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July 26, 2004

From China to Frankfurt


by Sascha Matuszak

Frankfurt's Cathedral looks out over the Main River and over into Old Sachsenhausen, as it has for the past 400 years – a focus point for artists and authors, medieval farmers and merchants, Cold War GIs, Turkish and Colombian bars and, most recently, East Asian tourists.

Deeper in Sachsenhausen, retired Germans drink Applewine out of Bembels and munch on Bloodwirst and Handkase. Schweizer Street is lined with old traditional Frankurt-style establishments that cater to the still rich retirees and young professionals that have the time and money to enjoy the many-faceted leisure options Frankfurt has to offer. Impeccably dressed and groomed, these affluent Germans predict the end of the good times, in typical pessimistic Teutonic style.

"It's all going downhill," say the old men. "We're paying for the Ossis [East Germans], the Southerners [EU members Italy, Greece, Spain, etc.], all the asylum-seekers and jobless, and now all us old people, too!"

A typical employee at a typical German firm will see 40% of his salary head off through various government channels into the pockets of other people. Germany's population is expected to grow at a blistering 0.02% in 2004 – the median age hovers around 40 – there are just not enough young people to pay for all the pensioners.

The young East Germans were promised jobs in a Schroeder campaign speech, but West Germans still find themselves paying a 10% Solidarity Tax – as much as $70 billion a year is transferred from West to East.

Germans are proud of having a welfare state in which nobody starves, but the squeeze being put on by demographic realities and increased immigration, as well as an unemployment rate that refuses to go any lower than 10%, is turning pride into frustration.

The Euro has everybody simmering – it seems as if all the prices remain the same, but the salaries were cut in half. "Teuro" (teuer means expensive) describes the state of affairs in Germany these days: smokes are 4 Euro. Phone calls are ridiculously expensive, leading to an explosion of "special numbers" and a website that helps people find the cheapest way to call. Everybody is feeling the bite, the German Public Transportation used to be quite lax on "black riders" – those who did not buy tickets but took the subway anyway. Now there are controllers everywhere and the penalty has risen from 40 DM to 60 Euro. Big companies, claiming stiff competition and a poor economy, are laying workers off by the thousands and moving production to Asia. A domestic solution to Germany's economic woes is complicated and nigh impossible: to dismantle the welfare state would mean having millions of Germans and foreigners taking to the streets and international speculation on the rise of the Right– an ever-present shadow in Germany.

China, with big markets and cheap, docile workers, seems to present the only hope for sputtering, aging economies like Germany's.

'We Don't Need a Tour Guide, We Live Here'

Chinese tourists were cleared by Beijing to travel to Germany earlier this year – already Germany expects 600,000 to flow through this year. One can already see groups of Chinese tourists mosey on down from Hauptwache – Frankfurt's main shopping district – through cobblestone alleys past cafes and art shops to the Romer, where ancient ruins and brick-and-wood Germanic buildings (including Johann Wolfgang von Goethe's former residence) share the plaza with the art museum and yet more cafes.

When I joked to a couple of young Chinese that I could show them around my hometown, they replied indignantly that they didn't need me – "we live here." Chinese migration to Europe has been increasing steadily since the PRC opened its doors – and Germany is second to Italy in the number of Chinese asylum seekers and immigrants per year. There are more than 30,000 Chinese students in Germany and German is creeping up on English in Chinese universities.

'China Is In'
China surpassed Japan in 2002 as Germany's largest Asian trading partner – the two countries amassed 41.9 billion in trade in 2003, a growth of 50.7% from 2002 and 40% of China's overall trade with EU countries.

Germany for its part has invested $850 billion in China, including three VW factories, the Transrapid train from Shanghai to the Pudong Airport, a BMW factory in Beijing and several projects in the hinterland – including a Bayer production facility, Kempinsky Hotel and a new General Consulate in Chengdu.

There are more than 1,500 German companies doing business in China, including the Frankfurt Messe, which has been active in China since 1987. The Messe organizes more than dozens of fairs per year in China covering the gamut of products – the Messe has an office in Hong Kong, Taiwan and Shanghai and recently opened another one up in Beijing.

German businessmen at the Holiday Inn in Chengdu gush over the possibilities here in China – the vitality of the people and the ability to "do anything" shakes the German down to his very core. The situation back in Europe has stagnated to the point that any mention of Asia in general makes everybody stop what they're doing and listen up.

"China is in," says 60 year-old businessman Herr Jung. "I only come back to Germany to pay some taxes and eat a rumpsteak"

Red Light Green Light

The Social Democratic Party and the Green Party currently run Germany's government in a Red-Green Alliance. The ruling coalition parties' economic policy has the people grumbling in the streets; the inability of the Red-Green Alliance to pump energy and optimism into the German economy has the opposition Christian Democratic Union on the offensive.

A bid by Daimler-Chrysler to pit two factories against each other to cut costs, a failed bid to sell a fallow plutonium plant and German Foreign Minister and Green Party leader Joschka Fischer's visit to China are unsettling in a time when Germany's future is uncertain and the past keeps returning.

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  • Sascha Matuszak is a freelance writer living in Chengdu.

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