China, Denmark High-tech Cooperation Promising

Oct 17, 2012     Email"> PrintText Size

While the European Union debt crisis has left foreign investors wary of putting their money into the 27-member bloc, the stable, open Nordic economies on its periphery could prove an important arena for Chinese firms looking to expand overseas.

Among these, Denmark stands out for being relatively shielded from the debt crisis as its national currency, the Danish kroner, offers investors an alternative to the troubled euro common currency, even as its economy is fully integrated in the EU single market.

The country has little heavy industry, or mineral wealth, apart from in Greenland, where potential reserves of oil, gas and minerals are a long way from commercial exploitation.

However, Denmark acts as a commercial bridge between Scandinavia and northern Europe, and is home to an array of high-technology industries in sectors relevant to sustainable, green growth. It is these factors, alongside the country's macroeconomic stability, that are encouraging Sino-Danish collaboration and innovation.

For instance, Denmark is a world leader in wind turbine manufacture, while chemicals, pharmaceuticals, biotechnology and services account for approximately three-fourths of national gross domestic product.

"Wind technology took root many years ago in Denmark and Germany, so we have people here who represent a lot of experience, and experience adds value," said Anders Rebsdorf, Director of the Global Innovation Center of Chinese wind turbine manufacturer Envision Energy, in a recent interview with Xinhua.

"We can add competence and reduce risk in a lot of decisions by having the innovation center in a place where we have a lot of experience in this field," he added, explaining why the company chose, in 2010, to place the center in Silkeborg, on Denmark's Jutland peninsula.

Today, the center develops and tests new types of wind turbines in Denmark to ensure Envision maintains a robust product pipeline.

The country also has strong competences, and growing collaborations, in life sciences, information technology, water and waste management, energy efficient and renewable energy technologies, biotechnology, pharmaceuticals, food safety and industrial design.

High-tech hubs

Examples of Sino-Danish collaboration in life sciences, for instance, is found in a program involving Copenhagen University and the Chinese Academy of Sciences in Beijing, where teams explore how to replace silicon with organic materials, in a quest to merge biology and chemistry with electronics.

One application of this research could be in converting heat into electricity by designing nano materials based on organic materials. In turn, this could impact development of more energy efficient transport systems, researchers involved in the process said.

Meanwhile, genetics research has been boosted by China's Beijing Genomics Institute, a sequencing powerhouse establishing its European headquarters in Copenhagen in February this year.

"Denmark is very good at bio research, genomics research, clinical research, health care, biofuels, energy and many of those aspects of bio tech," said BGI executive director Wang Jun, in an interview with Xinhua.

"Beijing Genomics Institute is particularly strong in genomics and informatics. We are using our technologies, along with the expertise available here. It could be a perfect match," he added, referring to the institute's collaboration with Danish partners.

Joint genetics projects include mapping the entire genome of the Danish population, which would help study causes of hereditary diseases and common illnesses, and could one day lead to development of personalized treatments, including a vaccine against certain types of cancers.

Experts say collaboration and investment in such knowledge-intensive sectors could eventually mean developing technologies on site in Denmark and selling them on in the EU.

In fact, the sophisticated and wealthy Danish market provides companies an ideal testing ground for high-tech gadgets and information technology products.

Chinese telecoms giant Huawei, for instance, launched its Danish operations four years ago, in a bid to find new markets and talent, but also to learn more about what local consumers want.

In industries such as pharmaceuticals, biofuels, electric cars and batteries, which are all technology intensive, Chinese companies could also benefit by manufacturing and registering their products in Denmark. This would give them an advantage in tapping the EU market, as EU consumers would recognize the product as having originated in Europe, experts say.

When it comes to future potential for collaboration in heavy manufacture, Rebsdorf points to offshore wind technology, an area where Denmark has considerable expertise, and which is a nascent industry in China. Another area is large wind turbines adapted to respond to China's average, lower wind speeds, and turbines which can withstand the typhoons that often hit southern China, he added.

"From the Danish side, we can find innovative solutions that fit the market in China, where the growth is largest in our industry," Rebsdorf said, referring to the fact that China is the world's largest market for wind power.

Sustainable solutions

On a public-private level, the greening of urban infrastructure is presenting new opportunities for commercial and research collaboration.

For instance, Copenhagen will launch in 2013 a pilot program testing Chinese-built, full-length electric buses by Chinese electric vehicle maker BYD, to help reduce noise and air pollution in the Danish capital.

Meanwhile, Danish temperature-controls manufacturer Danfoss has already carried out a restructuring of urban heating systems in Niujie community in Beijing, and will implement a modern district heating system in Anshan. The system distributes excess heat produced by electricity plants to commercial and residential buildings, thereby improving energy efficiency and cutting carbon emissions.

Furthermore, collaboration on Sino-Danish agriculture is expected to boom as the two countries jointly-undertake research on 'sustainable, intensive production', as the Danish Agriculture and Food Council puts it.

This involves improving resource efficiency, including minimizing impact of agriculture and animal husbandry on water sources, and in growing a Chinese market for organic products. Danish expertise in the area is concerned valuable given that Danish agriculture is highly intensive and subject to stringent environmental regulations regarding use of water, fertilizers and pesticides.

Dairy, pork and fur are the bulk of Danish agro-products exported to China, while Chinese organic fruit and vegetables are imported. Dairy is of especial relevance to the China market, and the two countries are collaborating on innovations in this sector.

For instance, Danish dairy giant Arla, and China's leading dairy, Mengniu Dairy Group, are developing a knowledge center on milk and dairy production, the China-Denmark Milk Technology and Cooperation Center, in Beijing.

Change for China

Over 50 Chinese companies were registered in Denmark as of 2012, with their investment in Denmark equaling 300 million Danish kroner ($51 million), according to Danish official sources.

But business-to-business collaboration is rising fast, with some $3.4 billion worth of deals concluded between Chinese and Danish companies in sectors such as renewable energy technologies, ports services, and breweries, during Chinese President Hu Jintao's state visit to Denmark in June.

Still, experts believe Danish businesses must adapt and learn from China if they are to stay competitive and remain relevant to Chinese consumers and producers.

"Danish businesses have to visit China, make thorough market research on the spot, and find out what Chinese customers want," said Tom Jensen, secretary-general of the Danish-Chinese Business Forum, in a recent interview with Xinhua.

This applies in areas where design is fundamental to the product, such as furniture and lighting, but also in areas catering to specific needs, such as planning of elderly-care homes and development of the appliances used in them, as well as training the personnel needed to run them, he added.

"There is a difference between what Chinese and EU consumers want, and Danes must be aware of that difference. They need to change or adapt their products to suit China's market," Jensen said. (Xinhua)