Germany’s Chinese Tiger
The CEO of China Telecom Germany, Mr. Jie He, looks back on five years of supercharged growth at his company’s HQ on the banks of the Main River, Frankfurt.
Germany is the number one target for greenfield investment from China in the world – €6.9bn was invested between 2000 and 2014 – and China Telecom Germany has been the direct beneficiary of this economic convergence. Since 2011 profits have grown annually, with a 75 per cent increase expected for 2016. CEO Jie He looks back on five glorious years.
“We’re the perfect example of how businesses are benefitting from the solid economic relations between Germany and China. These glorious years have been a golden decade,” says the normally reserved Mr. He with a big smile. “Many German companies invested in China and vice versa. Close bilateral economic relations led to a great demand for exclusive telecommunication connections among companies doing business internationally, to ensure business information can be transferred securely and seamlessly. That was our opportunity: the German market gave us the chance to offer our premium services to important customers and in doing so has significantly boosted our business.”
The German arm of China Telecom Europe has five data-processing centres and offers services in three areas: wholesale supply of China Telecom (CT) products and services to foreign operators (e.g. Deutsche Telekom, Swisscom and Orange), exclusive data connections for Chinese businesses and start-ups in Germany and German-speaking businesses operating in China (Gelita, Bosch, VW, Bei Qi Foton), and last but by no means least, ICT solutions in buildings and factories purchased in Germany by Chinese companies through mergers and acquisitions (M&A). As M&A accounts for the lion’s share of Chinese investment in the last five years, this factor alone might account for CT’s extraordinary success story.
»The last ten years have been a golden decade.«
CEO China Telecom Germany
Speed means efficiency
A graduate of telecommunications engineering, Mr. He established the branch office in Frankfurt single-handedly in 2008 to scout out new customers and marketing opportunities. China Telecom Deutschland GmbH was founded in 2010 with an initial workforce of just two. The team now consists of 32 staff and next year Mr. He anticipates they will need to double their office space. Company HQ is currently on the 15th floor of the Westhafentower on the Main river. Mr. He chose the location for its excellent accessibility, in the immediate vicinity of the main train station, highway and airport, enabling fast access to customers. The telecoms veteran knows better than anyone that “speed means efficiency.”
Unusually for a Chinese start-up, all employees, including Mr. He himself, were hired locally. The German staff look after the German customers and are responsible for marketing and project management, while the Chinese staff – who all completed their training in Germany – attend to the Chinese companies in Germany. All staff have Chinese language skills. “There are always cultural differences,” says Mr. He, “and only by remaining in constant exchange and engaging in team-building can we gradually eliminate all misunderstandings.” Every year he organizes advanced training for the German staff in China, to enable them to become more familiar with the culture and its people.
Mr. He’s advice to potential Chinese investors is first and foremost to respect the needs of the local market: the company needs to be based in situ and should utilize the local workforce, with all its advantages. Secondly, before investing, the German market should be properly researched so that suitable products can be customized or developed with a pre-defined strategy.