Hugging the Panda: Gerhard Schröder Opens Doors for German Companies in China

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Schröder refuses to discuss his private business dealings. When asked about them, he gets as touchy as he famously does about claims he dyes his hair. For example, he admonished LobbyControl, an NGO, for reporting that he was an adviser to the China's Ministry of Foreign Affairs.

But that claim was not all wrong. On May 14, 2007, Chinese diplomats had asked Schröder for help in converting their old embassy building in Bonn into a center for traditional Chinese medicine. They even presented "Chancellor Schröder" with a certificate of appointment as an adviser.

"He is here constantly, traveling to cities no one has ever heard of," says a German diplomat in Wuhan, who preferred not to be named. "We keep getting requests to provide personal security details." The embassy then has to ask for permission that the two bodyguards are allowed to bring their weapons.

Since March 2006, the Chinese press has reported on eight visits by Schröder. But he also appears to occasionally visit the country without showing up on any radar. A few days before arriving in Wuhan, for example, he was in Xuzhou, a large city in eastern China, where he dedicated a German-Chinese research center for energy and environmental protection in the mining industry. Then he visited Beijing briefly. From there, he traveled to St. Petersburg, 6,000 kilometers (3,750 miles) away, before ultimately returning to Wuhan via Shanghai.

Schröder is not above paying a visit to an eastern Chinese men's clothing manufacturer -- in return for a generous consulting fee, of course. In November 2007, a textile company in Wenzhou named Fapai hired him to help it figure out how to internationalize its brand.

For the wise "Mr. Shiluode," as the Chinese call him, the answer was simple enough. "Quality is the most important factor," he told the local tailors. And the second-most important factor, he said, was having "talented people," followed by "sustainable" products.

"That was the most expensive presentation Wenzhou has ever paid for," the Wenzhou Trading Newspaper wrote the next day, calculating that each word that came out of Schröder's mouth cost the company about €100 ($148).

'Everybody Loves Pandas!'

Schröder left Wuhan on Sunday morning, but not before singing the praises of his Chinese host once again at an official symposium in the Renaissance Hotel: "The environmental modernization of the country has begun." Then he boarded Herrenknecht's private yet, a Cessna Citation Model 525A, for a flight to Chengdu, the capital of Sichuan province.

In Chengdu, Herrenknecht is bidding on contracts for new subway lines, and Schröder wants to lend a hand. "We're going to dig in our heels here," Herrenknecht says.

City officials sent a black Mercedes 600 to pick Schröder and Herrenknecht up. Five other limousines, filled with bodyguards and officials, escort them to the Hotel Shangri-La. An elderly man, looking exhausted, has just sat down in an armchair in the lobby. He is wearing a light-colored straw hat decorated with a small feather. Lu Qiutian, a former Chinese ambassador to Germany, was sent here from Beijing to accompany Schröder on his visit.

Schröder has just returned from a luncheon at the Shang Palace restaurant. Lu jumps up from his chair. "Now we will go see the pandas," he shouts. "And, this evening, we will meet the governor of the province and the mayor." Later in the day, Schröder delights his hosts by exclaiming: "Everybody loves pandas!"

Returning the Favor

The next morning, Herrenknecht is waiting in the lobby for his celebrity benefactor. Schröder's efforts are completely altruistic, the businessman insists: "He asks for nothing. I don't even know why he's doing this for me."

But in the world of drills and gas pipelines, a world familiar to both Herrenknecht and Schröder, people are constantly crossing paths, and Herrenknecht will eventually be able to return the favor. It might even be in Russia, where Schröder has many important friends and Herrenknecht has two subsidiaries.

The Cessna, with the two men on board, takes off for the southern provincial city of Kunming, where Herrenknecht wants to dig more subway tunnels and where, once again, the governor will be there to greet them.

From Kunming, Herrenknecht will travel to Singapore. "A night flight," he says, "on a commercial airliner." Herrenknecht's private jet is already booked -- the German businessman is letting Schröder fly home to Hanover in it.

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• Part 1: Gerhard Schröder Opens Doors for German Companies in China
• Part 2: The Man with the Golden Tongue