CCWE and Roland Berger Strategy Consultants Team Up to Address “The German Model and its Implications for China”

On March 21, 2013, Tsinghua University Center for China in the World Economy and Roland Berger Strategy Consultants co-organized an event entitled, “The German Model and Its Implications for China.” Following a welcome speech by Tsinghua University Vice-Chancellor XIE Weihe, Roland Berger, Founder and Honorary Chairman of Roland Berger Strategy Consultants, provided an overview of the German economy. Using indexes and statistics such as public debt, the unemployment rate, and the Gini coefficient, Mr. Berger illustrated how Germany’s economy was able to remain relatively stable during the financial crisis. He also analyzed statistics on America, Japan, and China. Mr. Berger explained that the ability to sustain economic growth was due to several factors, including: the social structure of a social market economy; welfare reform; environmental awareness; industrial policies; an R&D environment; vocational education; infrastructure improvement; development of small and medium enterprises; stable labor unions, etc.

Professor David Li followed Mr. Berger’s presentation with remarks focused on “Why is it worth paying attention to the German model?” and “What can we learn from Germany?” In terms of why it is worth paying attention to the German model, Professor Li concentrated on three main areas: selection of social order and individual freedom; civil law origin; and the willingness to reform. Professor Li said that China and Germany are similar in these three areas. Regarding which aspects in relation to Germany are worth being studied, Professor Li specified public finance, the real economy, the real estate market; financial regulation, and family-owned businesses. China needs to deeply analyze these elements, Professor Li said, but must give strong consideration before implementing these features. Some major lessons that China can learn from the German experience include the need for balanced sources of tax collection, expenditures based on human/welfare need, cooperation between labor and capital, providing employment insurance, applying very strict regulation of the financial system, avoiding excessive profits,  being prudent with the internationalization of currency; being practical instead of only caring about reputation and appearances, providing subsidies for the housing rental market, putting restrictions on buying homes; reducing the possibility of a housing bubble; and taking care of family businesses. 

The third segment of the event featured a panel discussion that focused on Germany’s and China’s environmental protection and manufacturing industries, vocational education, real estate, and labor markets. Panelists included Roland Berger; LIAN Yuru, Professor, School of International Relations, Peking University; WANG Yiming, Associate Dean, Macroeconomics Research Institute, National Development Reform Commissions; HUANG Liaoyu, Director, Center of German Studies, Peking University; and Daniel ten Brinke, Managing Director, Consult Kings. Professor Li Daokui served as the moderator. The panel reached a consensus that regardless of what industry is being discussed, and regardless of the success of Germany and the stage of development for China, people should pay great attention to the impact of industrial policies and the importance of reform. In addition, Mr. Berger once again emphasized the three advantageous foundations of the German model: German culture, German history, and respect for education, science, and technology. He also expressed his full confidence that China’s economic development would continue.