When it comes to competition in global markets, especially in exports, China and Germany are increasingly on a collision course. Germany was the number one exporter from 2003 t0 2008. In 2009 China overtook Germany to become number one — and it will stay there.

　　In 2010 both nations again showed strong export growth and defended their positions, well ahead of the US in exports. With remarkable similarities between Chinese and German exporters, the competition will be tough.

　　Hidden Champions

　　Why is Germany, a comparatively small country, so strong in exports? The explanation lies in its “hidden champions”, little known mid-sized world market leaders. My total count of these companies is around 2,500 worldwide, and 1,200 of them are from Germany. They alone account for about one quarter of German exports.

　　Surprisingly I found a rather similar structure in China. 68 percent of all Chinese exports come from companies with fewer than 2,000 employees — not from large corporations. It is also amazing that China already has well over 100 hidden champions, probably more than highly developed countries such as France, the UK or Japan.

　　Strong ambitions

　　One outstanding characteristic of these firms is their extreme ambition with regard to global market leadership. This is the aim that drives hidden-champion entrepreneurs in both China and Germany. In numerous talks in China I asked the audience, “Who wants to become world market leader?” Always more than half raised their hands, very similar to Germany. These ambitions will unavoidably lead to a competitive collision in the global marketplace.

　　Germans as low-price competitors

　　Globalization usually starts with exports and sales. Manufacturing follows, then R&D, and later on complete management functions. Most German companies are in the late stages of this process. They are not only building huge manufacturing sites in China, but also moving R&D for cheaper and simpler products there. Siemens and Bosch are well advanced on this path. Schenck Process, a world leader in industrial weighing and measuring processes, has even moved its complete competence centre for the mining industry to Beijing. The only way for German companies to remain competitive against the Chinese in the low-cost, low price-segment is to “become Chinese” themselves.

　　Tata Nano ‘German’

　　A very recent idea which I strongly advocate is that German companies should start to attack their Chinese competitors on the cost side. This requires radically simplified products, known as ultra-low-price products, and manufacturing in the lowest-cost locations. These are usually outside China, in countries such as India, Bangladesh and Vietnam. The Tata Nano car in India is a case in point. It is essentially a German car with nine German suppliers involved, Bosch being the biggest. The components delivered by the Germans were developed and are manufactured in India, not in Germany.

　　Chinese as high-value competitors

　　But we also see a movement in the opposite direction. The Chinese call it trading up. When I visited the concrete pump plant of Sany in Changsha, China, about a year ago, I was stunned. The first thing I saw in this ultra-modern plant (comparable only to a Scania plant I had visited near Stockholm shortly beforehand) were Mercedes and Volvo truck chassis. Expressing my astonishment, I got the reply, “We mount our concrete pumps on the best trucks in the world.” And it went on. I saw Deutz diesels, Bosch Rexroth hydraulics and controls from Siemens. Sany stated unequivocally that they use only world-class suppliers.

　　A few months later I met Sany’s General Manager Europe in Cologne, near to which Sany is currently building a greenfield plant — the first Chinese plant in Germany. My “Why?” question again found an interesting reply: “Sany has to be in a world-class manufacturing location. If we want to become world-class we must be in direct contact with the best global manufacturing and engineering talent.” In 2009, Sany overtook Putzmeister from Germany as the global leader in concrete pumps.

　　Sany is not a typical Chinese company, but it is a harbinger of things to come. I consider the Chinese the most serious competitors for the Germans in the future. But with their strong presence in China and other emerging countries, the Germans are well prepared for the looming fight.

　　Learning to learn:

　　文章最后一段點(diǎn)題，寫(xiě)出了德國(guó)面臨的挑戰(zhàn)也存在機(jī)遇。這種內(nèi)涵，作者是通過(guò)兩層轉(zhuǎn)折成功實(shí)現(xiàn)的，學(xué)習(xí)這種寫(xiě)作手法，為以后高階寫(xiě)作打好基礎(chǔ)。

　　Language Points:

　　1. collision 碰撞 2. manufacturer 制造商

　　Exam Focus:

　　1.Which statement is Not true about “hidden champions”?

　　A They are little know mid-sized world market leaders.

　　B They play an important role in Germany’s strong export.

　　C Nearly half of them are from Germany.

　　D They contribute to 68% of all Chinese exports.

　　2. Does the author have confidence in German’s ability in dealing with Chinese enterprises’ challenge?

　　A Yes B No C Not given.