Economic Watch: A century-old German enterprise’s growth story in China

TIANJIN, Oct. 13 (Xinhua) — Over the past 28 years, Flender, a leading global supplier of mechanical drive systems, has flourished in north China’s Tianjin Municipality, growing from a small workshop with a dozen employees to a sprawling 255,000-square-meter facility with over 2,000 staff.
“The Tianjin factory has become Flender Group’s largest gearbox manufacturing base worldwide,” said Gou Jianhui, chairman of the board and CEO of Flender Ltd., China, at the group’s recent 125th anniversary celebrations, noting that this century-old German enterprise has regarded China as its “second home.”
Andreas Evertz, CEO of Flender Group, said that Flender in China has grown from a small unit to become a key part of the company’s global network.
“We have our own development capabilities, sourcing, manufacturing, ascending, and strong sales team to serve the Chinese market. We are very proud of our team and our business in China,” Evertz said.
China’s vast market and a resilient industrial chain have been key to Flender’s rapid growth. Goldwind Technology, one of Flender’s earliest partners in the Chinese wind power industry, has been in cooperation with the company since 1989, according to Li Fei, vice president of Goldwind Group.
A retired 150kW Flender gearbox still stands in Goldwind’s Beijing Yizhuang Smart Park, telling the story of Goldwind’s wind power journey and its decades-long partnership with Flender, Li said.
According to Gou, the company has nurtured numerous suppliers in China, becoming an indispensable part of the industry and supply chains.
As Flender explored the Chinese market, the upgrading of industrial structures and the concentration of innovative resources facilitated its transformation from a manufacturing company into a research and development-focused enterprise.
Dozens of engineers collaborate online daily with their German counterparts to develop high-quality products. For instance, the newly developed single-stage gearbox significantly reduces power loss and overall machine weight.
In China, Flender has undertaken 10 phases of capital increase and expansion projects, with a total investment of 3 billion yuan (about 424.5 million U.S. dollars), resulting in an annual output value of 5 billion yuan.
The Tianjin factory has become Flender’s largest and most competitive gearbox manufacturing base outside Germany, serving as the sole R&D hub for mechanical transmission in both China and the Asia-Pacific region, and playing a pivotal role in supplying global customers.
Continuous investment in China has become a vital strategy for German companies like Flender in their pursuit of growth.
According to a report issued by the German Economic Institute, direct investment from Germany in China reached a record high of 11.9 billion euros (about 13 billion U.S. dollars) in 2023. During the same period, German investment in China accounted for 10.3 percent of Germany’s total overseas investment, the highest level since 2014.
“China’s favorable business environment and comprehensive local services have bolstered Flender’s confidence in its long-term integration into the Chinese economy,” Gou said.
Flender’s success story in China is not an isolated case. The Tianjin Beichen Economic and Technological Development Area (BEDA), where the company is located, was founded in July 1992 and upgraded to a national economic and technological development zone in 2013.
Covering an area of about 50 square kilometers, BEDA is home to more than 10 German-funded enterprises.
“Flender has catalyzed the growth of numerous supply chain enterprises in Beichen, making an irreplaceable contribution to regional development,” said Ni Bin, Party secretary of the Beichen District of Tianjin.
Flender’s development has also reflected China’s market opening, as seen in the establishment of development zones, Ni added.
According to data from the Federal Statistical Office of Germany, China has been Germany’s top trading partner for eight consecutive years, with economic and trade relations between the two countries growing increasingly strong.
According to the Business Confidence Survey 2023/2024 released by the German Chamber of Commerce in China this January, more than 90 percent of surveyed German companies remain committed to the Chinese market, with 54 percent planning to invest in China within the next two years.
China’s market attractiveness is largely fueled by its innovation potential, with 37 percent of German companies saying that China’s appeal as an innovation hub is rising compared to other markets, according to the survey.
Rene Bernhard, member engagement manager of AHK German Chamber of Commerce Beijing and Tianjin chapter, said, “As a platform for business exchanges between China and Germany, we have about 2,100 member companies all over China and more than 500 member companies in north and northeast China.”
“For most German companies active in the international market, China is also one of the top markets for investment and operation,” Bernhard added. ■