Singapore Mister bush, the German economy unanimously says that they want to diversify their business. So far we haven’t seen any concrete actions. Are these just empty declarations of intent?
All companies, whether large or medium-sized, know that further diversification must not remain just a declaration of intent. The Covid-19 pandemic and Russia have clearly shown what problems we can get from over-dependence. The German economy is acting accordingly, even if we will of course only see the results in the longer term.
Does expanding business to other countries mean slowing down in China?
The opposite is the case: diversification is not possible without China. A significant part of the funds for new investments, whether in research and development – also in Germany – or to open up new markets, the German economy also earns in China.
What is diversification worth if it doesn’t want to change anything about China’s cluster risk?
If you want more growth in new, emerging markets, you first have to generate it through profitable growth in existing markets. There is no other way to get the necessary funds to enable diversification.
That is likely to change, as financial investors will increasingly adopt a broad strategy as a criterion.
The capital market continues to focus heavily on profitability. And the fact is that a euro that I invest in established markets pays off faster than a euro that I invest in an emerging country. So far, hardly any market has paid for resilience.
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“China also needs trade and global cooperation”
There will definitely be more.
That’s how it should be. Looking ahead, resilience and sustainability are becoming an increasingly important part of company valuation. This is clearly recognizable, but will take time.
Is China angry about the Germans’ critical view of the country?
I don’t have that impression. We were last in China with Federal Chancellor Olaf Scholz and were openly received there. The role that Germany plays for China should not be underestimated.
Do you have any hope that China will change course?
A bit far. The direction in which China economic policy developed, for example, with international standards or data transfers, concerns us. Instead of opening up, China is closing down and putting security ahead of economic development. But I have hope that this will change. China also needs trade and global cooperation. Annual growth of three percent is not enough for a country like this in the long run.
How does diversification work? Siemens? You have to do without Russia, but you want to continue investing diligently in China.
Our approach is clear: stay strong in China and at the same time set up many new projects in other countries. In Egypt, we recently received an eight billion euro order for trains, services and infrastructure. In India, we recently won the first light rail project. And of course we are also interested in the Southeast Asian countries, Latin America and Australia, for example with a view to green hydrogen and green technologies.
Robert Habeck has prevailed with its proposals for a readjustment of the investment guarantees. How do you rate that?
The approach of promoting a broader spread of business in the regulatory arena is correct. With a view to the business of the German economy as a whole, there are certainly cluster risks.
In the future, the government only wants to secure a maximum of three billion euros per country per company. What does that mean for you?
In the past, we had to rely on special permits for large projects. If these are granted, I think it is justified because there is a political will for this in Germany and the investments directly help a large number of people, for example by improving the local infrastructure, creating jobs here and there and making the transport sector greener . I firmly believe that these opportunities will continue to exist after the reform.