Social Sciences in China, 2019

Vol. 40, No. 1, 2019

China-Germany Industrial Cooperation in the Context of the Belt and Road Initiative—An Analysis Focusing on Shandong Province

(Abstract)

Zhang Shucun and Gu Chuntai

At present, economic decision-makers and theorists predict that the robust alliance of “German technology” and “made in China” will reach new global heights through the development of intelligent manufacturing. However, the path to the realization of this prediction is still being explored. Shandong is a microcosm of China’s economic development and China-Germany cooperation, so the province can be analyzed as a representative example of the industrial choices and implementation strategies of this cooperation. In practice, China-Germany industrial cooperation should take into account industries where Germany has an advantage and the industrial development priorities and future growth potential of China and Shandong. We should thus focus on raising the quality of German investment and attending to its spill-over effects. The findings of a quantitative analysis of Shandong’s industrial gradient coefficient and industrial correlation show that the future alignment of German and Shandong industry should adhere to the principle of “emphasizing key points and storing up resources for the future.” For this reason, we should not only strengthen the key fields of Shandong’s industrial alignment with Germany, but also actively cultivate areas with potential. Research on the pattern of German investment in China indicates that German companies’ choice of investment location has certain distinctive features. The factors that matter most in attracting German investment are the concentration of German first-comer enterprises in the host country, the shape of the business environment and the level of human capital and regional science and technology. For this reason, against the background of the Belt and Road Initiative, Shandong’s alignment with German industry should focus on building industry chains, constructing investment platforms and shaping the external environment.

Keywords: Belt and Road Initiative, industrial alignment, pathway