Investing in China: What makes Taicang a hot spot for German companies

This March, Jiang Xiaohua and Christopher Praetzas moved into an apartment for talents in Taicang, a small city in east China's Jiangsu Province. For the couple, Taicang means more than the birthplace of their baby. The city also holds the future of their start-up company of automotive technology.

"Passenger car sales in China account for about a third of global sales, so it's a very big market. Chinese brands are going high-end and smart, so I see a big opportunity here," said Jiang, Praetzas' wife, who has been in automobile manufacturing for most of her career.

The couple lived in Germany before relocating to China. They spent three years learning about Chinese markets and policies.

"Taicang has a strong supply chain for the auto industry, including some German companies who were our partners," Jiang told China Media Group (CMG). "There are also a lot of resources and government support for start-ups so that they can operate quickly. So, we chose to come here."

Their factory opened last June, and the couple feels that life in China is becoming more convenient with the recent implementation of more measures to optimize work, residence and payment for foreigners staying in China.

Located less than 50 kilometers from Shanghai, Taicang is known as the hub of German enterprises. It boasts 500 German companies and more than $6 billion in German investments, making it one of the most popular destinations for German companies in China.

Kern Liebers was one of the earliest German companies to recognize Taicang's business potential. Commencing with a 400-square-meter rented factory and a team of six employees in 1993, this major producer of car seat belt springs has since embarked on 11 successive rounds of investment in Taicang. Today, its Taicang facility spans 70,000 square meters and yields an annual output value of around 1.5 billion yuan (over $208 million).

In January 2024, Beumer Group became the 500th German company to settle in Taicang, which is considered a milestone in Taicang's cooperation with Germany.

Over the past 30 years, Taicang has consistently strengthened cooperation with Germany, ranging from economy to culture and education. In addition to its location, convenient transportation, and improved business environment, Taicang attracts skilled workers, which is another draw for German enterprises.

Spring is a vital job-hunting season for most graduates in China, but Gu Xinyi doesn't have to go through the painful process. A graduate of Suzhou Chien-shiung Institute of Technology, Gu has already secured a position in a German company.

Gu said he could do so because of the special vocational education model at school. During his three-year training, he acquired all the skills required to work in a German enterprise. Before graduation, he obtained a certificate issued by the German Chamber of Commerce and Industry (DIHK) to prove his professional knowledge and skills.

Germany's dual system of vocational education and training is highly recognized worldwide due to its combination of classroom theory and real-life work environment training. Taicang has used the German dual system talent training model to meet the rising demand for skilled workers in German enterprises since 2006.

"In simple terms, the dual system means that our students are trained by the school and the enterprise together," said Su Xiaofei, secretary of the Party Committee of the Suzhou Chien-shiung Institute of Technology. He added that enterprises seek higher levels of education quality since they train the students as future employees.

This type of educational cooperation between German enterprises and local vocational schools has also been encouraged and supported by the Chinese government.

According to a report on German business confidence released by the German Chamber of Commerce in China in January, over 90 percent of the German companies surveyed plan to continue to take root in the Chinese market, and more than half plan to increase investment in China in the next two years.