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2011-11-14 | South China

European companies confident of China market
Shenzhen Daily, 14th November 2011

THE debt crisis in Europe might have affected the business of European companies, but it did not affect their confidence in the Chinese market.

    According to a survey by the European Chamber of Commerce in China, most European companies in South China are highly confident of the Chinese market and many increased investment this year, Holger Kunz, chairman of the Pearl River Delta Chapter of the European Union Chamber of Commerce in China (EUCCC), said Friday.

    Kunz, who is vice president of the Greater China branch of TUV Rheinland Group, a global provider of technical, safety and certification services headquartered in Germany, moved the office of TUV Rheinland (Shenzhen) Co. Ltd. to a 7,000-square-meter office building at the Shenzhen High-Tech Industrial Park in August.

    The facility is one of the most comprehensively equipped inspection and testing centers for consumer-product safety in South China.

    The growth of TUV Rheinland (Shenzhen) is a successful example for foreign companies in Shenzhen. In 16 years the company grew from four people to one with 337 employees and serving nearly 10,000 exporters.

    “The debt crisis affects the whole industry with the slowdown in exports. It has had some effect on our business but, generally speaking, we are doing well,” he said.

    “We are still growing, though not as fast as a few years ago,” said Kunz. “That’s the best you can get. It’s very hard to grow these days,” he said.

    Kunz attributes the company’s growth to a diversified market strategy. While some traditional markets were shrinking, testing markets for areas like PV were increasing, said Kunz.

    Shenzhen’s exports of major consumer products in the first three quarters of the year was 17.4 billion euros (US$23.93 billion), an increase of 19 percent from a year ago. The growth is lower than the general growth rate by 10.1 percent, however.

    “Chinese companies are turning to local markets and changing direction from traditional manufacturing to high-tech areas. Service industry will increase in number. There will be more sourcing companies in Guangdong,” he said.

    TUV Rheinland (Shenzhen) is adapting to the changing market. It is stepping away from traditional safety testing to fitness-for-use testing and it is shifting focus from the export market to the local market. “The percentage of business [for the local market] is still quite low, because most certifications in the Chinese market are controlled by the government,” he said. But he was confident the market would open in the long run.

    Kunz believes China’s 12th Five-Year Plan (the social development plan for 2011-2015) will present a lot of opportunities and environmental protection is one area that has high potential for European companies. That is why TUV Rheinland (Shenzhen) launched energy and environmental services as early as 2008.

    “We try to accommodate green services in all sectors, from production to the recycling process,” he said.