As of: April 8, 2024, 8:18 a.m
By: Sven Hauberg
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Cars, space travel, medicine: companies from China and the USA dominate the global economy, Germany is lagging behind. An expert says what we have to do now.
Germany as a technological superpower – that was once. Today, China exports more cars than any other country in the world, and the USA dominates the Internet with companies like Amazon and Google. Europe looks on helplessly. In an interview, China expert Wolfgang Hirn explains what Germany did wrong - and what we can learn from the Chinese. Hirn was editor of
manager magazin
for years , most recently he published the book “The Tech War: China vs. USA – And where is Europe?”
Production at the car manufacturer BYD: China's car manufacturers are gaining more and more market share. © AFP
Mr Hirn, in your book you write: “We rate the Chinese too poorly and ourselves too well.” You can probably only shake your head at the still widespread prejudice that the Chinese can only copy.
It's true: the Chinese have been copying for a long time. Just think of the auto industry, where China forced Western companies into joint ventures and stole a lot of technology from them. This is what Chinese economic policy looked like back then. But those days are over, and many people here haven't noticed that. China is no longer just the copier, but is also at the forefront of some technologies - in electric cars, for example, or in autonomous driving.
And where do we overestimate ourselves in Europe?
This is an accusation I make against politics, not the economy. Many companies, large and small, are present in China and know what is happening there. In politics, however, very little is known about China. Everyone has a clear opinion, but it is based more on clichés than on sound knowledge. I sense a mixture of arrogance and ignorance. Here in Berlin I see who in German politics has China expertise - I can count them on both hands. It is significant that neither the economics minister nor the research minister have been to China yet.
Wolfgang Hirn was a reporter for “manager magazine” from 1985. The economist and China expert is the author of several books about the People's Republic. He most recently published “The Tech War: China vs. USA – And where is Europe?” He also publishes the newsletter “Chinahirn”. © Manfred Segerer/Imago
For a long time, no one in this country wanted to believe that China could one day seriously compete with our car manufacturers. Today the country is the largest car exporter in the world. Do you still have hope for VW and Co.?
Things will be extremely difficult for German manufacturers. VW is now trying to gain market share with cheap electric cars, but that is coming far too late. I don't think VW will get a foothold in the Chinese market anymore. Things will also be difficult for German manufacturers in the luxury segment; they have missed this just as much as the Americans. They thought that for a long time the Chinese would prefer to buy foreign cars instead of their own, but that didn't happen. And they have relied on combustion engines for too long.
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“We are practically always in third place, behind the USA and China”
What did the Chinese do better than us?
The Chinese decided ten or twelve years ago: We would rely on e-mobility. And then they drew the consequences. If you want to build electric cars, you also need batteries. And anyone who wants to build batteries needs the appropriate raw materials. And the Chinese have approached both strategically. Our manufacturers, on the other hand, said: We simply buy batteries from suppliers, just like we do with brake pads. And that is now taking revenge. Today, Chinese battery manufacturers like CATL are global leaders.
Germany also seems to have lost the connection when it comes to autonomous driving.
In China, autonomous taxis drive through the cities, and we are happy when an autonomous shuttle drives a few meters through the area in Hamburg. We are the car nation, but we are lagging behind when it comes to autonomous driving. The Chinese and the Americans are in the lead. We have lost touch with many technologies. We are practically always in third place, behind the USA and China.
Where else?
The Europeans don't play a big role in space; we don't even have our own launch vehicle anymore. Or in biomedicine – we Germans were once the pharmacy of the world, but that is over. Biontech's success doesn't change that much. It's no different with digital companies, where you have to scroll very far back in the rankings of the world's largest companies to find companies from Germany or Europe.
How could it come to this?
In Germany we have good basic research. We have the Max Planck Societies and the Fraunhofer Institute, we have great universities. The problem is that we are no longer able to turn good ideas into marketable products.
“Our politics thinks in four-year cycles, that’s the disadvantage of a democracy.”
Why not?
Maybe because we have become a fed up society. China, on the other hand, is still a very hungry society. A lot of things in the country remind me of the 1950s and 1960s, of the spirit of optimism that we had in Germany and into which I was born. We always wanted more: more progress, more consumption. It's over. What we lack is the entrepreneurial spirit.
And in the USA?
The USA is also a nation that has a few decades under its belt. But immigration ensures that the country does not stand still. Look in Silicon Valley and see how many Chinese or Indians work there. We do not have this type of immigration and are not able to become attractive to immigrants. In addition, the Chinese – and the Americans too – are very tech-savvy. While we still have concerns, they're just trying it out. A good example is payments via smartphone, which can be made anywhere in China. In Germany people still rely on cash, we are many years behind.
They first visited China in 1986. Was it somehow foreseeable back then where China would be today?
No not that. But I still remember seeing a model of the planned new Pudong district in Shanghai in the late 1980s or early 1990s (now the city's modern economic district, ed.). My first thought was: They're crazy, they'll never build that. But they did it. The Chinese think bigger than we do. And they think more long-term. Of course, this is also due to the political system, where everything is dictated from above. Our politicians think in four-year cycles, which is the disadvantage of a democracy.
“We need a strategically independent Europe”
But we can hardly use the Chinese system as a model.
No of course not. But what speaks against democracies also adopting long-term strategies? They may not be enforced as brutally as in an authoritarian system. But we can also identify future technologies into which we then invest state money, just as Beijing does. Industrial policy has always been frowned upon in Germany; it supposedly doesn't fit with a market economy. At least that is slowly changing. But we also need increased European cooperation, we need to cooperate much more closely on future technologies. At Airbus, despite some problems, it worked quite well.
Where would a “second Airbus” be needed today?
For example in chip production. With ASML in the Netherlands, we have the world market leader in Europe for chip manufacturing machines, and we have top researchers in Belgium. Nevertheless, Europe only has a global market share of perhaps ten percent for chips. Because each country is trying on its own to attract large chip manufacturers with billions in subsidies. In Europe we compete with each other instead of working together. Now the EU wants to increase our share to 20 percent. Nice, but then we still have a dependency of 80 percent.
The Americans are trying to keep China down with trade restrictions. Should Europe join in?
We as Europeans should articulate our interests more strongly, towards the Chinese, but also towards the USA. Of course we share the same values as the US, but that doesn't mean we have the same economic interests. If the Americans think they have to go into a tech war against China, we have to think very carefully about whether we want to be drawn into it. Because we Germans in particular are much more susceptible to countermeasures from the Chinese, given our dependence on exports. We need a strategically independent Europe.