U.S. markets closed
  • S&P Futures

    4,132.75
    0.00 (0.00%)
     
  • Dow Futures

    33,545.00
    -25.00 (-0.07%)
     
  • Nasdaq Futures

    13,976.00
    +0.25 (+0.00%)
     
  • Russell 2000 Futures

    2,222.50
    -2.40 (-0.11%)
     
  • Crude Oil

    60.51
    +0.33 (+0.55%)
     
  • Gold

    1,746.50
    -1.10 (-0.06%)
     
  • Silver

    25.45
    +0.03 (+0.11%)
     
  • EUR/USD

    1.1965
    +0.0010 (+0.08%)
     
  • 10-Yr Bond

    1.6230
    -0.0520 (-3.10%)
     
  • Vix

    16.65
    -0.26 (-1.54%)
     
  • GBP/USD

    1.3763
    +0.0011 (+0.08%)
     
  • USD/JPY

    108.8550
    -0.1930 (-0.18%)
     
  • BTC-USD

    63,506.00
    +3,094.29 (+5.12%)
     
  • CMC Crypto 200

    1,364.46
    +70.47 (+5.45%)
     
  • FTSE 100

    6,890.49
    +1.37 (+0.02%)
     
  • Nikkei 225

    29,610.65
    +71.95 (+0.24%)
     

Why a German rustbelt town is as well-known in China as Berlin

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
DUISBURG, GERMANY - MARCH 29:  (L-R) Lord Mayor of the city of Duisburg Soren Link (SDP), Vice Chancellor and Economy and Energy Minister Sigmar Gabriel (SPD), Chinese President Xi Jinping, Prime Minister of the German State of Northrhine-Westfalia Hannelore Kraft and CEO of Duisburger Hafen AG (Duisport) Erich Staake attend the arrival of "Yuxinou" container train at the Logport terminal on March 29, 2014 in Duisburg, North Rhine-Westphalia, Germany. The train, which is up to 750 meters long, links the Duisburg shipping port directly with the Chinese city of Chongqing, located 10,000 kilometers away. Xi Jinping is on a two-day official visit to Germany. (Photo by Pool/Getty Images)
Chinese president Xi Jinping welcomed a train from China during a visit to Duisburg in March 2014. Credit: Getty Images

Some Europeans may not be able to point to the city of Duisburg in Germany on a map, but its name is as familiar in China as the German capital Berlin.

The rustbelt city of about half a million people on the banks of the Rhine in western Germany is Europe’s largest inland port. Its fame in China, however, is because of its location as the end point of Beijing’s “new Silk Road,” an 11,000km trainline stretching from China across Central Asia and Russia to Germany.

Duisburg mayor Sören Link has dubbed it “Germany’s Chinatown” and likes to say that Berlin and Duisburg are often the only two cities marked on German maps in China.

Johannes Pflug, the city’s China liaison told Yahoo Finance UK that Duisburg and Wuhan in China have been partner cities for 37 years. While freight trains have been running between the megacities of Chongqing, Chengdu, and Ürümqi and Duisburg since 2011, the harbour city was only put in the global spotlight in 2014, when Chinese president Xi Jinping visited.

“Since then the number of trains have reached about 25 a week and the number of Chinese companies in Duisburg has doubled to over 100,” Pflug said.

Duisburg has “very high name recognition” in China, he said. Last year at a conference in Shenzhen, attendees told him: “We know Berlin and we know Duisburg.”

Duisburg’s fortunes waned with the deterioration of Germany’s coal and steel industries. The home of steel giant Thyssenkrupp now has one of the highest unemployment rates in Germany, with 11% out of work, more than twice the national average. Becoming Xi Jinping’s gateway to Europe — it is just hours from France, Belgium, and the Netherlands — is a much-needed shot in the arm.

(GERMANY OUT) Deutschland, Nordrhein-Westfalen, Duisburg - Container-Hafen in Europas groesstem Binnenhafen, dem Rheinhafen Duisburg-Ruhrort (Photo by JOKER/Marcus Gloger/ullstein bild via Getty Images)
Duisburg in the state of North Rhein-Westphalia has the largest inland harbour in Europe. Credit: Marcus Gloger/Ullstein Bild via Getty Images)

Erich Staake, chief executive of Duisburg Port, said at the company’s annual meeting in April that about 30% of the total train-freight trade between China and Europe was handled by Duisburg. This trade with China is "the most important growth segment for Duisburg," Staake said. "Of course, we want to expand that."

Construction of the €260m (£234m) China Trade Center Europe is to begin this year. Yaomin Wang, managing director of the Starhai Group real estate company behind the centre, said she expects about 200 Chinese companies, entrepreneurs, and agencies representing research centres and universities to eventually move in.

Xi Jinping’s ambitious Belt and Road Initiative, the sea-and-land infrastructure investment project, has been viewed with a degree of suspicion in Europe. Critics say it puts participating countries deeply in China’s debt and extends Beijing’s geo-political power. Italy caused a furore in March when it became the first G7 country to sign up to the project to get Chinese investment for its ports.

Pflug says he is not concerned that Duisburg could become too dependent on Beijing for its regeneration. “Duisburg’s relationship with China is that of an eye-level partner, we are not taking direct investment, that is our policy,” he said. He added that the message to Chinese businesses is “we have our own workforce in Duisburg, you don’t need to bring your own workforce.”

He claims that there are no German borrowers in Duisburg getting money from China but rather Chinese companies investing in their own Duisburg offices. “We pay attention to this,” he added.

RONGCHENG, CHINA - SEPTEMBER 15:  A freight train leaves for Duisburg port of Germany from Weihai port on September 15, 2017 in Rongcheng, Shandong Province of China. The first direct freight train service linking Weihai port and Duisburg port was launched on Friday.  (Photo by VCG/VCG via Getty Images)
The first direct freight train leaves Rongcheng, Shangdong province bound for Duisburg, September 2017. Credit: VCG/VCG via Getty Images)

Not everyone sees it so positively. Sebastian Heilmann, a China specialist at the University of Trier told Handelsblatt last year that “Chinese industrial policy aims to create value in China. Basically, foreign providers of technology are to be replaced by Chinese firms.”

There is also currently an imbalance as far as the trainline goes. According to Duisburg port boss, two trains full of Chinese goods arrive in Duisburg for every one that returns to China — and the port only earns one-fifth of the fee on empty containers that need to be sent back.

Staake said if it was possible to guarantee greater reliability of train traffic and if travel time could be cut down to 10 days, then European exporters would be more interested in using trains instead of expensive cargo planes.