Germany rebuffs China on magnetic train technology
Financial Times: June 1 2006
By Bertrand Benoit in Berlin, Geoff Dyer in Shanghai and Richard Milne in Frankfurt
Berlin has rejected Chinese demands that it provide state funding and access to sensitive technology in exchange for the right to build a $4.3bn (€3.34bn, £2.28bn) magnetic levitation train link between Shanghai and Hangzhou.
Germany’s tough stance on funding and intellectual property transfers for the project comes a week after Angela Merkel, the German chancellor, scolded the Chinese government for not doing enough to protect foreign companies’ intellectual property.
Berlin officials told the FT they had refused to bow to Chinese pressure to strike an agreement on the maglev track ahead of Ms Merkel’s maiden visit to the country as chancellor last month.
Beijing has been in talks for years with Transrapid International, a joint venture between Siemens and ThyssenKrupp, over building the world’s second commercial high-speed maglev track.
A Transrapid train, which reaches speeds of 450km/h, has been operating on a 30km stretch between Shanghai and its airport since 2004. But while Beijing’s planners gave the go-ahead to a second, 200km track in March, talks with the companies have been slow.
At a meeting in Beijing last week, Wolfgang Tiefensee, German transport minister, rejected requests by Wu Xiangming, head of China’s National Maglev Transportation Technology Research Centre, for German government funding.
Germany provided 10 per cent of the $1bn budget for the Shanghai airport link. But a Berlin official said: “If we were to put taxpayers’ money into another maglev track, this track would be in Germany.”
The official also dismissed suggestions in the Chinese media last week that the German side had agreed to transfer “core aspects” of the maglev technology to China to secure the contract.
One person close to the companies said: “We want to stick to conditions agreed for the airport track. Levitation and engine technologies will remain in German hands.”
Many foreign businesses in China willingly transfer technology to local partners. They are also subject to “local content” rules, which dictate what share of a product sold in China should be made in China.
German lobbyists, however, have complained lately about “forced technology transfers” – aggressive attempts by Chinese companies, with or without political support, to acquire foreign technology.
Thyssen and Siemens hope to make Transrapid an export hit. Yet executives say this could be difficult if the technology does not take off in Germany.
A plan to build a Cologne-Frankfurt link was dropped, while the fate of a proposal to link Munich to its airport is uncertain because of a dispute between the Bavarian and federal governments over funding. Klaus Kleinfeld, Siemens’ chief executive, told the FT in April: “If Germany is serious about investing in future technologies then why is it that China is building the Transrapid and not us?”