Reference News Network, March 12 report (by Li Hanlin): In the context of accelerated restructuring of the global industrial chain and rising geopolitical uncertainties, the economic and trade cooperation between China, the world's second-largest economy, and Germany, the third-largest economy, has drawn widespread attention. Hermann Simon, a renowned German management scholar and the originator of the "Hidden Champion" theory, recently told Reference News reporters in an exclusive interview that China's continuous promotion of innovation-driven development not only lays a solid foundation for practical Sino-German cooperation, but also provides important opportunities for German companies in global industrial layout, technology research and development, and innovation application. He pointed out that Sino-German cooperation is showing long-term stability and deep complementarity, creating broad space for enterprises of both sides in the new round of industrial upgrading, while injecting new momentum into global innovation and industrial development.
The "Hidden Champion" Deeply Positions in China
Simon pointed out that the depth and breadth of Sino-German economic and trade cooperation reflect the high degree of complementarity in the industrial structures of the two countries. In 2025, China once again became Germany's largest trading partner, with bilateral trade volume remaining above $200 billion for many years. This is not only growth on the numerical level, but also reflects the highly integrated relationship between the two countries' enterprises in fields such as manufacturing, machinery, automobiles, chemicals, and electronics. "This trend shows that the Sino-German trade relationship has long-term stability and structural basis."
In his view, behind the trade data lies the deep integration of supply chains and practical cooperation at the enterprise level. German companies have been increasing their investment in the Chinese market, based on confidence in China's vast consumer market and high recognition of China's innovative environment. "German companies not only believe in the Chinese market, but are also investing more than ever before. At the same time, we have seen sustained growth in Chinese investments in Germany," he said. Currently, about 60% of German "hidden champion" companies operate in China, and many have set up their largest production bases in China.
Simon recalled the scene of his first visit to a Chinese company 26 years ago. "At that time, the factory conditions were relatively simple, but today's Chinese companies have innovation as the core competitiveness." He said this transformation not only changed the perception of "Made in China" abroad, but also benefited global consumers and created a large number of jobs. The international community is re-evaluating China's position in the global innovation system.
He gave an example: a German high-tech pump "hidden champion" company has established an artificial intelligence research center in China. The company's management told him that it has more favorable conditions in China to carry out artificial intelligence technology development, product optimization, and process innovation. The speed at which Chinese companies apply new technologies and achieve commercialization is "astonishing". Simon believes that China's comprehensive advantages in production systems, R&D capabilities, and innovation applications are crucial for German companies, and this importance will further increase in the future. "For many businesses, China is the best choice."
"In areas such as artificial intelligence, quantum computing, and laser technology, China is showing strong momentum," he said. For example, German laser technology company Trumpf has its largest factory in China, and some mining technology companies have even transferred their entire value chain, including R&D, to China. At the same time, Chinese companies have also set up design and R&D centers in Germany, especially in the field of high-end car design, where Germany has deep expertise. Through cross-border innovation, the two sides achieve complementary strengths and form a "mutual empowerment" cooperation model.
Cooperation Concerns Future Competitiveness
Simon pointed out that China has continuously placed innovation at the core of multiple five-year plans, emphasizing industrial strength, technological self-reliance, and high-quality development. "Putting innovation in such an important position is a very clear signal. This indicates that China not only wants to be a production base, but also hopes to become an important source of technology and knowledge creation," he said. In his view, this strategic perseverance provides enterprises with a clear direction and enhances long-term investment confidence.
"China is one of the global innovation centers," Simon cited data. He particularly praised China's ability to quickly convert scientific and technological achievements into marketable products. "The speed of transforming knowledge into products is one of China's major advantages," he said. He noted that Germany is strong in basic research, while China is efficient in innovation commercialization, and the two sides can learn from each other and jointly improve. "Mutual learning is the most positive aspect of our relationship."
Facing the current situation of weak global economic recovery, rising protectionism, and increased trade barriers, Simon still believes that globalization will continue to play a key role in the next decade or so. He pointed out that over the past 30 years, globalization has been one of the most important drivers of growth. Although there are issues such as increased tariffs and non-tariff barriers, global trade is still expanding. "By dialogue and practical policies to reduce barriers and improve the investment environment, we can create more stable expectations for enterprises."
In his view, stable and pragmatic political relations have a dual impact on corporate confidence. On one hand, it helps reduce transaction and investment costs; on the other hand, more importantly, it improves the overall attitude and psychological expectations of enterprises towards each other's markets. "Good political relations make German companies more willing to invest in China and visit China; similarly, Chinese companies are more willing to invest in Germany," he said. A good atmosphere directly translates into corporate actions.
Simon said that for German companies, "without China, it is impossible, they must go to China." He emphasized that German companies should not miss the opportunities brought by China's new round of industrial upgrading and technological transformation, and should become "internal participants," actively integrate, and benefit from it.
"Sino-German cooperation is not just about trade figures, but also about innovation capability and future competitiveness," Simon concluded.
Interview with Hermann Simon, the proposer of the "Hidden Champion" theory, by Reference News reporters (photographed by Li Hanlin)
Original article: toutiao.com/article/7616312042198270473/
Statement: This article represents the views of the author alone.