While people envy the early birds that get the worms, the birds themselves may think differently.

Ernst Behrens, head of Siemens China Co Ltd, is one of the early pioneers in the China market who feels that being first may have its price.

"We have to make sure that we are not being disadvantaged, just because we came earlier than others,'' said Behrens in an interview.

That is because the progressive liberalization of the Chinese market, which has gathered much greater momentum since China's entry to the World Trade Organization in December 2001, has mostly benefited the latecomers who start without any previous burdens. Those that arrived in China in the past year enjoyed a much greater degree of flexibility than their forerunners as many business restrictions were being removed or relaxed.

The breaking down of the market barriers in China is widely expected to proceed in 2004 at a much brisker pace and in a significantly wider scale in form as well as in spirit.

Such expectations are stemming from the rising confidence that China will make good its market opening commitments to the WTO.

The profound significance of this development was not lost on Siemens, which established the first telegraph service in China in 1872, and, after many years of absence, re-established its representative office in Beijing in 1982, four years after the country adopted its opening and reform policy. The German electronics and equipment manufacturing giant is fully geared up for its second push on the China front.

"We are igniting the second stage of our China rocket," said Behrens, who has been doing business in China since 1981 and took the post of Siemens China president in 1997.

On one hand, less regulations after the WTO accession brought more foreign investors to China, which intensified competition for the German giant.

Newcomers could choose to develop their business in a form of wholly owned subsidiaries instead of joint ventures, since that will give more freedom the management and operation of the enterprises.

On the other hand, Siemens, which had to mainly rely on the form of joint venture due to regulatory requirements and concerns to get used to the market quickly in the early stage, has been finding that more co-ordination with local partners reduced its response speed to market.

"We must keep our early established companies competitive," said the Siemens China boss.

He said that in the past years, Siemens China has boosted its stakes in many of its joint ventures to a majority or wholly owned.

It also cut the number of its ventures from 59 in 1999 to about 50 this year.

While consolidating its businesses in China, Siemens also began to build a complete industrial chain.

"We will invest more on high-level technological development facilities," said Behrens.

He said Siemens China would open a software centre this year.

Meanwhile, the company will recruit local engineers for its research and development facilities.

The electric and electronic firm will also build a 120-metre-tall China headquarters this year to satisfy the demand for business expansion.

Siemens made an accumulative investment of 5.4 billion yuan (US$652 million) by the end of its 2003 fiscal year ending on September, rising 8 percent over the previous year.

The efforts of Siemens have paid off with the strong growth from China, the fastest growing economy in the world.

In the 2003 fiscal year, Siemens China achieved a year-on-year growth of 17 per cent, excluding the factor of the appreciation of the euro, while Siemens's global sales shed 4 per cent year-on-year.

The company's sales in China stood at 30.1 billion yuan (US$3.64 billion), while its order intakes reached 31.3 billion yuan (US$3.78 billion) by the end of September.

Looking ahead, Behrens is confident of the performance of his business in China.

"We see a very strong 2004 coming," said Behrens.

He believed that although the telecom business, the biggest one of his company in China, might slow down a little due to China's delay of the launch of the third generation mobile communications system, other business segments would maintain a good momentum.

The improvement of Chinese companies in technology and their demand for high-quality automation control systems will bring lots of orders for Siemens China.

At the same time, the rapid development of the automobile market is surely a driving force for Siemens" electronic business.

Behrens believed the medical group of Siemens China would also get a strong boost from the increasing awareness of the Chinese Government on public health and the emergence of private hospitals.

The China market has also become an important supply centre for Siemens" worldwide businesses.

The German giant procured US$1.6 billion worth of products and services this year.

"The procurement volume is much more important for Siemens global needs than for Siemens China needs. This also shows the importance of the China market for Siemens," said Behrens.

(China Daily January 15, 2004)