No pandemic stopping the Chinese train in Duisburg

Chinese trains arrive loaded in Duisburg. Even more convoys from China now call in Europe's great inland port than before the pandemic. “Chinese exports have recovered very quickly. We now receive between 45 and 60 trains a week, ”explains Martin Murrack, Head of Finance for the German City Council. This is a record number compared to 35 in previous times. While diplomatic relations between Europe and China are tense as a result of the management of an epidemic that has ended up infecting the entire world, trade relations are in excellent health at the foot of the road. The New Silk Road has outwitted the pandemic upon its arrival in Europe by train.

The realpolitik is felt with particular intensity in this city in western Germany. Here the Chinese are a sort of Mr. Marshall whom the authorities are trying to seduce. The Asian manna is conceived vital for the reconversion of this old mining town, which has not just taken off and that in some way represents the dilemma of other cities on the continent, eager for Chinese investments but suspicious of the political impact on the protection of rights and public opinion accompanying the Asian expansion.

Duisburg is the gateway to Europe for trains on the New Silk Road, through which Chinese goods arrive. It is the distribution center and from here the merchandise is loaded onto other trains, ships or trucks, which then travel through Europe. Italy, France, the United Kingdom or the Scandinavian countries are some of the final destinations of the products.

Noah Barkin, a researcher at the German Marshall Fund in Berlin, thinks that in Germany "there is a great divergence between the political debate, which has become more critical of China, and the economic relations on the ground." This divergence is accentuated by a pandemic that paralyzed the European economies and has driven them into a recession. “Germany sees China as a way out of the recession. China was the first country affected [by covid-19] and also the first to overcome it. German companies are very interested in recovering trade with China ”, he defends.

When the pandemic broke out, trains from Wuhan - one of the five places of origin of the convoys and ground zero of the covid - stopped for a couple of weeks, but soon resumed their routes. "My impression is that the Chinese are producing more due to the virus to make up for lost time," explains Daniel Thomas, from Duisburg Intermodal Terminal (DIT), who works at the port. Germany, he continues, is now receiving more medical supplies, such as a recent shipment to the UK of masks and protective suits for medical personnel. In return, fewer small appliances arrive and in general consumer goods, given the greater prudence of European consumers.

The volume of freight transported by rail is still much lower than by sea, but the general rebound in imports from China is evident. The latest data from the German statistics office indicates that in June most of the imports that arrived in the country came from the Asian giant, with an increase of 20.2% compared to the same month last year and 5.7% more than in the first six months of 2019. Furthermore, exports from Germany to China grew by 15.4% in June compared to the same month last year, which means that trade with that country is already playing an important role in the recovery of the German economy after the pandemic.

The economic interdependence between China and Germany is brutal. China was Germany's most important trading partner for the fourth consecutive year in 2019. Last year, bilateral trade amounted to just over 206 billion euros, ahead of the United States and the Netherlands. Data from the Federation of German Industry (BDI) further indicates that there are 5,200 German companies in China. German Chancellor Angela Merkel has traveled a dozen times on an official visit to China and has dedicated a central place to relations with the Asian giant in the current German presidency of the EU that began on July 1 and ends at the end of year. The great EU-China summit, initially scheduled for September in Leipzig, has been postponed, for the moment, pending the evolution of the virus to allow a physical encounter.

Links with Wuhan

In the rest of Europe Duisburg may be barely known or at best evokes the dirt and firedamp associated with coal, but in China it is the other way around: it is synonymous with the Germany of success and business opportunity. Chinese President Xi Jinping's visit to Duisburg in 2014 put the German city on the map for many of his compatriots. Johannes Pflug, commissioner for relations with China of the Duisburg Government, explains that in those years the Chinese had studied several countries, but finally they realized that the city was the ideal place to be very well connected with the rest of the continent. The city was conceived as a sort of crossroads by road, plane, train and also by river. The Netherlands is only half an hour away, Belgium one and France two and a half.

Duisburg has been twinned with Wuhan, the initial focus of the pandemic, since 1982; it is the oldest twinning between a Chinese and a German city. The City Council even has a large room dedicated to Wuhan where decorations and gifts from Chinese official delegations are displayed. Duisburg companies go to China once a year. And 60 Chinese delegations visit the German city every year.

Until 2013, Pflug, 73, was the spokesman for the Foreign Committee of the Social Democratic Party in the Bundestag and says that then the Chinese ambassador told him: “I have a surprise. Have you heard of the Silk Road? We want to make Duisburg the point of arrival ”. Pflug continues: “We traveled to Chongqing and there they gave us a presentation of the project and at the end of the train line there was Duisburg. We thought they were wrong, that Düsseldorf still wanted to say, but no ”. On March 28, 2014, the first official train arrived from Chongqing. Now the trains leave Xi'an, Wuhan, Yiwu and Shilong with a single destination: Duisburg.

The train takes about 16 days to arrive, depending on the starting point in China. The much cheaper ship takes between 30 and 40 days. From China comes electronic products, clothes, toys, Christmas decorations ... almost everything. Also motorcycles and electric bicycles, increasingly in demand in Europe. But the continent also exports. Among other goods, auto parts, wine, beer and chemicals. Germany exports textile machines to make clothes in China, which then returns to Europe, tracing one of those circles typical of globalizing dynamics. Technological advances in the form of refrigerated containers at 16 degrees Celsius have made it possible to expand the catalog of exchanges to perishable products.

Numerous containers are seen in the port, many with Chinese registration. The continuous movement of giant cranes is the spitting image of a large open-air factory on which a railway line opens onto which trains from China arrive. “The image of Beijing has not worsened with the [health] crisis. People don't stop wanting Chinese products. The appetite for doing business with China has not changed, ”Murrack explains. "There may be a mass of people who criticize how China has managed the pandemic, but here there are no changes regarding our relations." This municipal politician also considers that some accusations are unfounded: "The confinement decreed by the Government of Beijing was criticized, but then in Europe we did more or less the same."

Murrack is aware that close cooperation with China, no matter how necessary, is not without criticism, but stresses: “It is different here, because we have not sold anything to the Chinese. The port is 100% public property. One third is from the city and two thirds from the state of North Rhine-Westphalia, to which Duisburg belongs. We don't want to sell the infrastructure ”. It thus refers to the experience of the port of Piraeus in Athens, whose majority shareholding was acquired by Beijing and took over as a result of the 2008 financial crisis.

Industrial reconversion

Duisburg is located in the Ruhr area. It was one of those western German cities that prospered with mining, but languished with the arrival of industrial reconversion. Unemployment skyrocketed and with it social problems and a certain stigma, which still carries over the region. Replacing coal and steel with logistics, hand in hand with the Chinese, is a strategic decision that Duisburg are willing to exploit to the full, without complexes. “The logistics companies have helped us a lot in income and jobs. They do not have to be qualified positions ”, remembers Murrack in his office of the City council.

The large logistics terminal employs 6,000 workers in the middle of the cloud of companies associated with the large port infrastructure. Even so, unemployment is close to 12%, a figure well above the national average of 5.8%. A walk through the city makes it clear that there is no trace of the economic power that is breathed in German cities like Munich, Hamburg or nearby Düsseldorf.

Erich Staake, CEO of the port of Duisburg, believes that many in Europe "are afraid of Chinese investments" but he nevertheless believes that they are good for them. At the height of the pandemic, when it almost seemed that the world was going to end, the head of the port of Duisburg was optimistic, aware of the strong commercial link that unites them with Asian cities. Staake ensures that the port's goal is to achieve more volume and more containers of goods from China. In a crisis like the current one, the train becomes more attractive compared to maritime transport, which is less predictable and slower. The large logistics center that Staake runs benefits, in fact, from the river intersection between the Rhine and Ruhr rivers; and the infrastructure sits on the old steelworks.

“Now [the exchange] works much better than a few years ago. Little by little, bottlenecks such as the border with Belarus have been unblocked due to the gauge ”, says Daniel Thomas, from the Duisburg Intermodal Terminal (DIT) company, who works in the port. “The Chinese are interested in business and they know that Europe is a good destination for their products and that Germany is a strong economy. They are very pragmatic and want to have a base in Europe. Hamburg and Rotterdam [in the Netherlands] focus more on the ship and Duisburg on the train, ”he adds. Germany is also known for being a safe place where workers have a reputation for being efficient.

Pflug is a strong advocate of cooperation with China and has seen how relations with the Asian giant have changed radically in recent years. "They are also a magnet for other companies that think: 'if the Chinese come, we will go too." Pflug explains that the trade balance is gradually compensating. That if before 70% were trains that arrived loaded and only 30% left Germany for China, now the relationship is closer to 60% -40%. In the port, however, they assure that of every two trains that arrive, only one departs back and not all return full.

Strategic growth

In the consistory, the enthusiasm does not wane. “This is growing very fast and we want to build another port. We believe that in the coming years [the economy] will grow much more. It is not as big as steel production, but it is growing and we are interested in making [the Chinese] comfortable. The Chinese market is still growing a lot compared to Europe. And above all, there is a strategic growth in certain sectors, such as artificial intelligence; and we are keen to pave the way for Duisburg businesses. They at the same time have a lot of interest in our energy transition and in renewable [energies] ”, explains the number two of the council.

Kai Yu is a manager whose mission is to bring Chinese businesses to the city and ensures that they have managed to attract at least 20 companies in the last year, especially those dedicated to import / export. In the last three years it has received many requests from China, also to buy offices, industrial buildings and houses. "There is growing interest [towards Duisburg]," she says. Kai also talks about growing cooperation in sectors such as artificial intelligence, for example, for autonomous cars.

The political will to attract investors is there, but that this kind of Chinese Mr. Marshall does not pass by and take his goods elsewhere is the great challenge of the city. Duisburg is exploring its own path to achieve this. Pflug explains that they are now in what they call Phase III, in which the idea is for Chinese investments to revert to the city; and cites as an example the construction of two hotels and the Trade Center project, underway for a year near the port. That path is thorny, especially in relation to its collaboration with Huawei, the controversial Chinese telecommunications giant, a declared enemy of Washington for the development of the 5G network. Fears that Beijing is using technology to spy on its political and commercial rivals are also very present in the parliaments of the Old Continent, including the German Bundestag.

Students

The curious thing, however, is that the fervor of the dispatches for relations with China is hardly felt in the streets of Duisburg. Pflug says there are about 2,000 Chinese students in the area, very business-oriented. Susanne Löhr, director of the Confucius Institute in the Ruhr area, where they teach Chinese to Germans, points out that Chinese students were in the city before the New Silk Road, that there are many university engineering programs in this area and that that arouses a lot of interest among the Chinese. "They preferably go to the United States, but German universities have a very good reputation and there is collaboration with Chinese universities."

In the university cafeteria in Essen, two German students have a language exchange with three young Chinese women. The girls came last year from Wuhan University. One of them, Ruoheng Yuan, explains that she could have gone to study in France, but chose Germany because the economy is strong. "There are many famous German companies in China and they have a very good reputation." Chat with them David Missal, a young German who was expelled from Hong Kong, where he worked as a fellow at a human rights foundation. At the library doors there is a certain trickle of Asian faces coming and going with books under their arms.

The war to attract Chinese investors is not only fought with other European countries, but also with nearby cities such as Düsseldorf with a large airport and a thriving Chinese community. It has another great advantage for the Chinese: an incomparable gastronomic offer.

Two years ago, Stefanie Meyer was encouraged to set up a consulting company, dedicated to intercultural training with China. Meyer had studied Asian science and lived in China. When the city decided that it wanted to become a logistics hub, they created a network of entrepreneurs interested in contacting potential Chinese investors. “Duisburg wants to be an attractive place for Chinese investors. The idea is to attract more companies with their families to settle here. Little by little it happens, but it takes time. In China, they try to keep their wealth within the country. " Meyer also helps Chinese entrepreneurs deal with German society. It is not always easy. "The Chinese communicate in a very indirect way, but the Germans are direct and we can seem rude and rude."

Meyer says that there are also many differences when it comes to doing business, that the Chinese are hyper-flexible, while the Germans need to organize everything in advance. "Goals, deadlines, assigned tasks ... everything has to be planned." They now have their hopes pinned on the new German immigration law, which came into force in the spring and makes it easier for skilled workers to enter. Meyer works, among others, with German hospitals to teach them how to retain Chinese workers, to explain to them what they value. "The Germans have to understand that for many Chinese workers the factory is also the family," he says.

Huawei and national security

In Duisburg they are working with Chinese technology in a Smart city project, a smart city, but they recognize that it is still not clear how much can be implemented, because not everything that works in China, such as facial recognition, is applicable in Germany. Other projects such as smart streetlights or sensors in parking lots are more compatible. Martin Murrack, Head of Finance for the Duisburg City Council, also thinks that the wind is blowing in his favor and that if something has shown the coronavirus crisis, it is “that digitization is even more important. Even the most skeptical have noticed. Teleworking and the need to communicate digitally has increased ”.

Pflug makes it clear that this city is a case apart. “We have cooperated very well with Huawei for years. The EU and NATO must decide what is relevant from a security and strategic point of view. What cannot be is that in Berlin they dedicate themselves to preaching the benefits of digitization and then journalists come to ask us what is happening with human rights ”.

In Duisburg they work together with Huawei on a Smart city project, a smart city, but they acknowledge that it is still not clear how much of their technology can be implemented, because not everything that works in China, such as facial recognition, is applicable here. Other projects such as smart streetlights or sensors in parking lots are more compatible. Murrack also thinks that the wind is blowing in his favor and that if something has shown this crisis, it is “that digitization is even more important. Even the most skeptical have noticed. Teleworking and the need to communicate digitally has increased ”.

Pflug makes it clear that this city is a case apart. “We have cooperated very well with Huawei for years. The EU and NATO must decide what is relevant from a security and strategic point of view. What cannot be is that in Berlin they dedicate themselves to preaching the benefits of digitization and then journalists come to ask us what is happening with human rights ”.