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08/27/2010

China is pursuing the same strategy in the construction of power plants as it does in the automobile industry. At first, Beijing invited Western companies, mainly from Germany, to build power plants jointly with domestic companies. Now the Chinese are upgrading the plants with their own technology. The Waigaoqiao coal plant in Shanghai is a case in point.

Director Feng Weizhong is wearing a beige uniform with a shiny red party badge on his chest. But the impression that he is a party official is deceptive. Feng is China's most creative expert in environmentally friendly power generation using coal. The Waigaoqiao plant still looks shiny and new, as if Feng had just connected the plant to the grid. Against the skies over Shanghai, the smoke coming from the newest of the three tall chimneys looks almost as clean as a freshly laundered sheet. Feng, who has patented the technology for the filtration system, says proudly that it filters out a large percentage of pollutants

Waigaoqiao is almost overwhelmed with visitors. The plant, which is in the 1,000-megawatt class, is seen as a model project for other provinces that plan to build their own new coal-fired power stations or replace outdated plants.

Feng makes no secret of the fact that most of the technology used in his efficient power plant comes from Siemens and the French power generation conglomerate Alstom. Waigaoqiao is also an example of "indigenous innovation," he points out. "First we import foreign technology, and then we optimize it."

Close Cooperation

Thanks to his innovations, says Feng, he has been able to consistently reduce energy use. In this way, his efforts are in keeping with the "spirit" of the 17th Communist Party Congress in 2007, namely to turn China into a high-tech nation. At the time, the Chinese government also published a list of industrial projects with which the People's Republic plans to reach its goal by no later than 2020. The projects range from water purification plants to jumbo jets to biotechnology.

This is why Feng wants to continue his close cooperation with Siemens in the future, and he can count on the Germans to remain on board. Indeed, they have no other choice. If they hope to continue doing business in China, they have to share their own technology with their Chinese partners.

Western manufacturers no longer have access to contracts for smaller power plants in China, however. It is only with plants in the 1,000-megawatt category, like Waigaoqiao, that they are still permitted to compete for contracts.

The Germans are playing for time in China. Hence it's somewhat symbolic that Siemens has appointed a Chinese executive to run its business in the People's Republic.

Admittedly Mei-Wei Cheng, 60, is originally from Taiwan and has also lived in the United States. It's also true that other multinational companies have always installed local managers in the regions where they do business -- but their first obligation was always to the company and its shareholders. Beijing, on the other hand, sees the Siemens executive, who is believed to have close ties to the government, as one of its own.

The Need for Visions

China is not overly squeamish in its choice of methods to capture its spot in the global economy. That's something German engineering giant ThyssenKrupp learned when it became involved in a project that was long seen as a showcase of German innovation: the Transrapid magnetic levitation train.

The Düsseldorf-based steel conglomerate had spent a long time searching for a project that could serve as a showcase route for its magnetic levitation train. It finally found one in China. On New Year's Eve 2002, then-Chancellor Gerhard Schröder and then-Chinese Prime Minister Zhu Rongji inaugurated the first, 31-kilometer (19-mile) commercial test route, which now connects Pudong airport with Shanghai's financial district.

No one in Germany wanted the train, which travels at speeds of more than 400 kilometers per hour (250 mph), and it doesn't make much sense in Shanghai from the standpoint of transportation policy. But China's planners take a different approach. They know that visions are also important to an economy. The Eiffel Tower in Paris was just such a vision for the old world, and the giant Burj al-Arab Hotel in Dubai is one for the new.

The Chinese see the Transrapid as a collective inducement for its 1.3 billion people to eventually overtake their Western role models.

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• Part 1: The Dangers of Germany's Dependence on China
• Part 2: Risky Symbiosis
• Part 3: Growing Demand for German Consumer Goods
• Part 4: Warning Signs for German Industry
• Part 5: Optimizing Imported Technology
• Part 6: War of Nerves
• Part 7: Cultivating a Difficult Relationship