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Civil Security Sector in China

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One focus of the current Five-Year Plan of the People's Republic of China is on the civil security sector - for the German economy, therefore, the time to explore the market is currently very advantageous. This is not only the estimates by German experts in China, but also by Michael Yang, representative of the "Smart China Federation". In late October in Shenzhen with the "China Public Security Expo" (CPSE), his association is going to host one of the largest security trade shows in the world. One focus of the current Five-Year Plan of the People's Republic of China is on the civil security sector - for the German economy, therefore, the time to explore the market is currently very advantageous. This is not only the estimates by German experts in China, but also by Michael Yang, representative of the "Smart China Federation". In late October in Shenzhen with the "China Public Security Expo" (CPSE), his association is going to host one of the largest security trade shows in the world.

On September 26th GTC organized a one-day information session on "Business opportunities and conditions in the civil security sector in the P.R. China" in Berlin as part of the export initiative security technologies and services of the Federal Ministry of Economics and Technology.

The well-attended event at Berlin's House of the Industry took place in the context of the export initiative security technologies and services of the Federal Ministry of Economics and Technology (BMWi) and is part of the BMWi-market development program for small and medium-sized businesses. The primary objective of the meeting was to give a first overview of the Chinese market in general and specifically with regard to market development, business opportunities and conditions in the area of civil security sector. Interested German small and medium-sized enterprises (SMEs), the self employed persons of the industrial economy and subject-based freelancers as well as economic service providers (companies) were given the chance to become familiar with the current market requirements and to get preliminary contacts with opinion leaders and experts from the P.R. China and Germany, who spoke on selected topics and were available also for individual talks that day.

In 2012 German exports to China were amounted to nearly 67 billion euros. And as an ermerging industry the security industry should play a bigger role. This was also emphasized by Dr. Dirk Grabowski, head of the responsible unit "Steel, defense and security industry" in the BMWi. He had just returned from a trip to China and immediately reported his impressions directly from the records of negotiations being held regarding new business opportunities for the German civilian security industry in China in the coming years. In order to opreate successfully on the Chinese market, Dr. Grabowski encouraged the participants to intensively reflecting over the details of the Chinese civil security market to be well prepared for it, with appropriate support from the BMWi and the Federal Ministry for Economic Cooperation and Development (BMZ) if required. The company's expectation of its Chinese counterparts especially in German technologies and services in the civil security sector - such as issues of disaster management - is avowedly high.

"Safe City", one of the largest security programs in China, focuses on the improvement of public safety in the still growing cities. According to Michael Yang, representative of the "Smart China Federation" in Shenzhen, the Chinese Ministry for public safety until today has invested the equivalent of over 18 billion U.S. dollars in order to optimize the civilian security infrastructure of the 400 largest and most important cities of the country. "Our smart-security-concept includes trades such as video surveillance, access control, alarm systems, fire protection or graphic information systems," said Yang. Against this background, security technology and know-how "Made in Germany" is currently highly in demand in China.

But not only with good products and services one can gain market share. Inga Schlüter from the German Institute for Standardization (DIN) spoke about the prospects, how market access to global markets can be accomplished more easily through international standards, while both liability risks and costs are on the decrease. The "economic security coordination center" at DIN is funded by the Federal Ministry of Economics and is part of its approach to industrial policy. Goals are to support the cooperation and coordination of relevant stakeholders, and building a network and a communication platform.

Reasons why the medium-sized German security industry in China is not yet fully represented, is also due to the fact that the financial risk is often perceived as too high. However, the federal government provides support through the so-called "Hermes guarantees" - explained Igor Sufraga by Euler Hermes AG Germany especially with regard to China. The German state export credit insurance protects companies from losses due to payments to their foreign business partners. For China, a business volume of about 2.1 billion euros was assured in this way in the past year.

In addition to the cultural barriers in China-business a lot of legal and fiscal framework needs to be considered, which often differs significantly from the German and European regulations. This was pointed out by Attorney Jiawei Wang from the international auditing and tax consultancy firm Rödl & Partner. His review ranged from labour legislation over corporate to investment law, roamed the subjects of know-how protection and joint-ventures and highlighted the various aspects of the Chinese tax law.

All were in agreement about the fact that it might be a a long tramp for German security companies to China, but can be highly rewarding - if one is well prepared and uses the various private and governmental support services. One thing's at least for certain: When the German security industry does not use the currently available opportunities in China, then others do.

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