Hiring and retaining qualified staff is one of the main challenges for German companies operating in China. Chinese employees have become more international than in the past due to their study and work experience abroad, which reduces cultural gaps. In this issue of German Chamber Ticker, we will also take a closer look on the Labor Market and Salary Report that has recently been published by the German Chamber of Commerce in China. Furthermore, experts will share their insights on management structures and leadership models keeping employees motivated and engaged especially in these changing times. We hope you enjoy reading it.

Yours sincerely,

Cover Story 1 - A State of Lasting Disengagement

Engaging Employees Through Good Management


For the past ten years, I have been working in an international architecture firm in Shanghai. Looking back, what impresses me most is the incredible speed at which this city is evolving. There are the obvious changes to the urban landscape: The newly built high-rise buildings, elevated highways, subway lines and traffic hubs. However, the less obvious and possibly the more important ones, are the changes to the social fabric. Lifestyles and biographies are changing dramatically and this has a profound impact on the workplace.


Cover Story 2 - Home: The Invisible Battlefront for Working Women in China

2016 White Paper on "Women, Work and Happiness"


In her 2013 book entitled Lean In: Women, Work, and the Will to Lead, Facebook COO Sheryl Sandberg encouraged women to “lean in” and actively pursue their goals. In May 2013, ten women from different professions in Beijing each inspired by Sandberg’s message came together to establish China's first Lean In community. A survey they conducted in 2013 showed that many Chinese women felt that their top three professional challenges were that they lacked self-confidence, could not find enough approachable role models, and were not good at establishing networks and meaningful connections beyond their usual social circles. Over the next three years working with Chinese women, Lean In China learned the following... 


Cover Story 3 - Unleashing The Intrinsic Power of Organizations

Facilitation and Facilitative Leadership


Change is a challenge that organizations are constantly faced with. In an ever more competitive market, teams must become more agile, creative and flexible. Finding ways of working and creating more collaborative and innovative cultures, to cater to such reactivity, is vital for companies. Attracting and retaining talent remains one of the key challenges that companies operating in China face. In addition, the millennial generation joining the workforce is demanding more alignment with their personal values, such as more freedom and autonomy. Providing for meaning and authenticity is key. How to foster employee engagement keeps managers and HR specialist alike on their toes; at the same time, finding ways to leverage that diversity would be beneficial.



Cover Story 4 - China’s Cooling Economy Impacts Wage Increases at German Companies

Results of the German Chamber of Commerce in China’s Labor Market and Salary Report 2016/17

by German Chamber of Commerce in China

Nearly two decades of rapid economic expansion transformed China into the world’s second largest economy and the largest exporter. Nowadays, the country is at a turning point, moving from an exportoriented and low value-added economy to one that focuses on domestic consumption, high-value added manufacturing and the services sector. In this transition, China is moving towards a more sustainable growth model.  

The “Made in China 2025” initiative aims to readjust China’s manufacturing focus on sectors such as industrial automation, medical devices and new information technology in order to enhance the country’s overall manufacturing competitiveness.



Cover Story 5 - Understanding Agile

What it Means and How to Get There


In September 2016 Daimler CEO Dieter Zetsche in an interview with German newspaper FAZ publicly announced wide-reaching changes in the organizational setup and decision-making process of his company. Some news agencies reported that Daimler wanted to operate like a startup. Indeed the ideas put forward in the program “Leadership 2020” sound typical of small innovative companies: Fast decisionmaking and autonomy on the individual as well as team level. Strikingly the terms “agile” and “agility” appear in various contexts within Daimler’s change initiative. Agile is supposed to be one of the future leadership principles, and it is planned to be a feature of the organizational setup and the decision-making process.



Cover Story 6 - Maintaining Motivation and Momentum

Success in Change Leadership


For competitive, agile and future-oriented organizations change management has become the center of modern leadership. However, it is not sufficient to simply have basic change management skills and tools in place. To make change management a core organizational capability and embrace change as a corporate value organizational members live by, leadership development and change management must mesh. Ask five executives, which are the most crucial success factors in leading change and you will most probably receive five different answers. 


In the Spotlight - Doing Business in China – From 1866 Until Now

History as a Signpost to the Future

Interview with Mr. Matthias Claussen, Managing Partner of C. Melchers GmbH & Co. KG

by Jens Hildebrandt and Melanie Lindstaedt

Mr. Matthias Claussen is managing partner of C. Melchers GmbH & Co. KG, a private owner-managed trading company founded in Bremen in 1806. After training in the banking sector and completing a degree in law, Mr. Claussen began his career at Melchers in Beijing in 1984. Since 1990 he has been a managing partner in Bremen. He understands the Asian market as well as the culture and people here and has been playing an active role in promoting bilateral relations between Germany and Asia...



Features 1 - Foreign Investment Regulations and Supervision & Protection of State-owned Assets

New Developments of PRC Law


In the past few months, new regulations concerning the regulatory regime for foreign investment and transfer of State-owned assets were issued in China. Below is an overview on the key contents of the new regulations. 

1. New Regulatory Regime for Foreign Investment in China 

On 3rd September 2016, the Standing Committee of the PRC National People's Congress adopted a decision to revise the three laws governing foreign invested enterprises in China, i.e. the PRC Law on Wholly Foreignowned Enterprises, the PRC Law on Sino-Foreign Equity Joint Ventures and the PRC Law on Sino-Foreign Cooperative Joint Ventures (collectively “FIE Laws”).


Features 2 - Difficult, but not Impossible

Image-Building and Media Strategy in China


China remains a driving force for the global economy, even as its recently lower growth rates have somewhat tarnished the public perception. An ever-growing middle class fuels domestic consumption, which currently accounts for 73.4 percent of the country’s economic growth, according to official numbers. Per-capita income is increasing rapidly, offering western companies high sales and growth potential on the Chinese market. The amazing development of the last few decades makes China the most important single market of the world, with outstanding potential. Western companies have made significant inroads into China by learning, adapting, and cooperating. 


Features 3 - Corporate Risk Management in China

Practical Hints for Senior Executives


Compliance and risk management belong to the key challenges faced by companies and management in China given the significant increase in investigations by regulators. This also explicitly applies to foreign regulators, including regulators in Germany, who are entitled to investigate whether companies and management are involved in misconducts in China. Many foreign jurisdictions have opened the door to investigate and impose sanctions on companies and management in relation to wrongdoings in China. Companies that are currently restructuring their operations in China, face additional risk pressure given that former staff could act as a whistle-blower. These game changers can lead to serious liability risks of the company and its management in China, and abroad.


Features 4 - Expanded Rules on Transfer Pricing Disclosure in China

More to do for Small and Big Enterprises


The Public Notice of the State Administration of Taxation [2016] No. 42 increases the level of complexity and administrative burden for many companies, also for those who previously were not required to prepare transfer pricing documentations. The rules became effective on 1st January 2016, i.e. they affect the upcoming corporate income tax annual filing as well as the transfer pricing documentation for fiscal year 2016. For foreign invested enterprises, the main points are the Master File, the Local File and the Related Party Transaction (RPT) Forms. Others like the Special Issue File and the Country-by-Country Reporting (CbCR) are only relevant in specific situations and will not be further analyzed in this article. So what is new about Public Notice 42?


More than Business - CSR: A Source of Opportunity and Innovation

Turning CSR into a Sustainable Business Model


92% of the world’s largest 250 companies now publish annual corporate social responsibility (CSR) reports, according to a survey by KPMG. In China, CSR adoption and reporting is also increasingly practiced, driven by the country`s integration into the global economic system. The number of CSR reports published annually in China increased from only 32 in 2006 to 1,703 in 2015. These numbers, however, do not reflect the actual implementation or impact of CSR programs.


APK – 15th Asia-Pacific Conference of German Business in Hong Kong

As one of the first major kick-off events of this year’s Asia-Pacific Conference in Hong Kong, the Delegates of German Industry and Commerce both in Beijing and Guangzhou, Alexandra Voss and Jens Hildebrandt, hosted a working breakfast on the current economic and political developments in Greater China and shed light on the implications for German business in the “Middle Kingdom.” With kind support by the Melchers Trading Company that was celebrating its 150th anniversary of their China operations, the chairpersons of the German Chambers of Commerce Bettina Schoen and Lothar Herrmann, alongside the German Ambassador to Germany, Michael Clauss, and German Consul General of Hong Kong Nikolaus Graf Lambsdorff touched upon a number of issues on today’s Sino- German agenda... 


German Chamber Ticker Editorial Team


Olivia Helvadjian

Senior Communications Manager & Chief Editor

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