Documentation Brochure - Hamburg Summit

DOCUMENTATION 2006
THE HAMBURG SUMMIT
China meets Europe
13 to 15 September 2006
Hamburg Chamber of Commerce
www.hamburg-summit.com

Sponsors
Table of Contents
Initiator & Organiser
Exclusive Sponsor
Platinum Sponsor
04 Welcome Address by
President Karl-Joachim Dreyer
20 Banking and Finance
in China
34 China´s Future Role
in Asia
Gold Sponsors
06 A Bridge for Knowledge and
Skills
22 Getting there:
Logistical Challenges
36 Awards
Supporters
08 Let us like to be Neighbours
24 China´s Emerging Automotive
Sector
38 Supporting Programme
10 We need Understanding
26 Asia in 2015 – Scenarios
42 Outlook by
Conference Chairman
Nikolaus W. Schües
12 Still more Work to do
28 China`s Need for Energy and
Natural Resources
44 Views on the Hamburg Summit
14 China – the new
Economic Powerhouse
30 Competing Powers in Asia
45 Quotes
Partners
Media Partners
Summit Partners
Official Media Partners
Academic Partner
Supporting Media Partner
16 EU-China Trade Relations
18 China´s Environmental
Situation
32 China and Europe in a
Globalised World
46 Summit Speakers
47 Art of Illumination
Imprint:
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Photos: R. Magunia, K. Angerer
Chinese Translation and Type Setting:
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Circulation: 2.500 copies
2 THE HAMBURG SUMMIT 2006
THE HAMBURG SUMMIT 2006 3

Welcome Address by President Karl-Joachim Dreyer
Karl-Joachim Dreyer, President, Hamburg Chamber of Commerce
Two years ago, we set up the first
“Hamburg Summit: China meets
Europe” hoping that it would become
the premier economic gathering to
strengthen the already prospering
business relations between Europe and
China. Our hopes were no illusions –
2006 we have continued this series.
Never before in the history of our Free
and Hanseatic City of Hamburg, we
welcomed so many high ranking
Chinese politicians and businessmen.
This clearly is a sign of trust in our
city as the premier China business
location in Europe. Hamburg is widely
perceived as the most important center
for China-related business all over
Europe. For thousands of companies in
China, our city is the preferred gateway
to the European market. For Hamburg
and its business community the relationship
to China plays a prominent
role: More than two million containers
coming from or going to China - a total
of 20 percent of all containers being
shipped between China and the EU – are
handled by our port every year.
Hamburg plays a central role in the
shipping routes between China on the
one hand and Northern, Central and
Eastern Europe on the other hand.
It is a stable, long lasting and productive
cooperation that is beneficial for
all partners: Hamburg, Germany and
Europe profit enormously from China’s
economic boom. China is no longer only
a sourcing and production place but has
become one of the world´s largest
consumer markets. It has emerged into
one of the global economic players and
is now entering a decisive phase of
economic and political development.
We should therefore put our focus
on the abolishment of trade barriers for
more liberalised markets. In addition to
this, dialogues on strengthening the
legal security must be pushed in order
to create a stable basis for private
investment in China. For the EU, it is
necessary to accept China as an equal
trading partner and to accept fair competition
from Chinese companies.
Both Europe and China have a lot of
experiences to share. Further steps in
this direction still have to be done.
Feasible and long-lasting solutions can
only be reached by an open dialogue. For
this purpose the “Hamburg Summit” is
the perfect platform. It was a pleasure as
well as a special responsibility for us to
host this conference again in 2006.

A Bridge for Knowledge and Skills
China´s Prime Minister Wen Jiabao gives his opening speech at Hamburg´s City Hall
The visit of Wen Jiabao, Prime
Minister of the People’s Republic of
China, was the highlight at the beginning
of the conference. Many participants
considered his address as
frank and ground-breaking. Wen began
his speech by stating that “since its
inception the Summit has played
an important role in enhancing
cooperation and friendship between
China and the European Union.” And he
continued: “China’s relations with
Europe are the best among relations
with countries, they are stronger than
ever before. If one compares China-EU
relations with a huge ship in the ocean,
the business community would be its
powerful engine.”
In his speech Wen wanted to make a
number of points clear “to help you
better appreciate developments in
China.” He first assured the audience
that China would continue to pursue
the path of peaceful development. In
this process the Chinese government
pursued “a strategy of opening up for
mutual benefit that will bring more
opportunities to the world.” Wen cited a
number of figures to illustrate the
benefits of this policy. “Since its accession
to the World Trade Organisation in
2001,” he mentioned, “China’s annual
imports have averaged about 500 billion
US $, creating nearly 10 million
jobs for the exporting countries and
regions.” The will to open up and eliminate
trade barriers must, however, be in
evidence among all partners, Wen said.
“We call on all countries to open
markets, lift restrictions on technology
exports, boost international investment
and establish an international multilateral
trading system that is open,
fair, reasonable, transparent and nondiscriminatory.”
Naturally, he also commented on the
extremely important energy issue.
“China,” he said, “is a major energy
consumer, but more importantly it is a
major energy producer. Two thirds of its
hydroelectric power potential remain
untapped, and the development of
nuclear, wind and biomass power has
just begun.” In 2005 the Chinese
government had framed a clear target:
“Our goal is to build a stable, economical
and clean energy supply system.”
Wen also dealt with a topic that
dominated many discussions at the
Hamburg Summit: the importance of
protecting intellectual property rights
and IPR holders’ interests. “To us in
China,” he explained, “protecting IPR is
both an international obligation and a
requirement for promoting China’s own
development and enhancing its capacity
for independent innovation.” He left no
doubt as to what must be done: “We
must make sure that steps taken in
China to protect IPR are as hard as
steel.”
Wen described by way of an anecdote
what is necessary to make relations
successful and profitable for both sides.
Gottfried Wilhelm Leibniz had stated
that a bridge for exchanging knowledge
and skills needed to be built. “Today, 300
years later,” Wen said, “China and
Europe are in need all the more of a
bridge of this kind.”

Let us like to be Neighbours
Hamburg`s First Mayor Ole von Beust
When I grew up as a little boy in
Hamburg in the 1920s, China
was as far away as the moon tonight,”
Helmut Schmidt, recipient of the China-
Europe Friendship Award of the
Hamburg Summit 2004, told the audience
in his speech during the opening
dinner. Since then the number of people
on the planet had more than tripled, but
the Earth and the space on its surface
had not grown. “We are getting ever
closer to each other,” the former
German Chancellor concluded, expressing
a personal wish to the Chinese,
European and German guests. “Let us
understand that we are neighbours,” he
said, “and strive for good neighbourly
relations. Because the more closely we
cooperate, the greater is the benefit for
both sides.”
For the much-travelled and experienced
politician Helmut Schmidt “the
almost unbelievable economic upswing
that the People’s Republic of China has
achieved since the late 1970s [is] an
outstanding phenomenon that has
rarely occurred elsewhere in the history
of mankind.” In his view it is a miracle
that deserves “great respect from us
Europeans.” “Of course,” he told the
Chinese guests at the Hamburg Summit,
“I am well aware of the hundreds of
social problems which the enormous
economic change and economic growth
have presented to you.”
But Schmidt was confident that
Chinese politicians will be able to
solve these problems responsibly. “My
confidence is founded in the cautious
prudence of Chinese leaders that I have
observed over the past three decades,
thanks to Deng Xiaoping´s example.” So
Prime Minister Wen Jiabao´s calligraphic
entry in Hamburg´s Golden Book
he assured the Chinese visitors that “the
other world powers have no legitimation
to criticise China.”
Hamburg’s First Mayor Ole von Beust
endorsed this view in his words of
welcome to the Chinese guests. “In all
the years of cooperation, China and
Hamburg have always shared a mutual
respect for each other’s collective selfconception
and cultural identity. We
meet each other not in a lecturing mode
but in dialogue,” he said. He went on to
deal briefly with the centuries-old
tradition of relations between the
Hanseatic city and the gigantic Asian
empire. “In Hamburg, China has met
Europe not just since China’s unparalleled
rise to economic power status in the
twenty-first century but for many
generations,” Mayor von Beust said.
Relations dated back to the early
eighteenth century when the first ship
laden with tea, porcelain and silk
berthed in the Port of Hamburg.
Germany’s Economic Affairs
Minister Michael Glos, representing the
federal government explained that “we
are engaged in an increasingly intensive
dialogue. China is our most important
trading partner in the Asia-Pacific
region and, conversely, we are proud to
be China’s most important partner in
Europe.” German firms had much to
offer towards developing China, Glos
said. They did, however, expect fair
framework conditions in the Chinese
market. “The process of market opening
in China has not yet been completed,”
the minister from Berlin said. Germany’s
aim was to intensify cooperation.
That was why Glos told the
Chinese guests: “Let us work jointly to
achieve this goal.”

We need Understanding
Xu Kuangdi, CFIE, and Theo Sommer, Die Zeit, discussed the protection of intellectual property rights
Hamburg´s First Mayor Ole von Beust (left) was one of the many attendees of the opening session
Xu Kuangdi, Chairman of the China
Federation of Industrial Economics
(CFIE), crowned his opening address to
the Hamburg Summit with a special
message. “The EU,” he said, “is China’s
biggest trading partner and Germany is
China’s largest trading partner in the
EU. At the same time China is the EU’s
second biggest trading partner. In 2005
the value of Sino-European trade value
reached nearly US $ 218 billion, exceeding
for the first time the value of trade
between China and the United States.
And it will soon reach US $ 300 billion.”
These figures show that economic
cooperation has progressed rapidly
since 1975, when China and the
European Economic Community
established diplomatic relations. Theo
Sommer, editor-at-large of the German
weekly newspaper Die Zeit, first visited
China with Helmut Schmidt in 1975 and
has since been a frequent visitor there.
His question was: “How we can promote
further economic relations
between Europe and China” Xu’s
answer: “We need dialogue, we need
understanding on both sides.”
To document the growing importance
of relations, Xu arrived with the largest
delegation of Chinese entrepreneurs,
politicians and academics ever to visit
Hamburg. But trade, Xu explained, was
only one aspect. The EU was also, with
companies like Airbus, Siemens, Nokia
or Volkswagen, the fourth biggest investor
in China and its largest supplier
of technology. “China and Europe are
economically inter-complementary,” Xu
said.
More and more Chinese enterprises
would also invest and set up companies
in EU countries. Xu sees three serious
obstacles here: first, the very different
legal systems from one country to the
next that Chinese entrepreneurs failed
to understand, second the high levels of
taxation compared with China, and
finally dealing with powerful trade unions.
In China, workers’ representatives
and management were friends and not
adversaries, he said.
Protection of intellectual property
rights was an important issue right
from the opening debate. Replying to
Sommer’s question how China planned
to deal with this issue in the future, Xu
offered an original explanation for the
ongoing difficulties. In traditionally
agricultural China, he said, it had been
customary to learn from neighbours.
This tradition continued to determine
the behaviour of businessmen. His
fellow-countrymen had yet to learn
that such a thing as intellectual property
existed. “We must train entrepreneurs
to abide by international laws,” he said.
“That is a major task for the Chinese
government.”

Still more Work to do

China – the new Economic Powerhouse
Ronnie C. Chan, Hang Lung Group, predicted China to account for half of the world´s manufacturing capacity in the near future

EU-China Trade Relations
Lutz Bethge, Montblanc International Laurence Barron, Airbus China Cai Weici, China Machinery Industry Federation
Diethard Gagelmann, Otto Group
The development of trade is an accurate
reflection of economic development
in China. The growth rates are
immense, opportunities are enormous,
especially for European companies, and
not just in basic industries such as
energy, automotive or chemicals, but
also in luxury goods. “A few years ago
no-one could imagine the Chinese as
customers for luxury goods on a large
scale,” said Lutz Bethge, Managing
Director of Montblanc International in
Hamburg, but “in the next decade China
will be the No. 2 market in luxury
products, exceeding the United States.”
Considerable problems exist, of
course, inevitably so. They mainly relate
to products such as textiles, clothing
or shoes. There is a vague “feeling
of Chinese invasion” in these markets
in Europe. The EU criticises exports of
pirated products and with it the lack of
protection for intellectual property
rights in China. But Diethard Gagelmann,
Member of the Executive Board
of Otto Group, the world’s largest mail
order company said: “We are very
satisfied”. “China can compete with
other countries even better because of
good products.”
So a good work of information
remains to be done in order to clarify
that European firms also have opportunities
in China. How big they are is
something that Cai Weici, Vice President
of the China Machinery Industry
Federation, can underscore with ease in
relation to his own industry. It is, he
said, China’s largest and, most unusually
for China, it is an industry with an
import surplus. But he set clear priorities.
“We need efficiency to protect the
environment and we need to improve
quality.” That was why the best opportunities
for foreign providers were in
the high-tech and high-value sectors.
A company that clearly fulfils these
requirements is the European aircraft
manufacturer Airbus. “20 % of our entire
production goes to China,” said
Laurence Barron, President of Airbus
China. At the same time, “half of the
Airbus planes flying in the world have
parts from China.”
The question for all European partners
in trade with China is, however,
whether they can make a profit or trade
is based on the “you pay all, we get all”
motto that is imputed to the Chinese.
“Pricing was a very painful part, but we
are making a profit,” said Barron, commenting
on experience at Airbus, while
Bethge’s brief comment was: “It’s OK.”
Both men realised, of course, that it
is no longer merely a matter of selling
their products to China. Service and
research are two keywords that will be
increasingly important in the future.
“People don’t buy a brand, they want
service,” said Bethge. Barron agreed.
“Service,” he said, “is a very competitive
issue.”

China’s Environmental Situation
Meinhard von Gerkan, Klaus Töpfer, Alfred Th. Ritter and Soledad Blanco (f. l. t. r.) discussed the various environmental challanges China faces
The Rhine,” joked Klaus Töpfer, referring
to the swim he took in the river
as Germany’s federal environment
minister in May 1988, “was not dirty
only after I had bathed in it." All rivers
had been so polluted back then that
there was an urgent need for action.
Töpfer, director of the United Nations
Environment Programme (UNEP) until
March 2006, thereby made the point in
his keynote address to the Hamburg
Summit that environmental issues are
by no means shelved only in developing
countries. “Yet environmental protection
is an economic necessity,” he said.
Looking at China, Töpfer who advises
the Chinese government on environmental
issues, said, “financial and
human capital are available in sufficient
quantity. If the country is to maintain
its growth momentum it must reinvest in
its natural capital.” That was where the
crucial bottleneck was to be found.
Twenty of the world’s 30 cities with
the highest levels of atmospheric pollution
were in China. That was why it was
important for the government to invest
in environmental technology. Töpfer
specifically advocated developing
renewable energy resources and
decentralising power production. “The
Chinese leaders know that efficiency in
the use of resources must improve.”
The panel agreed that the Chinese
government today is more keenly aware
of ecological considerations. German
chocolate manufacturer Alfred Th.
Ritter, recipient of the China-Europe
Sustainability Award of the Hamburg
Summit 2006, even said that the two
best solar systems for the production of
regenerative energy were in China. He
now has solar collectors made in China.
“With them we have reduced by a third
the energy costs of our production in
Germany,” he said.
Chinese entrepreneur Zhang Yue, recipient
of the China-Europe Sustainability
Award of the Hamburg Summit
2004, said that his country had undertaken
an U-turn in environmental policy.
What had been done in the past six
months was comparable to a revolution.
“The ecological problem will be solved”,
he ascertained. Zhang’s company Broad
Air Conditioning manufactures ecofriendly
air conditioning systems that in
some cases are powerful enough to
supply entire airports. A more critical
note was added by Hamburg based
architect Meinhard von Gerkan, whose
office in China designs cities and has
built, amongst others, the trade fairs and
congress centres in Nanjing and
Shenzhen. There was no logical and
ecological urban planning in China at all,
he said. Cities grew uncontrolled. “The
distance between Shanghai and Nanjing
is 200 kilometres, but you cannot say
where one city ends and the other begins,”
von Gerkan said. In addition, enormous
amounts of heating energy were
wasted in housing. Soledad Blanco of the
EU Commission’s environmental affairs
department also felt that China had major
environmental policy deficits. At the
regional level there were no minister to
implement the government’s environmental
programmes. Yet there was so
much to be done. No country in the
world used as much coal as China. “Every
14 days a new 1,000-megawatt coalfired
power station is built,” Ms Blanco
said. China was also responsible for 40 %
of the world’s carbon dioxide emissions.
“The consequences for global warming
are immense,” she said.

Banking and Finance in China
Heinz Dollberg, Allianz Versicherungs-AG Ulrich W. Ellerbeck, HSH Nordbank AG Margot Schüller, GIGA - Institute of Asian Affairs Jin Yun, Shanghai Pudong Development Bank
The financial sector is the heart of the
economy,” said Jin Yun, Chairman of
the Shanghai Pudong Development
Bank. Because growth was unlikely to
lose momentum in the years ahead the
sector was sure to play a much larger
role in the future than it does today. Jin
described three conditions that had to
be fulfilled to ensure that it does. “We
must open the door, we must broaden
the open areas and, compared with
years ago, our steps must be bigger.”
In principle, he said, there can be no
doubt on these points, “but we feel that
finance is very sensitive.” The opening
of the financial sector must not proceed
at a faster pace than the development
of the economy. Otherwise restrictions
would be inevitable, with unforeseeable
consequences for the economy. “If you
look at international financial institutions,”
Jin said, “they took a long time to
develop.”
The greatest uncertainty Chinese
banks face continues to be non-performing
loans. Rainer Schäfer, head of
country risk and emerging market
research at Dresdner Bank, said: “The
government has done a lot to recapitalise
Chinese banks, bring down
the ratio and improve controlling, but
there can be no doubt that a big black
hole still exists.” Heinz Dollberg, head of
the Asia Pacific division at Allianz
Versicherungs-AG agreed: “The capital
market is the bottleneck.” And Ulrich
W. Ellerbeck, Member of the Management
Board of HSH Nordbank in
Hamburg, also promised that “many
years will elapse before we see a really
free market in China.”
So why is the HSH Bank already
committed in the country if Ellerbeck is
convinced that in view of the size of the
market all foreign banks are just niche
players “We have to follow our
customers and we have to protect
them,” he said. Given the size of the
market, he added, being represented in
it would seem to be a must. “Investing
in the Chinese market is investing in the
future,” Ellerbeck and his colleagues
agreed calling unanimously for further
liberalisation of the market. Competition
is still rudimentary, as Dollberg
made clear by means of a small example.
In all of China a total of 36 insurance
companies are now in business.
And how many compete in the German
market “More than 1.500,” Dollberg
said. Jin Yun added: “As Chinese banks
we are already feeling the pressure of
competition. We have to learn how to
compete with you, we still have a way
to go before we reach international
standard.” To do so, many innovationsremain
to be implemented. Management
skills must be improved, Chinese
banks must learn to handle risks and
they must, above all, look after their
customers much more effectively.
“The key of all keys,” Jin Yun was
firmly convinced, “is to train talents,
and the key to training talents is to
change mentality.”

Getting there: Logistical Challenges
Wong Wai Shing, Kerry EAS Logistics Limited, deliveres his impetus speech
Wong Wai Shing praised the chances
of the logistics industry in
China. “The market is there and it is
extremely rosy,” he said, “but unfortunately
roses have thorns.” In other
words, the industry still faces great tasks.
Wong is Joint Managing director of Hong
Kong-based logistics company Kerry EAS
and Vice President of the China International
Freight Forwarders Association. In
his keynote speech at the Hamburg
Summit Wong said that in 2005 the
Chinese logistics market had done 470
Billion US$ of business and that business
was increasing by 25 % per year. “The
potential is enormous,” he said.
The other panellists were also positive
about the prospects. “Logistics in China
is growing more and more important,”
said HSH Nordbank director Peter Rieck.
His bank is the world’s largest ship’s
financer and also does business in the
aviation and railways sectors.
Both Wong and Rieck also stressed
the difficulties of commitment in China,
however. “China is so big, so large. No
company can cover the whole country,”
Wong said. This would require far too
much of an investment, so cooperation
was a must. What is more, the market
was too fragmented. “At the moment
500,000 local companies offer different
kinds of logistics services,” Wong said.
Rieck agreed that efficiency suffered as
a consequence. “In Europe logistics
accounts for about 7 % of the cost of
typical retail goods,” he said. “In China it
is more than 15 %.”
Another important issue was the
inadequate liberalisation of the market.
“In China we have offices at 130 locations
and need a total of 900 licenses to
operate them,” Wong complained.
While inland transport suffers from
poor roads, overburdened Chinese
railways and poor-quality warehousing,
China’s seaports are well developed. A
man who benefits from the boom in
container shipping is Guan Tongxian,
president of Shanghai-based Zhenhua
Port Machinery. He stated that he was
expecting container traffic to continue
to increase in China. “The quality of products
made in China is excellent, and
labour costs are much lower than in,
say, Europe.”
Hapag-Lloyd CEO Michael Behrendt
was very satisfied with conditions in
China. “We have no logistical problems
whatever there,” he said. Since acquiring
CP Ships last year the Hamburgbased
company has been one of the
world’s leading container shipping lines.
“China is the world’s most important
market, not just for us but for all
of container shipping,” he told the
Summit attendees.

China´s Emerging Automotive Sector
Zhu Yanfeng, China FAW Group
Corporation, expects China´s automobile
production to double by 2010
Summing up the outlook for
China’s automobile industry, Bernd
Gottschalk, President of the German
Automotive Industry Association (VDA),
stated that “today China is one of the
great challenges for the automotive
industry – and soon it will be one of the
great challengers.” The challenge is a
fast-growing market with production
set to increase from well over five
million vehicles this year to more than
ten million in 2010, according to Zhu
Yanfeng, President of China FAW Group
Corporation and Chairman of the CFIE
Presidium.
You can see with the naked eye how
fast the automobile industry has grown
in China in recent years, said Mei Zhaorong,
Honorary Director of the Institute
of World Development, State Council of
China, and recipient of the China-Europe
Friendship Award of the Hamburg Summit
2006, “You used to see more motorcycles
than cars on Chinese roads, now it
is the other way round.” Gottschalk
agreed, saying that “no other market has
experienced such growth in volume and
nowhere else have such large investments
been made in recent years.” The
automotive market in China has
changed significantly since China joined
the WTO in 2001, said Winfried Vahland,
President and CEO of Volkswagen Group
China. Vahland, whose company was active
in China at a very early stage and is
one of the leading manufacturers, noted
that “we have to fight for all our customers.”
Volkswagen does so mainly by
means of state-of-the-art technology.
“Today we have 1,600 R&D people in China,
and we will be increasing that number,”
he explained. VW has decided to offer
only the latest technology in China,
partly with a view to reducing the
contribution of traffic toward environmental
pollution.
Zhu Yanfeng promised that “the
automotive sector will play a key role in
the economy.” In the next five years
China would develop one or two brands
of its own. It would do so, however, in
accordance with the axiom “some
people play tennis, we play ping-pong.”
In other words, Chinese firms seek to
conquer the low-price segment, whereas
cooperations or imports will continue to
predominate at the upper end of the
market. This view was shared by Zhang
Guangsheng, Vice Chairman of the
Board of the Shanghai Automotive
Industry Corp. (SAIC). “Domestic competition
corresponds with international
cooperation because competitiveness is
a difficult process, but the result is
worth it,” Zhang said.
In China and everywhere else in the
world, the emergence of strong brands
is a key factor in modern competition
on the automotive market. “For this to
happen it is important that automotive
production in China is integrated
seamlessly into the worldwide supply
networks of manufacturers and suppliers,“
Gottschalk stated. In this case,
Gottschalk said, he is convinced that
China will achieve its targets.
“Everything I read in the five-year plans
I have seen in reality. And whenever
a competitor shows up, take him
seriously. Chinese competition in
Europe will happen.”

Asia in 2015 – Scenarios
Richard Hausmann, Siemens, and Eberhard Sandschneider, German Council on Foreign Relations, outlined their views an Asia´s future
Forecasting the future is difficult,
all the panel-speakers agreed. But
Richard Hausmann, President of Siemens
China, risked three theses, the first
of which most impressively reaffirmed
the Summit’s basic tenor. Economically,
he said, the twenty-first century might
not be Asian, but Asia would play a significant
role. “We will have to make
room for China and India,” he said. And
he left no doubt that “it is something
that will not only happen but also need
to happen because otherwise China will
face big social problems.”
It will be accompanied by powerful
economic changes in the two up and
coming Asian countries. “India and China,
those two mega-countries, will no
longer be the workshop of the world,
they will shift to innovation. That is a
clear goal of the Chinese government,”
Hausmann said. Last not least, both
countries would play a more important
role in world affairs. “I am more on the
optimistic side,” he concluded, “that
growth will go on at least until 2015.”
Although Professor Eberhard Sandschneider
of the German Council on Foreign
Relations agreed with this scenario
he was unable to share the previous
speaker’s optimism. Yes, he said, the
twenty-first century would be a global
world with a strong Asian pole, and the
basis of power would be innovation and
not the army. But the biggest risk would
be to manage stability in the world, “and
therefore I have some doubts about a linear
development.” China was so big
and all options were open. “Whatever
you want to see,” he said, “I will show it
to you.” The West had long ceased to
serve as a model. Gone were the days
when the free market economy and democracy
had been a blueprint for the
world. “In Asia,” Sandschneider said,
“self-confidence is growing faster than
the economy.” Europe was now no more
than a museum. Theo Sommer, editor-at-large
of the German weekly Die
Zeit, underscored this position with a
few sober figures. In 1900 the Europeans
were still 20% of the world’s population.
Today they made up a mere 11%
and in 2015 they would be barely 7%.
“We seem to be a vanishing race,” Sommer
said.
Europe already has a problem today,
the speakers agreed. It has no coordinated
policy to Asia. “China recognises
Europe as an economic power but not
as a political power”, Hausmann said.
And Europe has lost its political innocence
as well as the US. “If we push these
countries to human rights we should
protect them at first”, Professor Sandschneider
noticed.
For all the growing self-assurance
there are some Chinese, like Zhang Yue,
Chairman of Broad Air Conditioning,
who lament the consequences of growing
prosperity, and not just on account
of the serious ecological and social
problems. “People have become very
materialistic,” he complained. “We are a
country of materialists.” People used to
read a book and be happy. Today, under
growing Western influence, he said, “we
consume so we are happy.”

China`s Need for Energy and Natural Resources
Secure supplies of energy and raw
materials are of great importance
for China. Energy is the driving force
behind the Chinese economy’s
enormous dynamism. 40 % of the world
increase in oil consumption comes from
China, former Australian Prime Minister
Bob Hawke estimated, and Ernst-Ulrich
von Weizsäcker, Professor at the
University of California in Santa
Barbara, adds more figures. “China,” he
said, “produces 4 % of the world’s
domestic product but consumes 12 %
of the energy.”
“China’s energy and resource
consumption per unit of GDP is much
higher than that of the rest of the
world,” said Xie Qihua, Chairwoman of
Baosteel Group Corporation, the
country’s biggest steelmaker. “China,”
she warned, “faces an increasingly
severe shortage of energy and resources.”
To prevent that from happening,
the Chinese government made a significant
adjustment to the national development
strategy. The new eleventh
five-year plan focuses on eco-efficient
economic development and environmental
protection. Furthermore, the
plan seeks to improve the utilisation of
natural resources so as to reduce
energy consumption by 20 % per unit
of GDP by 2010.
But China’s consumption of energy
and raw materials will increase
nonetheless. Renewable energies such
as wind power will play a part in this
development. Werner Marnette, CEO of
Norddeutsche Affinerie AG, warned the
Chinese not to make the same mistakes
as the Germans: “Ensure that there is
competition in the production of energy.”
“The main goal is coal”, Zhao said.
“Coal is extremely important in China,”
Jean-Christophe Iseux, Special Adviser
to the People’s Government of China
agreed. Iseux also forecasted that China
will devote substantial political efforts
to secure imports of oil and other sources
of primary energy. Hawke agreed
unreservedly: “China’s diplomats are
heavily into securing foreign energy
resources.” He also stressed that Iran’s
importance for China should not be
underestimated. “It is very much in the
centre of a conflict between the United
States and China,” he said. Hawke therefore
sees great opportunities for a
“convergence of interests between
China and Europe.”

Competing Powers in Asia
The Australian Ambassador to Germany,
Ian Kemish, tells an anecdote
to describe relations among Asian
countries. Some years ago he attended
a conference of Asian states at which
the former Japanese Prime Minister
Junichiro Koizumi spoke. Koizumi
addressed one head of government
after another directly, describing bluntly
the conflicts that Japan had with his
country. Kemish feared that there might
be an uproar. But Koizumi ended his
speech by saying that Japan enjoyed
very close economic ties with these
countries and that he was therefore
willing to resolve all of the conflicts.
Ampalanavar Selverajah, the
Singaporean Ambassador to Germany,
also emphasised the peacekeeping
effect of economic ties. “The more
intense economic growth, the more
everybody has to lose by a conflict,” he
said. “But where are the problems”,
Eberhard Sandschneider, Otto Wolff
Director of the Research Institute at the
German Council on Foreign Relations,
asked. Volker Stanzel, German
Ambassador to China, conceded that
“competition in Asia sometimes gives
rise to fears,” but Asian countries are
discovering the advantages of cooperation.
“Instead of competing powers in
Asia we will have competing regions like
the United States, the EU and Asia,”
Stanzel predicted. “But we want an
architecture that is open,” said Selverajah,
“because Asia is still a region of
difference.”
China, Japan and India will have a
stake in the region, but there is always
“an invisible partner in the room,”
Kemish pointed out: the United States,
China and Japan were the leading
powers and “no country in the region
wants to be in a position where it has to
choose between them,” Selverajah said.
Relations between China and Japan
are the most important for regional
development and security. China’s rise
has a greater impact on Japan than on
the United States. In 20 years China will
have overtaken Japan in economic
power. “For a stable Asia it is important
that both countries come together,”
Selverajah is convinced. The conclusion
reached by Guo Wei, President of
Digital China Holdings, is wholly consistent
with the positive underlying
mood. “Chinese growth should bring
benefits to the world, even to Japan,”
he said. “The largest risk is misunderstanding.”

China and Europe in a Globalised World
Former German Chancellor Helmut Kohl encouraged Europeans to show more respect for China´s cultural heritage

China's Future Role in Asia
Two countries stand for all Asia’s
resounding progress towards a new
era. China is the model, but India too
has now set out on the path that China
has successfully taken for two decades.
Lee Kuan Yew again addressed the
Hamburg Summit’s participants by
satellite link. The founder of modern
Singapore is convinced that the Chinese
economy will continue to grow rapidly:
“I think they can carry on at 8 % for the
next years, and India is growing at
about 70 % of China’s rate. East Asia
will be the fastest growing region in the
world.”
Lee, Prime Minister of Singapore
from 1959 to 1990, vividly recalled the
beginnings of the Chinese economic
miracle. In 1978 Deng Xiaoping visited
Singapore and Hong Kong. “He had not
expected to see cities that were more
modern than Beijing and Shanghai,” Lee
said. In December that year the Beijing
authorities decided to open up the
country that had until then been sealed
off from the rest of the world.
Nearly one million Chinese tourists a
year now visit Singapore, and “everybody
is learning Chinese to do business,” Lee
mentioned. Singapore had already
invested heavily in China, “so we asked
our businessmen to invest in Vietnam
and other countries,” the still influential
elder statesman said. It was a matter of
not putting “all eggs in one basket“.
China’s enormous social problems
and environmental pollution will not
impede its growing influence on a
permanent basis, Lee is convinced. “The
new leaders who took office two years
ago previously served in poor regions.
They are shifting the emphasis from the
coast to the west and northwest.” And
they would eventually solve the problems.
“It will take a long time, it is
costly but they will spend on it,” Lee
said.
Whatever happens, Beijing would
become a rich city exerting a great
attraction on all Asia, and the 2008
Olympic Games would make a major
contribution toward this. They are
planned as “green Games” and Lee said
with a wink that China will keep this
promise. In 1999, to mark the People’s
Republic’s 50th anniversary, the sky
over Beijing was to be blue. So Factories
were shut down for two weeks. “For the
Olympics they will shut them down for
three weeks,” Lee forecasted with a
laugh.

Awards
Zhang Yue, Broad Air Conditioning, presented the “China-Europe Sustainability Award” to Alfred Th. Ritter, Alfred Ritter GmbH & Co. KG
Volker Stanzel, German Ambassador to China, handed the “China-Europe Friendship Award“ to Mei Zhaorong, Institute of World Development
The gala dinner at the Hotel Atlantic
Kempinski on the Alster was another
highlight of the Hamburg Summit.
Festively decorated and illuminated for
its visitors from all over the world, the
hotel in its exclusive lakeside location
was a worthy venue for the presentation
of the China-Europe Sustainability
Award and the China-Europe Friendship
Award.
After an artistic prelude, with Chinese
music played by three young female
Chinese musicians in traditional dress,
the awards were presented. Zhang Yue,
Chairman of Chinese power engineering
firm Broad Air Conditioning and the
2004 prize-winner, presented the China-
Europe Sustainability Award to someone
“whose name most of you surely have
sweet memories of” – Alfred Th. Ritter,
CEO of German chocolate manufacturer
Alfred Ritter GmbH & Co. KG.
Ritter has campaigned for years for
ecology and alternative energy. In a
joint venture he manufactures solar
power systems in China. Zhang praised
Ritter’s commitment because “solar
energy does not earn him a lot of profit
in the short term but he is committed to
it in the long term.” Asked what the
connection between chocolate and
environmental protection was, Ritter
said, “I just like to produce things that
are really useful for people.” And in the
long term solar power, he said, had a
great future.
In keeping with the Hamburg
Chamber of Commerce’s intention of
choosing a German and a Chinese
award-winner, the second prize of the
evening went to a personality from
Beijing: Mei Zhaorong, advisor on
foreign affairs to the Chinese government
and former Chinese Ambassador
in Berlin, received the China-Europe
Friendship Award. The first award-winner
in 2004 was former German
Chancellor Helmut Schmidt.
Mei, director of the Chinese Institute
of World Development, was honoured
in recognition of his remarhable contributions
to European-Chinese relations.
In his speech in honour of the awardwinner,
Volker Stanzel, the German
Ambassador in Beijing, not only praised
Mei’s “long service to the Chinese
people” but also noted that “with the
long list of his publications he has
indeed helped to pave the way for Sino-
German relations.”
Deeply moved, Mei Zharong qualified
this praise a little. “My contribution
toward Sino-European friendship has
been modest,” he said. “That is why I am
also accepting the prize for the Chinese
people who have championed the cause
of friendship.” Politician Mei, born in
1934, said that while he had deep roots
in his own people he was well aware
how important friendship with
Germany and Europe was. “I have
repeatedly found,” he said, “that mentality
and culture are very different and
that it is necessary as a result to build
bridges.”

Supporting Programme
At the end of the opening day, participants
of the Hamburg Summit
went on a cruise on the Alster, a popular
lake that stretches from the city centre
to the outskirts of Hamburg. The
lakeside was lined with people, all of
whom were there to see the magnificent
fireworks display donated by
Hamburg’s twin city Shanghai. Such a
lavish display has seldom lit up the sky
over the Hanseatic city. A wide range of
glittering fans, dancing garlands, gigantic
flowers and crackling stars were
painted in the air and accompanied by
ear-splitting peals of thunder and quiet
showers of sparks. The spectacle went
on for more than half an hour, repeatedly
starting anew. In the end only the
people’s eyes shone as they gave the
display the applause it deserved.

Supporting Programme
One of the attractions in the
Chamber of Commerce building
was the “Hamburg Architects in China“
exhibition. It was dedicated to a single
project, the city of Lingang, designed on
the drawing board for 300,000 people
60 kilometres south-west of Shanghai.
It is under construction in an exclusive
location on the Pacific right next to the
newly opened largest container port in
Asia as a location for various new
universities and administrative centres.
The architecture is made in Hamburg.
“As if it were born out of a single drop”
is how the famous Hamburg-based
architect Meinhard von Gerkan describes
his master plan, which has been
under construction since 2002 under
the aegis of six Gerkan pupils, the
“Hamburg architects.”

Outlook by Conference Chairman Nikolaus W. Schües
Nikolaus W. Schües, Conference Chairman, Hamburg Chamber of Commerce
The Hamburg Summit: China meets
Europe wants to build bridges of
understanding and deepen business
relationships. Over the last two decades
the relations between EU and China
have gradually developed into a mature
strategic partnership. During this
period, both the European Union and
China have made significant progress in
diverse economic fields.
From the entrepreneurial point of
view – and we are talking business! -
this partnership should be based on free
trade and open markets, on fair transfer
of technology and know-how as well as
on cooperation in scientific and academic
research. This form of cooperation
meets China’s current strategic needs,
and it is also good for the European
Union that is constantly looking for
new markets and partners. The Sino-
European partnership is already a reality
- an economic and political success.
Our Hamburg Summit is an outstanding
opportunity to reflect on what has been
accomplished and what still remains to
be done. During the second summary
approximately 450 decision makers
from ten countries discussed the political
and economic issues with some
major results.
First of all China´s further integration
into global politics and the global
economy is inevitable, the economic
interdependence is a reality. The People´s
Republic is on its way to becoming a
global player, no one can deny China´s
growing influence. The European Union
should view the People´s Republic as a
strategic partner and give impulses in
order to forge a beneficial relationship
of equals.
China – second – is definitely a must
for most European companies. For some
firms facing growing competition from
China it is a question of survival to
arrange partnerships with Chinese
companies. The process of opening up,
which is a direct result of China´s accession
to the WTO holds new opportunities
in store. They should not be missed.
And finally the European Union
should support the Chinese government
in its endeavors to further reform the
economy, to enhance environmental
protection and establish a stable society.
The European Union has a lot of experiences
to share with China, for example
in creating a sustainable social welfare
system and successfully coping with
problems of social disparities. It is
exactly the aim of the “Hamburg
Summit” to offer a forum to exchange
ideas and experiences. Dialog is the
bridge to peace and sustainability.

Views on the Hamburg Summit
Quotes
“Since its inception the Summit has played an
important role in enhancing cooperation and
friendship between China and the European
Union.”
(Wen Jiabao, Premier of the State Council of the People’s
Republic of China, 13 September 2006)
“The Chamber of Commerce’s Hamburg Summit
was a success both nationally and internationally.
The Hamburg Chamber of Commerce can be
more than satisfied with the course of the second
Hamburg Summit – China meets Europe.”
(Die Welt am Sonntag, 17 September 2006)
“To us in China, protecting IPR is both an international
obligation and a requirement for promoting
China’s own development and enhancing its capacity
for independent innovation.”
(Wen Jiabao, Premier of the State Council of the People’s
Republic of China)
“You have good know-how but you need to show
Chinese partners how it will benefit them.”
(Fu Chengyu, CNOOC)
“This Hamburg Summit as I understand it is mainly
a meeting at which to share thoughts on international
economic ties and to exchange experience
just as much as fears, hopes, forecasts and suggestions.”
(Helmut Schmidt, Die Welt, 14 September 2006)
“There is practically no company or business
associations that is not backing the several-day
Hamburg Summit: China meets Europe intending
to improve Hamburg’s ties with its twin city
Shanghai.”
(Handelsblatt, 14 September 2006)
“Last year the EU took over from the USA as
China’s premier trading partner.”
(Xu Kuangdi, CFIE)
“In making more efficient use of resources China
is following the route that all industrialised countries
have taken and using relatively fewer
resources with increasing prosperity. But these
efforts are not enough to master the challenge
faced by all countries, industrialised and developing
countries alike – that of progressive global
warming.”
(Ernst-Ulrich von Weizsäcker, University of California Santa
Barbara)
“Investing in the Chinese market is investing in
the future.”
(Ulrich Ellerbeck, HSH Nordbank)
“Given the swift pace of development in China,
this conference in Hamburg is important. It is a
good match for Hamburg and for Germany. The
event will further intensify relations between
Germany and China and ought therefore to be
continued.”
(Helmut Kohl, 16 September 2006)
“What the Chamber of Commerce has now presented
is an enormous opportunity for the business
location Hamburg making the Chinese with
their immense economic potential even more
enthusiastic about the city.”
(Hamburger Abendblatt, 5 September 2006)
“Some countries have converted their industries
and now complement the products that China
exports, but this conversion has not been undertaken
in southern Europe. These discrepancies
make it more difficult to speak with one voice on
other important issues such as the protection of
intellectual property rights.”
(Mario Monti, Bocconi University)
“Economic development is limited not by financial
or human capital but by natural capital.”
(Klaus Töpfer, former Director of the United Nations
Environment Programme)
“This gathering, held every other year in
Hamburg, is a kind of Davos of the China trade.”
(FAZ, 14 September 2006)
“Frank speaking, longstanding commercial and
economic ties, the desire for cooperation and
understanding and to devise win-win situations
were the hallmarks of this second Hamburg
Summit between China and the European Union.”
(aktuell Asia, 10/2006)
“China wants not only to raise its vehicle production
but also to make sweeping changes to the
structure of its automotive industry. The objective
is to have one or two Chinese global players.”
(Bernd Gottschalk, German Automotive Industry
Association)
“In only a few years’ time China will account for
50 % of the world’s production capacity.
”(Ronnie C. Chan, Hang Lung Group)

Summit Speakers
Art of Illumination
• Enrique Barón Crespo, Chairman of the Committee on International
Trade, European Parliament, former President of the European
Parliament, Spain
• Laurence Barron, President Airbus China, P.R. China
• Michael Behrendt, Chairman of the Executive Board, Hapag-Lloyd AG,
Germany
• Lutz Bethge, Managing Director, Montblanc International, Germany
• Ole von Beust, First Mayor of the Free and Hanseatic City of Hamburg,
Germany
• Soledad Blanco, Director of International Affairs and the LIFE
programme, European Commission, Environment Directorate General,
Spain
• Cai Weici, Vice President, China Machinery Industry Federation, P.R.
China
• Ronnie C. Chan, Chairman, Hang Lung Group, Hong Kong S.A.R.
• Heinz Dollberg, Executive Vice President, Head of Asia Pacific Division,
Allianz Versicherungs-AG, Germany
• Dr. Karl-Joachim Dreyer, President, Hamburg Chamber of Commerce,
Germany
• Ulrich W. Ellerbeck, Member of the Management Board, HSH Nordbank
AG, Germany
• Jürgen Fitschen, Member of the Group Executive Committee, Deutsche
Bank AG, Germany
• Fu Chengyu, President, CNOOC, Executive Chairman, CFIE, P.R. China
• Diethard Gagelmann, Member of the Executive Board, International
Procurement, Otto Group, Germany
• Prof. Dr. h.c. mult. Meinhard von Gerkan, Managing Director, von
Gerkan, Marg und Partner, Germany
• Michael Glos, Federal Minister of Economics and Technology, Germany
• Prof. Dr. Bernd Gottschalk, President, German Association of the
Automotive Industry (VDA), Germany
• Guan Tongxian, President, Shanghai Zhenhua Port Machinery Co. Ltd.,
P.R. China
• Guo Wei, President, Digital China Holdings Ltd., P.R. China
• Dr. Richard Hausmann, President & Chief Executive Officer, Siemens
Ltd., P.R. China
• The Hon Robert Hawke AC, former Prime Minister of the Commonwealth
of Australia
• Ed Hotard, Chairman, Monitor Group, P.R. China
• Prof. Jean-Christophe Iseux, Special adviser to People's Government of
China, Director, Institute of World Economy, People's University of China,
P.R. China
• Jin Yun, Chairman, Shanghai Pudong Development Bank, P.R. China
• H.E. Ian Kemish AM, Ambassador of Australia to the Federal Republic of
Germany
• Steffen Klusmann, Editor-in-Chief, Financial Times Deutschland,
Germany
• Dr. Helmut Kohl, former Chancellor of the Federal Republic of Germany
• Lee Kuan Yew, Minister Mentor, Republic of Singapore (via satellite)
• Liu Changle, Chairman of the Board and CEO, PhoenixSatellite Television
Holdings Limited, Hong Kong S.A.R.
• Jutta Ludwig, Delegate, German Delegation of Industry and Commerce,
Beijing; Executive Director and Board Member of the German Chamber
of Commerce in China, P.R. China
• Dr. Werner Marnette, Chairman of the Board, Norddeutsche Affinerie
AG, Germany
• H.E. Prof. Dr. Mei Zhaorong, Honorary Director, Institute of World
Development, State Council of China
• Prof. Dr. Mario Monti, President, Bocconi University, Milan, Italy
• Peter Rieck, Member of the Management Board, HSH Nordbank AG,
Germany
• Alfred Th. Ritter, CEO, Alfred Ritter GmbH & Co. KG, Germany
• Prof. Dr. Eberhard Sandschneider, Otto Wolff-Director of the Research
Institute, German Council on Foreign Relations Germany, Germany
• Dr. Rainer Schäfer, Head of Country Risk and Emerging Market
Research, Dresdner Bank, Germany
• Helmut Schmidt, former Chancellor of the Federal Republic of Germany
• Nikolaus W. Schües, Conference Chairman, former President, Hamburg
Chamber of Commerce, Owner of F. Laeisz Shipping Co.
• Dr. Margot Schüller, Deputy Director, GIGA - Institute of Asian Affairs,
Germany
• H.E. Amplanavar Selverajah, Ambassador of the Republic of Singapore
to the Federal Republic of Germany
• Dr. Theo Sommer, Editor-at-Large, Die Zeit, Germany
• H.E. Dr. Volker Stanzel, Ambassador of the Federal Republic of Germany
to the People’s Republic of China
• Prof. Dr. h.c. Horst Teltschik, Chairman, Teltschik Associates, Germany
• John Thornhill, European Editor, Financial Times, Great Britain
• Prof. Dr. Klaus Töpfer, former Under Secretary General United Nations,
former Director General of the United Nations Office at Nairobi (UNON),
former Executive Director of the United Nations Environment Programme
(UNEP)
• Dr. h.c. Winfried Vahland, Executive Vice President of Volkswagen
Group, President & CEO Volkswagen Group China, P.R. China
• Prof. Dr. Dr. h.c. Ernst-Ulrich von Weizsäcker, Dean, Donald Bren
School of Environmental Science and Management, University of
California Santa Barbara, USA
• H.E. Wen Jiabao, Prime Minister of the People´s Republic of China
• Wong Wai Shing, Vincent, Joint Managing Director , Kerry EAS Logistics
Limited, Hong Kong S.A.R.
• Xie Qihua, Chairwoman, Baosteel Group Corporation, Chairperson of
Presidium, CFIE, Chairwoman, China Iron and Steel Association, P.R.
China
• H.E. Prof. Xu Kuangdi, Vice Chairman, CPPCC, President, Chinese
Academy of Engineering, Chairman of CFIE, P.R. China
• Yang Yuanqing, Chairman of the Board, Lenovo Group Ltd., USA
• Zhang Guangsheng, Vice Chairman of the Board, Shanghai Automotive
Industry Corporation (SAIC), P.R. China
• Zhang Yue, Chairman of the Management Board, Broad Air
Conditioning, P.R. China
• Zhao Xizheng, President, China Electric Council, Chairperson of
Presidium, CFIE, P.R. China
• Zhu Yanfeng, President, China FAW Group Corporation, Chairperson of
Presidium, CFIE, P.R. ChinaEconomics, Columbia University, USA
The City Hall and the Chamber of Commerce, two of the four buildings illuminated by HSH Nordbank during the Hamburg Summit
Red C Meets Blue E. This striking
“shorthand symbol” for the Hamburg
Summit: China Meets Europe was
impressively evident around the city.
While garlands of red Chinese lanterns
gave the Alster and its bridges a little
Asian flair, the major Hamburg Summit
venues were basked in a blue light.
From the City Hall to the Hamburg
Chamber of Commerce, people were
able to admire important city buildings
in a new light. As he had done two years
earlier enabled by the support of the
Exclusive Sponsor HSH Nordbank AG,
Hamburg-based artist Michael Batz and
the bank once more transformed the
central Hamburg Summit venues with
hundreds of floodlights into a sea of
blue in the corporate colour of the
sponsor. In the truest sense of the word
the Hanseatic city was shown in a
favourable light and so did justice to the
Hamburg Summit’s importance for relations
between Europe and China.