"Feldpost" from de-industrializing Germany

Last week, I had the chance to present the industrial and economic facets of Germany to MBA students from The University of Hong Kong. Our journey began in Berlin, then proceeded to Wolfsburg, Dortmund, Duisburg, Hannover, and concluded back in Berlin. I extend my heartfelt gratitude to our hosts for their generous insights: Volkswagen AG, TU Dortmund, the City of Duisburg, Future Car Lab, Neoxphere Technology, and Bundesverband Musikindustrie (Federal Association of the Music Industry). This broad array of industries and subjects was enhanced by cultural excursions to Potsdam's Sanssouci, the former Sachsenhausen Concentration Camp in Oranienburg, and several sites that depict the process and impact of Germany's reunification.

This trip occurred against the backdrop of Germany's struggling economy. Since the Greens and Socialists were ushered into power with the support of a small liberal party in December 2021, the nation has grappled with erratic and ideological policies. These are often portrayed to the populace as investments in future competitiveness or as efforts to catch up with the previous government's developmental shortcomings. From being Europe's economic powerhouse, Germany has become the OECD's underperformer in just a few years. To counter the demographic trend of an aging population and a shortage of skilled labor, Germany has opened its doors to immigration. Yet, skilled individuals often opt for regions with lower taxes and simpler bureaucracy, finding better opportunities elsewhere. Nevertheless, immigration remains high, consisting of refugees and migrants, many of whom face challenges integrating into the labor market.

Still there are many things to learn in Germany. Many capabilities have not vanished immediately, but are just getting unfeasible in the country. Also, assets of privately owned SMEs are getting cheap to acquire. And of course, Germany is a lesson on a new kind of political risk, where technocratic political leadership is succeeded by a new class of politicians which are genuinely ideologic, but does not even have the skills, education and character to follow through their own agenda.

Hong Kong after Covid and the 1999 riots

My time in Hong Kong was very condensed this year. My apologies to the friends I could not meet this time. Thanks also to the great students from the MBA programme of Hong Kong University and the GBA stream coming in from Shenzhen to participate in a 5-day intensive course on Turn Around Management and Corporate Restructuring. I had only one day to explore an Outer Island and chose Peng Chao to visit a long-time friend. The rest of the time I spent predominantly in Central. It was great to see fireworks again on National Day, celebrating the 74th anniversary of the foundation of the People’s Republic of China. Also, it is good to see Hong Kong’s economic situation slowly picking up. However, the city has a very narrow spectrum of industries and capabilities, which does not make it easy. Luckily, the connection to Shenzhen, the Pearl River Delta and Guangdong Province is fully open again. Furthermore, enthusiasm for the Greater Bay Area Development is picking up, and thanks to efficient management, the internal border between Hong Kong SAR and the rest of Guangdong is not so much an obstacle. Soon, taking your private car over from Hong Kong to the Mainland will also be possible. A friend told me how happy he is that he can then just drive over the bridge to his retirement apartment in Zhuhai. Less than 1 hour door to door.

The 1999 riots seem overcome. Without much drama, the local government could reinstall law and order, of course, with the support of Beijing. And I guess, Covid also played a role. Some people left on British Overseas Passports to the UK. But many tell quite miserable stories. Just imagine, instead of being in one of the centres of global innovation and growth, you decided to move to a semi-detached house in a shithole like Manchester, Birmingham, Liverpool or Glasgow. I would be miserable too. What worried me, was that many people told me that they expect a war with the US within the coming 5 years. The hope of many is that this can be contained in a naval conflict in the Pacific and outside the First Island Chain. The best option, of course, would be, not to have such a conflict at all. And I really hope at least the rhetoric could come down to make talks easier.

I ended my stay in Hong Kong, on the news of the horrendous attack of Hamas on Israel on October 7th. I was really surprised that they were able to prepare such a large-scale attack without being noticed. Also, in my mind, the cooperation between UAE, Egypt and Saudi Arabia was just going into a positive new phase. Hopefully, the safety in the invaded districts can be restored quickly. Then I assume Hamas will be ended now and forever. I just can’t imagine how terrible this will be in the densely populated Gaza Strip. And, of course, it could be possible that other players open a second front, like for example Hezbollah. Hoping for the best for my friends in Israel, Lebanon and Jordan. Especially those who just left Ukraine and Russia to make Israel their new home.

My trip ended with a Typhoon coming to Hong Kong. Signal number 8 is hoisted, potentially moveable structures are tied to the ground, windows are taped, and the city is waiting for the cyclone’s landfall nearby.

Back to the classroom

Teaching my MBA Elective at HKU is great fun. It is a very nice class of smart and engaged students. Even the course covers the whole Saturday and is quite intense, a critical mass stays switched on all day. Given that some of them have a full time job aside, I really respect this level of energy. The Friday before, we had an excellent dinner with Maurice Tse, Sachin Tipnis and Josephine Chan. Under the leadership Dean Eric Chan, their team has built up the MBA Programme of the University of Hong Kong to the level that it was recently ranked Best Programme in Asia by The Economist. Given the intense competition in the region, this is really an outstanding achievement. I know this from my own previous experience with launching the EMBA Global Asia here in Hong Kong University. It is tough. So congratulations. Even rankings are not the only thing to look at, they do reflect the quality of delivery and design of educational programs, and last but not least the standard of students. And this time they are really good. Nice to be back to the classroom.

Getting ready for the next lecture on Sunday