Siemens boss vows to “defend” and expand market share in China

The CEO of Siemens has vowed to expand its market share in China, arguing that the market is crucial to innovation and growth in the industrial conglomerate.

Roland Bosch’s comments come as German companies come under increasing pressure to diversify away from China, as Berlin seeks to reduce its reliance on what it sees as a geopolitically risky market after its dependence on Russian gas soured.

However, Bosch told the Financial Times that withdrawing from the market, which accounts for 13 percent of the company’s revenue, “is not an option.”

“I will defend my market share, and if I can, I will expand it,” said Bosch, who assumed the chairmanship of Siemens, one of Germany’s largest companies, in late 2021.

“Where can I find clients who take me to the next level of innovation, who are in demand, and who are looking for the next technology?” Asked. “It’s China in a lot of cases.”

In the past few years Siemens has transformed from a sprawling engineering conglomerate making products such as washing machines into a technology company focused on developing digital tools for industrial use.

It sold its 50 percent stake in its home appliances joint venture to Bosch in 2015 and the group still owns stakes in several of its former companies that were spun off to form stand-alone entities. These include the medical technology unit Siemens Healthineers and Siemens Energy, which in turn owns the renewable energy business Gamesa.

The German group, which employs more than 311,000 people, last week raised guidance for the second time this year thanks to margin increases in smart infrastructure and digital industries units. The results helped smooth global supply chains, allowing the company to tap into bloated order books.

Siemens’ share price has jumped by a third in the past year to around 150 euros.

China, where wages and labor costs have gradually risen in recent years, has become particularly important to Siemens’ digital industries arm, which focuses on automation and generates nearly a fifth of the country’s revenue.

Many companies, including Siemens, are looking to move manufacturing away from China to other countries in Southeast Asia where wages are lower. Others worry that rising geopolitical tensions with the West over Taiwan, and US restrictions on China’s access to advanced technology, are hurting the country’s ability to survive as a manufacturing base for exports.

Bush noted that China’s declining attractiveness as an investment destination for foreign manufacturers was one reason why “high-tech manufacturing” was high on Beijing’s agenda.

“I am not saying that China is deindustrializing,” Bush said. With more and more technologically advanced factories, the country’s industry will be able to “defend its value but in a different way.”

“China will do its thing in terms of high-tech – that’s obviously on the agenda.”

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