German firms collaborate with local Chinese partners to stay competitive

JINAN — In an automated facility in Shanghai's Chongming district, empty trays glide along a conveyor belt, receiving a layer of soil, a scatter of seeds and a fine mist of water before being neatly stacked by a robotic arm.

This high-speed, intelligent rice seedling production line, a joint project by German industrial automation company Festo Group and its Chinese partner Hangzhou Fengzhu Agricultural Technology Co Ltd, represents a new frontier where industrial technology is applied to the soil of Chinese agriculture.

"The combination of agriculture and industry creates a new quality productive force that will greatly push forward automation in Chinese farming," said Wu Jianping, general manager of Hangzhou Fengzhu.

By incorporating Festo's sensors, controllers and digital monitoring, the smart production line has shortened the seedling process to just 48 hours indoors, boosting the efficiency of seedling supply by more than 10 times.

Since entering the Chinese market in 1985, Festo has established its largest global production center in Jinan, capital of Shandong province. Today, the site has evolved into a comprehensive hub for manufacturing, research and development, and logistics.

"China's robust demand for hydrogen, semiconductors and robotics is complemented by new quality productive forces, creating vast applications for artificial intelligence and green technologies," said Chen Feng, head of the global production center.

China is Festo's second-largest market. The company is now actively weaving AI into its own operations in Jinan, applying AI to production planning, supply chains and automated assembly lines, often with solutions from local Chinese firms.

This shift is taking place against the backdrop of a national strategy. China's recent "AI Plus" action plan, calling for the technology's integration across the economy and for global cooperation, is seen by many German executives as a positive signal that opens new opportunities for multinationals operating in China.

"We are committed to increasing our investment," Chen said, citing China's clear advantages in talent, innovation, application and local supply chains. He added that Festo is crafting a 2030 roadmap to better integrate German and Chinese strengths, accelerating the deployment of AI and automation in more sectors.

Eric Angue, vice-president of product development for Festo's Greater China region, noted that as more local customers emerge, some of them even become leading companies in the industry. "Festo cooperates with these brands and joins their supply chains."

The trend is not limited to Festo alone. A recent survey by the German Chamber of Commerce in China found that more than half of German companies believe their Chinese competitors will become innovation leaders within five years, with about half planning to collaborate with local partners to stay competitive.

One such company is the century-old Diehl Group. Its controls division, Diehl Controls, a key supplier of control systems in the global home appliance industry, set up in 2022 a new subsidiary in Qingdao, Shandong province, a major hub for advanced manufacturing in the home appliance industry.

Qingdao's semiconductor and integrated circuit, smart screen and other industries are developing rapidly, and the city's smart home appliance industry is highly concentrated and delivery is convenient, said Dirk Fricke, a member of the corporate division board at Diehl Controls.

Official figures highlight China's strength in AI. A report from the China Internet Network Information Center reveals that China's AI sector surpassed 700 billion yuan ($98.19 billion) in scale in 2024, maintaining over 20 percent annual growth. China has remained the world's largest market for industrial robots for 12 straight years.

"China has become the most active country in the development of AI technology, with new products and technology iterations coming out all the time," Fricke said, adding that the company plans to expand its R&D team of smart home appliance controllers in China in the hope of making China the global R&D center in this field.

Xinhua