development of mutually beneficial German-Taiwanese economic cooperation. The German Trade Office Taipei was founded in 1981 as the official delegation of German industry and commerce and a member of the worldwide network of German Chambers of Commerce Abroad.

When the GTO started its activities in 1981, bilateral trade amounted to US$1.56 billion; after 30 years it reached a 2010 peak of with US$14.77 billion. The accumulated German investment in Taiwan has increased from US$42.24 million in 1981 to US$1.85 billion in May this year.

Last month the GTO commemorated its anniversary with a gala dinner with over 450 representatives of the German-Taiwanese business community. Distinguished guests included Dr. Christina Y. Liu, minister of the Council of Economic Planning and Development (CEPD), and Parliamentary State Secretary at the Federal Ministry of Economics and Technology, Hans-Joachim Otto. Dr. Martin Wansleben, CEO of the Association of German Chambers of Industry and Commerce (DIHK), emphasized in his congratulatory remarks: “We have come a long way. What virtually started to be the first Representative Office of German Business in Greater China has developed over the years to become a full-fledged service provider embedded into the network of bilateral German Chambers Abroad.”

On this occasion the 11th Taiwanese-German Joint Business Council Meeting took place. The forum discussed three main topics: mega cities, renewable energy and e-mobility, trends that will foster promising business and trade opportunities between Taiwan and Germany. ■

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