Ten or fifteen years ago global business was mainly in the hands of a select number of multinational giants. Small and medium-sized business concentrated on their home markets and perhaps one or two neighboring countries. Not so any longer. Even the smallest businesses have realized that they have something to market in distant countries. Under these circumstances, Chinese companies of all sizes in various industries have recently opened to foreign competition. According to the Chinese Commerce Ministry's new release on relevant report, the Chinese foreign investment reached a new record of 26,51 billion US-Dollars in 2007. This represented a growth of 25,3 percent compared to 2006. After the quantity expansion, the quality offensive comes silently. Today, Chinese companies throw not only millions of T-Shirts, toys or plastic bowls in the international market but also wireless LCD-televisions, telecom-equipment and precision tools as well. Chinese companies have realized that a competitive advantage based on low costs, low prices and large quantities in a global economy cannot defend itself long. Consequently, they focus consistently on innovation and brands. In addition, China's globalization also needs strong mental forces. China does not just want to be a world factory, but instead be an internationally competitive market place that Western competitors already are. In the involvement of Chinese companies abroad aimed at specific markets, several strategies are recognizable. German and European companies are facing new chances and challenges at the same time. People must correctly assess the situation and corporate strategies and business concepts, with which they respond effectively and sustainably. The following questions are the focus: In what areas and branches do Chinese companies concentrate in German market? Which Chinese companies go abroad? What are their market entry strategies? What are their competitive strategies? And what are the steps of Chinese investments? What problems in the Chinese M&A business in Germany? How to overcome or avoid them? What are other problems? What branches are suffering from Chinese competition in Germany and EU? Chances or threats? How can German companies face this shift in a global economy and respond appropriately?

"The increase in trade between China and Germany during the last decade--and, in particular, in German exports to China--has exceeded all expectations. Germany is China's number-one trade partner in the EU and China is the top foreign investment destination for German companies. Based on this emerging economic symbiosis between China and Germany, a "special relationship" is now developing. But is this trade-based relationship damaging wider European strategic interests in areas such as foreign policy, energy and raw materials, climate change and human rights? In a new ECFR policy brief, Hans Kundnani and Jonas Parello-Plesner argue that a special relationship between Germany and China is emerging: China needs technology and Germany needs markets. Structural similarities and shared economic interests are key for this emerging special relationship which has further intensified since the economic crisis in 2008. But Chinese companies will provide greater competition in the future and trade conflicts are likely to intensify -- Germany's approach to China is mostly driven by economic interests and the needs of its exporters. Germany's foreign policy is based on the idea that economic exchange would lead to political and societal change in China -- China sees Germany as the most useful country for its economic development. Germany is an attractive partner because of its prominent role in the EU, a similar strategic outlook-but also because of increased German dependence on China. "The Chinese are thinking about whether a 'German Europe' is emerging from the euro crisis just as we are. They increasingly see Berlin as the place to go to get things done." - Jonas Parello-Plesner. "Europe's future relationship with China will be determined by Germany's rapidly evolving bilateral relationship with China. The danger of this new special relationship is that it could undermine European strategic and economic interests"-Hans Kundnani. The authors argue that the emerging special relationship also matters for Europe and should be developed into a 'real' European strategic partnership with China: The EU should identify where Europe can help Germany. For example, the EU can bring added value in developing better investment and public procurement rules and it should use its leverage in negotiating access to raw materials -- A joint EU approach towards China requires better coordination among member states and the involvement of EU institutions. The EU should also explore new formats for dealing with China -- EU member states should empower the European External Action Service (EEAS) to develop a new "top-down" approach to China. The High Representative should co-ordinate Europe's China policy in areas such as trade and climate change"--Publisher's description.

This paper submits to the international activities of Chinese companies in Germany with manufacturing tasks through intensive literature studies and exploratory case studies through face-to-face interviews. At first, the internationalization strategy of Chinese companies from a historical perspective, the ideal-typical models of management and industrial relations in German and Chinese companies will be described. Then the empirical results of three case studies will be presented and argued one after another. From the empirical results it is found that the technology know-how is the main destination for Chinese enterprises to invest in Germany. Due to the extremely large cultural differences, the Chinese parent company do not directly engaged in the daily business operations of its subsidiaries.