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German Association calls for innovation to fight competition from Chinese companies
In an interview with Reuters reporters last week, Festeger, chairman of the German Machinery and Equipment Manufacturers Federation, said, 'We must always be vigilant. Companies must distance themselves from competitors from Asia through innovation.' Festeger emphasized German companies must always maintain their strengths. At the same time, it should also increase the products of medium and low price, and further expand the local production. The chairman of the Machinery Manufacturing Industry Federation believes that there will not be a large-scale wave of German companies acquiring Chinese companies or Chinese buying machinery manufacturing companies in Germany. German machinery makers typically invest 4.5 percent of their profits in research and development of new products and technological improvements, Festeger said. But quality alone does not guarantee success in occupying the international market. 'We also have to find the right mix to provide customers at all levels with products they can afford,' Festeger said. This can be achieved by partnering with local manufacturers. In addition, manufacturers can build protective walls for their high-end products by providing simple mechanical equipment. The Federation of German Machinery and Equipment Manufacturers believes that in 2014, the turnover of the global machinery manufacturing industry will increase by 5%. China also plays an important role here. Because China's machinery manufacturing industry alone is estimated to gain 7%. Still, German companies' acquisitions in China will be isolated cases, Festeger believes. Not long ago, German machinery maker Trumpf Group bought a majority stake in Jinfangyuan in China's Jiangsu province after two years of negotiations. Festeger said Chinese companies usually have a lot of employees but lack new technology, so investors are not interested. At present, there are about 200 German machinery manufacturers wholly-owned production in China, and sales and after-sales service companies are three times that number. Therefore, German investment in China is more than Chinese investment in Germany.