Jürgen Kracht

Entrepreneur & Author

Sample Reading

Sample Reading

What didn’t fit the book:

China Shock 2.0 hit in 2025

This development has made China the global market leader in key manufacturing sectors. According to the OECD Magic database, by 2023 China’s market share was 50 percent in shipbuilding, 90 percent in solar photovoltaics, 30 percent in telecommunications and 25 percent in wind power equipment; by 2025 its market share in electric vehicles had reached 50 percent and in batteries even 75 percent.

Twenty years ago, Europe’s industry was shaken by the first “China shock”. As a result, this wave of low‑priced – even dirt‑cheap – goods destroyed many business models at home in Europe, and many people lost their jobs. Politicians and business associations voiced their displeasure, but effective measures against the job losses were not taken.

We are now in the midst of the 2.0 shock wave – one that poses an even greater threat to China’s trading partners: the drive into high‑tech manufacturing.

The shift away from the broad palette of low‑cost products of the 1990s was enshrined in 2015 as a strategic plan through China’s industrial policy “Made in China 2025” (MIC2025). The results show how seriously China takes the implementation of its stated goals.

There is no doubt that the MIC2025 plan reached the highest levels of government and business in Western industrial nations. However, their response was inadequate, because they were overconfident – convinced that their technological lead could not be caught up.

Already today, the result in global markets is a flood of high‑tech goods from China, which is increasingly becoming a major concern for European industry. It must be expected that this development will also take place in other advanced sectors.

Given this situation, it is essential to understand the underlying factors that make China’s investments so effective.

  1. Today’s industrial landscape is characterised by the speed of creative innovation, the sheer size of the domestic market and intense competition. The country’s recent advances in humanoid robotics, biopharmaceuticals and AI point to some of these success factors: a large pool of engineering talent and dense domestic supplier networks geared towards rapid product iteration and scaling.
  2. Typically for China, the rapidly growing number of manufacturers leads to pressure on profit margins. This inevitably has a strong impact on European suppliers operating in China.
  3. Chinese companies are flooding global markets with excess capacity from home, a process favoured by attractive exchange rates and the world’s highest levels of subsidies. The result is rising trade tensions.
  4. However, it is wrong to see state support – in other words, subsidies – as the main driver of China’s shift from cheap exports to advanced manufacturing. This is not only analytically weak, but also strategically of little help. Subsidies do not explain how China is increasingly transforming cutting‑edge technologies into manufacturable products.
  5. At this point, I would like to highlight some central differences that distinguish China from Europe today. On the one hand, there is the creative innovative and working capacity of its people and a pragmatism that ensures rapid implementation, even when obstacles stand in the way. On the other hand, Europe often faces over‑regulation, a lower willingness to change and structural impediments – for example in the realm of the welfare state.

Where will this trend lead? In China most likely to losses and bankruptcies – but in Europe as well. The cards in the industrial landscape are being reshuffled; Europe, however, has no answer – not yet.

Case study: One case study illustrating this rapid change is a sensor, that detects electrical leakage currents and thus serves as a safety device on charging plugs for electric vehicles. Originally this sensor was a speciality of German and Swiss mid‑sized companies. Initially, they sold this niche product for around 27 euros. With the boom in electromobility, China soon entered the field of these sensors as well – for example, the company Estron from Zhejiang province. In 2019, they produced just about 20,000 sensors; this year, they are likely to sell 10 million units. At the beginning of 2025, the price per sensor was 100 renminbi; with costs of about 40 renminbi, this yielded a handsome profit. Today, the price is 10 renminbi per unit.

This example illustrates three aspects:

•           China is repeatedly demonstrating its ability to pick up technological trends and further develop them. In line with this, Mr Huang He, who invests in Chinese industrial companies, said in an interview with the FT on 14 April 2026: “China is packed with engineers – technological hurdles hold out for at most six months to a year.”

•           As early as the August 2018 issue of the magazine “brand eins”, Austrian China expert Silvia Lindtner (Professor at the University of Michigan) predicted in an interview: “China wants to trigger a kind of mass innovation with an army of inventors and company founders. I warn against underestimating this plan.”

•           The sheer size of the domestic market enables companies to exploit economies of scale and offer products at unbeatable prices (deflation says hello).

With regard to global markets, Huang He told the FT in unsparing terms: “Companies that can survive in China are unbeatable worldwide” and “Chinese founders have to use all possible means to survive.” The intense and ruthless competition is currently symbolised by the term “nèijuǎn”, a phenomenon of relentless struggle for success.

“When China grows, Germany shrinks” ran the headline in Handelsblatt on 20 February 2026. If this forecast proves correct, one consequence would be that Europe is crushed under the weight of Chinese imports and its strategic industries ultimately lose out. Chancellor Friedrich Merz did indeed stress, after his inaugural visit to Beijing in early 2026, that German industry is heavily threatened by Chinese overcapacity and unfair competition. But he did not mention the dangers arising from innovation power, nèijuǎn and the flexibility of Chinese companies – nor that Chinese people simply work harder and China is not over‑regulated. French President Emmanuel Macron used much clearer words after his visit to Beijing: the boom in high‑quality Chinese goods is a matter of life and death for Europe’s manufacturing industry.

The primary body responsible for addressing this real threat is the European Commission. In March 2026, it began to respond more vigorously. The proposed Industrial Accelerator Act contains concrete responses to cheap imports from China that endanger European industry. Instead of passively watching Europe’s economic decline, this law sets out a concrete competitiveness agenda. In addition, retaliatory measures such as higher tariffs, trade barriers and restricted market access are currently being discussed within the EU.

This is encouraging, but how long will it take for all 27 member states to approve these changes? And can China’s innovative strength and its massive export engine really be stopped in this way?

Over the past 20 years, China has rapidly expanded its economic power and has become a genuine challenge for Europe. This increasingly generates fear in Europe, and the response is often to retreat into a defensive posture and carry on as before. But this attitude will not help us. In addition to the recent initiative by the European Commission, we must, in my view, work on two main obstacles if we are to deal with the existing challenges.

First, Europe’s population – and especially its business community – must be willing to shed existing prejudices and confront these challenges more directly. This also includes a willingness to learn from China: to understand the reasons for China’s rapid progress, for example in the automotive and mechanical engineering industries, and, where possible, to emulate and improve them (China, after all, began learning “copying” from us in the 1990s). Even the catchphrase “Fitness Centre China”, coined by Jörg Wuttke, long‑time chair of the EU Chamber of Commerce in Beijing, does not go down well in Europe, as it is seen as too provocative. But there is hope. Audi, for example, now promotes accelerated product development internally under the slogan “China speed”.

Second, in the midst of growing international tensions, it is time for a different mindset. Austrian sinologist Susanne Weigelin‑Schwiedrzik puts it succinctly: “We must consider the world with China, instead of simply leaving the People’s Republic out of our considerations because it is supposedly so foreign and different.”

Thirdly, Europe is confronted daily with seismic changes in the fields of technology, AI and robotics, many of which originate in China and the United States. These developments, as well as the impact of China’s powerful export engine, have a direct influence on our economies and our lives. Voices from Europe clearly point to existing and future threats and consequences – for example Gabor Steingart in his book “Systemversagen” (published in 2025), or the well‑known tunnelling entrepreneur Martin Herrenknecht from Baden‑Württemberg. In an interview with FAZ on 5 June 2026, he described the challenges as follows: “A mechanic here with us gets 49 Euros an hour, in China ten, in India 15 Euros. That is the biggest problem.” Another point for this hidden champion is that terminating employees in labour court proceedings costs between 300,000 and 400,000 Euros. And: “Bosch has paid more than four billion in severance. Just imagine that.”

The framework conditions for companies in Europe have changed dramatically. Consequently, cost structures and regulatory requirements would need to be adjusted to reality. In view of these threats, is it not time, for example, for a radical reduction of social systems, working hours, holiday entitlements and the retirement age? Could our neighbour Switzerland serve as a model? Across th border, a 42‑hour work week applies, there are fewer holidays, fewer sick days and employment protection is regulated more pragmatically.

Europe’s main competitors, China and the USA, are more competitive with their social systems and additionally faster in adapting. In China, the absence of a robust social safety net leads to more “capitalism”: low labour costs combined with a strong willingness to work hard. This advantage is likely to persist.

Comprehensive reforms are needed if European countries are to be better prepared for the inevitable confrontations ahead.

I write this third commentary point as an eligible voter and observer.

Chapter 146.1 China’s Hidden Champions: Little Giants

In March 2019, my son Stefan and I had a wonderful dinner guest in Hong Kong: Professor Hermann Simon. Widely known as the originator of the concept of “Hidden Champions”, we had no shortage of topics to discuss – and I received, as a gift, his book “Aufbruch nach Globalia”, inscribed with the dedication: “To Mr. Jürgen Kracht with best wishes – personally and for the Hidden Champion Fiducia.”

The term “Hidden Champions” was coined by Simon in 1990 in the context of a study. His prime examples then, as now, are specialised and innovative medium-sized companies that are market leaders in a niche, yet largely unknown to the general public. Simon’s research showed that, in 2021, there were around 1,900 such companies in the DACH region (1,574 in Germany, and 171 each in Switzerland and Austria). By comparison, the United States had around 350, and Japan slightly under 300. The unique density in the DACH region can be traced back to historical and structural factors. Taking Germany as an example: a federal political structure, an early orientation toward exports, excellent vocational training, and an industrial base that has grown over generations and is largely carried by family-owned firms. The strong resonance to Simon’s theses led, among other things, to the annual World Market Leader Summit in Schwäbisch Hall – in which I have taken part several times, learning a great deal and meeting potential clients.

Professor Simon travelled to China regularly over the years. He also led delegations of German mid-sized companies into the country, gave lectures to Chinese SMEs, and was interviewed by media such as China Daily. His analyses of technological strength, innovation and global expansion received considerable attention. In 2021, the Hermann Simon Business School in Shouguang (Shandong Province) 寿光西蒙商学院 was finally founded together with the entrepreneur Yang Shuren (Shandong Mourui Chemical).

China’s policymakers and SME sector appear to have listened closely to Professor Simon, because in 2016 they launched a copy of the concept: the industrial policy programme “Little Giants” (专精特新). The starting point was an effort to replicate the success of the German Mittelstand – or Hidden Champions. Beginning in 2018, the programme was implemented step by step, also as a direct response to the escalating trade conflict with the United States. The American export embargo on tech components was a severe blow to China’s fast-growing industry. The goal was to overcome so‑called “chokepoints” in critical technology sectors such as semiconductors, advanced materials and specialised software.

The programme is based on a structured qualification system in which local governments scout innovative SMEs and accompany them through several certification stages, depending on their level of development – such as “Innovative SMEs”, “Specialised SMEs”, “Little Giants” or “Manufacturing Champions”. At each stage, additional funding is released, but certification must be renewed every three years. This allows the state to concentrate its resources on those actors with the highest potential.

To be certified as a Little Giant, companies must meet five criteria: SME status, alignment with the key industries of “Made in China 2025”, solid economic performance, a high degree of specialisation, and demonstrable innovative capacity. Certified companies benefit from a comprehensive support package. This includes grants, tax breaks, subsidised loans and more. Added to this are integration into the supply chains of state-owned enterprises, partnerships with universities, and improved protection of intellectual property. At the regional level, provinces and cities often complement the national measures generously: the province of Guangdong, for example, has made financing commitments of 600 (!) billion CNY in cooperation with banks (Brown et al., 2023).

In parallel, since 2016 China has also been qualifying foreign companies, upon application, with the status of “High and New Technology Enterprise” or “Advanced Technology Service Enterprise”. This status grants companies with cutting‑edge technologies tax advantages and opens up new market opportunities. In our newsletter China Focus 1/2017, Peter Legner of Schenck Shanghai Machinery described the challenges of obtaining this status and the business benefits it brought to his company.

This dynamic has fostered an industrial clustering process of remarkable density. A look at Huangyan, an industrial district in Zhejiang Province, shows how far China has already advanced in building its industrial resilience. The district is home to an extraordinary concentration of highly specialised manufacturers of plastic components and moulds. Here, automotive interior panels, electronic housings and medical products are produced. Customers include global corporations such as Volkswagen and Tesla.

A MERICS report had already documented the progress by 2023: companies from the first phase, such as BWT Beijing (semiconductor lasers), Leaderdrive (robotics) and Endovastec (medical technology), had rapidly developed into domestic alternatives. Rockchip Electronics, one of China’s leading chip designers, is increasingly replacing Western semiconductors in tablets, set‑top boxes and IoT devices. For investors wishing to benefit from this growth potential, the Global X China Little Giant ETF (Hong Kong stock code 2815) offers a point of entry.

The majority of Little Giants are located in the Yangtze River Delta region, concentrated around Suzhou, Hangzhou and Shanghai, as well as in Guangdong Province, the greater Beijing–Tianjin–Hebei region and provincial capitals such as Wuhan, Changsha, Chengdu and Chongqing.

The crucial difference to Germany’s Hidden Champions is that China’s Little Giants benefit from a top‑down promotion programme, enabling them to achieve success quickly.

Yet key questions remain open: what share of the supported companies will survive in the long term, achieve lasting profitability, and ultimately make the experiment worthwhile for China? Whether these artificially nurtured players can survive without state support still remains to be seen. However, China’s market environment is characterised by a ruthless selection process. It appears that economic policy allows a large number of firms to take off (and at times even ignores its own selection criteria in order to include more companies) and then awaits to see who survives the competition.

The volatility of the system is illustrated by the example of Beijing Ande Medical Intelligence Technology: founded in 2018 as a medical AI company, it was certified as a Little Giant at the beginning of 2022 but was already insolvent by July 2023. For Beijing, the failure of individual players is essentially irrelevant, and losses are often swept under the carpet for image reasons. What matters in this approach is primarily that genuine champions emerge; the others disappear without tears. This is accepted as a necessary part of the process – like in Aesop’s fables, or in nature, where the strongest survive.

The consequences of this programme are considerable for Europe. According to various estimates, up to 40 percent of European exports could come under pressure (Manager Magazin, 2023). While in Europe there are growing calls for stronger protective measures for its own hidden champions, Hermann Simon recommends that companies position themselves in China as “insiders” and thus benefit from the country’s development (Xinhua, 2024) – because, so the argument goes, those who produce in China are less vulnerable to being replaced by local SMEs. This assertion will likely only hold true if DACH companies succeed in – and are allowed by their parent firms – acting in a “Chinese” way.

The First Marco Polo Club – (1970s)  – Sample read  from the chapter YESTERDAY

For many business travellers in Asia, the Marco Polo Club of the airline Cathay Pacific is something special, as the club grants frequent flyers a range of pleasant privileges. It is named after the Venetian merchant Marco Polo (*1254, †1324), whose epic accounts of his journey to China remain highly significant to this day.

In fact, however, the Cathay club had a namesake predecessor which, in a different era, played a completely different role. I had the good fortune to become a member thanks to my colleague Peter Hartlieb, then a director at Jebsen, in 1973. At that time Peter took me to a dinner at the prestigious Mandarin Hotel. I was grateful – and curious to see what awaited me. The event was organised by the lawyer Percy Chen, founder of the “first” Marco Polo Club. With this institution, he aimed to open a window onto a self‑isolated China by bringing together foreigners living in Hong Kong and employees of Chinese state institutions. Chinese officials were indeed stationed in Hong Kong, but how were you supposed to find the right contact, given that most state‑owned enterprises operated under pseudonyms? And for their staff, it was strictly regulated with whom they were allowed to meet – and of course everyone reported on everyone else to the Chinese intelligence services.

The dinners organised by the Marco Polo Club on the last Thursday of each month therefore offered a rare opportunity for us to meet informally with mainland Chinese stationed in Hong Kong. There were no membership fees; we simply paid for food and drink. Invitations were sent by postcard, which also served as the admission ticket. At that time, there were few invitations more coveted in Hong Kong’s international community than these!

Those present were typically foreign businesspeople, journalists (including some undercover spies), trade representatives and diplomats posted to Hong Kong (at that time the German consulate had a large staff). U.S. citizens and U.S. diplomats were not invited until 1972, due to the tense Cold War relations. On the Chinese side, staff from the Hong Kong office of the Xinhua news agency (effectively the unofficial Chinese “consulate”), the Bank of China and – crucially for us – representatives of Chinese foreign trade companies took part.

At the gatherings in the Bamboo Room we enjoyed cocktails, a Western‑style dinner and the screening of Chinese propaganda films: “China is making great economic progress, and the happy people all love Chairman Mao.” And, important for that time: “We are watching the imperialist Americans and their running dogs very closely.”

For me, working in the BASF department at Jebsen, the contacts made at the Marco Polo Club proved fruitful. They allowed us to expand our business relations and obtain clues about the right contact persons in the vast network of foreign trade companies – a suitable address in a provincial city was already valuable for our mailing campaigns, in which we promoted the advantages of BASF products. Occasionally, representatives in Hong Kong would approach us directly, requesting product information or passing on concrete import enquiries.

The Marco Polo Club had been founded in 1956 by Percy Chen (*1901, †1989), one of the most unusual residents of what was then the British crown colony of Hong Kong. Born in Trinidad into a wealthy, landowning Chinese family, he was educated at University College School in London and admitted to the bar in England in 1922. His father, Eugene Chen, served as foreign minister of the Republic of China in 1931 and 1932. In 1947 Percy moved to Hong Kong and established a law practice; later he was called to the bar as a barrister.

Percy was a tall, well‑dressed man whose personal lifestyle was marked by a taste for the good life – in other words, a champagne socialist (the Swiss would say a “Cüpli‑Sozialist”). What a contrast to the mainland officials in their blue Mao suits!

And yet, for us, Percy was a valuable bridge‑builder who helped build relationships with China. Remarkably, his deep loyalty to the People’s Republic of China was unmistakeable. Unlike many others, he was not motivated by money. As was customary at the time, the CIA kept a close eye on developments in Hong Kong. They monitored what Percy Chen was doing and whom he met. I only learned about this in 2003, from a declassified CIA report.

In 1979 his autobiography “China Called Me: My Life Inside the Chinese Revolution” was published. It is a book full of fascinating contrasts and contradictions. I highly recommend it: it is rich in history and filled with travel accounts and personal anecdotes from his life in Chiang Kai‑shek’s China and in Moscow.

Hong Kong, here I come! – (1971)  –  Excerpt from the chapter TODAY

When David von Hansemann interviewed me at Hamburg Airport in September 1970 for a position in Hong Kong, I had no idea that this meeting would plunge me into an adventure lasting more than 50 years. It began with a two‑year contract with the company Jebsen – and today, fifty‑five years later, I am still living here.

At that time, Hong Kong was firmly a British Crown Colony, and the political future of neighbouring China was uncertain; the country was only just recovering from the strains of the Cultural Revolution. China’s foreign trade volume with the rest of the world was weak. For example, in 1971 China exported a mere 272 million US dollars’ worth of goods to the European Economic Community (Belgium, France, Italy, Luxembourg, the Netherlands and the Federal Republic of Germany) and imported goods worth 323 million in the same year.

At that point, no West German firm was selling cars to China, no Austrian company was exporting machinery or Mozartkugeln to China, and Swiss watch exports to China were non‑existent. On the other side, as I recall, China was exporting items such as textiles, pig intestines (for sausage production) and simple wooden toys to Europe.

Wednesday, 6 January 1971 

For the flight to Hong Kong with Malaysia‑Singapore Airlines (MSA), I had booked a window seat on the right‑hand side. It had been recommended to me for the view – with the warning that it was not for the faint‑hearted. After a pleasant flight over the deep‑blue South China Sea, the pilot began a steady descent and, through the cabin window, I saw a multitude of picturesque islands and ships at anchor. Suddenly he pulled into a sharp right‑hand turn and, oh dear, headed straight for a huge red‑and‑white chequerboard painted on a large rock face. At the same time, the aircraft continued to lose altitude and, after another right turn, we glided slowly over Kowloon City directly towards the runway. Now I could see a row of tenement blocks beneath us; you could practically look straight into the kitchen windows and wonder what was being cooked for dinner. We almost brushed the television antennas and the laundry hanging out to dry on the rooftops. Moments later, we touched down on the runway projecting out into the sea at Kai Tak Airport. During the braking manoeuvre, I saw many ships in the harbour on the right‑hand side and, in the background, the skyline of Victoria Island, while on the left stretched a long mountain range.

The landing had succeeded. A good start, I thought, leaning back in satisfaction.

Until 1998, landing at Kai Tak was one of the most dramatic and charismatic approaches in the world. Because of the complex landing and take‑off procedures, all pilots needed a special permit to fly into Hong Kong.

Despite the risks, there were no horror crashes, though there were occasional mishaps. On one occasion, a CAAC aircraft from Beijing touched down too late and the remaining braking distance was not enough. The result: the plane slid into the water, though fortunately there were few injuries. In October 1983, a Lufthansa Cargo jumbo bound for Frankfurt ran into problems on take‑off – either due to inadequate load securing or an engine defect (I no longer remember). The pilot managed, with a sharp left turn at the end of the runway, to bring the plane to a halt on the ground just in time. No one was injured, but the Lufthansa cranes were painted over first of all – because the photos went around the world.

Thanks to a visa endorsement in my passport issued by the British Visa Office in Düsseldorf on 14 December 1970, immigration control went smoothly. My passport was promptly stamped with the entry: “Arrived by MSA (Malaysia‑Singapore Airlines). I, Director of Immigration, permit the holder to enter HONG KONG for employment subject to the condition that he leaves HONG KONG on or before 6 July 1971” plus another stamp, “ENTRY 6JAN1971”. With that, the way to the baggage carousel was clear.

The arrivals hall was filled with people; a few were waiting for incoming passengers, but most were schoolchildren sitting on the floor doing their homework in the air‑conditioned environment. At home, their flats were overcrowded, and air‑conditioning was a rarity at that time. For me, this was the first proof that the Chinese think practically and find solutions!

Note: The airport was closed in 1998, but it is still worth watching a Kai Tak landing from the cockpit perspective on YouTube today.

Mr von Hansemann, Managing Director of Jebsen Hong Kong, had arranged stopovers in Singapore and Kuala Lumpur for my journey to Hong Kong. The purpose was to visit the local Jebsen offices and get to know the teams for better future cooperation. I still remember the stay in Singapore well – Kuala Lumpur less so. In Singapore, Dirk Paulsen welcomed me for lunch; we are still in contact today – he now lives in the cool mountains of the Cameron Highlands, north of Kuala Lumpur. Back then, Singapore’s cityscape was very Chinese, much as it was described in older accounts: a lot of hustle and bustle, rickshaws everywhere, iconic shophouses and heavily laden Indian coolies.

It should be mentioned here that I had already visited Hong Kong for a week in June 1970. The trip was triggered by a one‑off payment of BAföG, the German state’s student grant. My former fellow student Hans‑Peter from Duisburg and I spontaneously decided to use the money for a study trip. So we bought an inexpensive ticket from Egypt Air and, with that, the itinerary was automatically set: Frankfurt – Cairo – stopover in Kuwait – Bombay – Bangkok – Hong Kong and finally Japan. There, our destination was the highlight of the year: the World Expo in Osaka. For the return journey to Europe, we took a Russian passenger ship to Nakhodka and from there the Trans‑Siberian Railway to Helsinki.

Looking back, the BAföG grant was an excellent investment: we experienced a great deal and are immensely grateful for the many impressions and encounters we had in Asia and later in the Soviet Union. The sheer abundance of impressions and stories unfortunately does not fit into this book. But one exception must be allowed: in Moscow, my friend and travel companion Hans‑Peter was approached and asked whether he would sell his Lewis 405 jeans. After a brief discussion with me, he agreed – and as a result we enjoyed several gourmet evenings with caviar and vodka. An interesting side note on “actually existing socialism”. From time to time, I dive back into that surreal era by rereading my diary.

 “If I were the boss” – First Foreign Factory Director since 1949 – Sample reading from the chapter YESTERDAY

In December 1984, Wuhan’s mayor, Wu Guanzheng, made a remarkable decision: he appointed the German Werner Gerich (1919–2003) as the first foreigner to head a Chinese factory since 1949. At the time, the news made headlines across China. In two years as director, Gerich transformed the Wuhan Diesel Engine Factory into a profitable enterprise, generating millions of dollars in export earnings. He wrote a book that became a handbook for factory managers throughout China. Few foreigners exercised such a substantial influence during the reform era as Gerich did. How did this come about?

The consequence was unexpected: in December 1984, Gerich was indeed appointed director of the factory. It was an unprecedented move: for the first time since 1949, a foreigner had been placed in a leadership position at a state-owned enterprise. Unsurprisingly, the news made headlines throughout China.

But let us return to the beginning. Born in Mannheim, Gerich was an engineer who worked for many years at Demag in Duisburg, a manufacturer of heavy machinery. In the 1970s, he had been among dozens of engineers from Belgium, Germany and Austria working in Wuhan as advisers, helping the Chinese install and commission a rolling mill purchased in Europe. Years later, in retirement, he wanted to put his knowledge and decades of experience to good use. He therefore registered with the Senior Expert Service (SES) in Bonn, an organisation dedicated to arranging international assignments for retired specialists.

On 8 July 1983, Deng Xiaoping delivered an important speech entitled “Making Use of Foreign Knowledge and Expanding Opening Up to the Outside World.” In it, he advocated employing foreigners in all areas of reform. In essence, he said: we lack experience and knowledge in modernisation. We must not be afraid to spend money to employ foreigners. Our opening to the outside world is still insufficient.

Around this time, Wuhan was selected as a pilot city for reform. It should be remembered that, in terms of transport and the economy, Wuhan is the centre of central China. This is also reflected in its industrial structure, which has traditionally been dominated by heavy industry.

Over the years, companies from North Rhine-Westphalia had repeatedly supplied industrial equipment to the satisfaction of Chinese customers. The first contacts dated from 1978 to 1982, when a European consortium built a cold-rolling mill in Wuhan. At the time, some 300 engineers and their families lived in the city. These growing relationships led, in October 1982, to a town-twinning agreement between Duisburg and Wuhan, which included opportunities for cooperation.

As a result, in 1984 the Wuhan municipal authorities approached the city of Duisburg with a request: could it recommend an adviser to help improve conditions at the state-owned diesel-engine factory? They also hoped to find a cost-effective solution. For precisely such situations, the SES was the ideal partner. Gerich became an adviser to the factory, and from this assignment emerged his later report on its desolate condition.

Mayor Wu must surely have secured political backing before appointing Gerich factory director. Even so, he was taking a risk. Marxist hardliners still existed and remained deeply sceptical of reform.

Gerich—known in China as Ge Lixi—was, in any event, the right man for the task: strong-willed, uncompromising and, at 1.80 metres tall, physically towering over almost everyone around him. But was he aware of the difficult legacy he was inheriting? Many state-owned enterprises had been profoundly marked by the Cultural Revolution. During that period, the revolution, rather than the product, had taken precedence. This stood in stark contrast to the large propaganda slogan displayed at the factory gate: “Production Comes First—Time Is Money.”

His first measure was to have broken windows replaced and the wastewater pipes repaired, since heavy rain regularly flooded the production halls. Gerich declared loudly: “You cannot work like this.”

Then he got down to business. The shift was supposed to start at eight o’clock, but many employees arrived later, and some only around lunchtime. Gerich therefore posted a notice at the factory gate announcing that, from the following day, work would begin for everyone at 8:30 a.m.—and that only employees who were present would be paid.

Such a measure had never before existed in the long-established socialist working environment, and many simply ignored the notice. On the third day, the closed factory gate came as a shock to latecomers. At the same time, it taught them that the new boss meant business. Naturally, this did not make him popular. But the workforce quickly realised that Gerich had the mayor’s backing.

Yet this was only the beginning. Every day, Gerich walked through the production halls and inspected manufacturing processes, armed with callipers, a feeler gauge, a magnet and a white glove. He checked whether the parts being produced met the required measurements, and he used the glove to test the cleanliness of the machines. Again and again, he interrupted his rounds to show workers how good quality could be achieved. He also demonstrated why—and how—machines had to be cleaned.

During his unannounced inspections, he saw employees who were not working but reading newspapers or sleeping. By his calculations, this amounted to an average of 70 minutes of “free time” per day. The result was a strict eight-hour working rule. A differentiated pay system was also introduced, with workers’ wages adjusted every two months according to performance. The number of employees was reduced as well. “The factory has 1,800 employees; in reality, it needs no more than 1,400,” Gerich said.

Workflows within the departments were also fundamentally reorganised. He drew organisational charts by hand and created job descriptions. From then on, he checked whether managers were present on the factory floor or sitting in their offices smoking.

All these measures naturally caused resentment. Here was someone determined to dismantle practices that had become comfortable over many years. But with Gerich, the era of the “iron rice bowl” was over.

In his first address to the workforce, Gerich said:

“The main purpose of my stay in Wuhan is to help the city produce high-quality diesel engines. I hope that you will all regard me as a friend and work with me to manufacture diesel engines with a long service life. We will use the facilities already available and combine them with modern business management.”

To advance the transformation, he introduced daily meetings at which managers and engineers had to account for their work and present proposals for improvement.

Gerich’s fundamental reforms did, in fact, produce an impressive turnaround. Annual production rose from 18,000 to 60,000 tractors. The rejection rate fell from 40 per cent to 10 per cent. The average operating life of the engines reached up to 8,000 hours, compared with only 3,000 previously. For the first time, products were exported to Southeast Asia. Most importantly, the Wuhan Diesel Engine Factory was now profitable.

Gerich ended his assignment in November 1986. On his departure, he was honoured for his achievements: he became an honorary citizen of Wuhan, an honorary professor of Wuhan University, and Beijing awarded him honorary citizenship. At a conference in Iserlohn in January 1986, Gerich recalled his Wuhan years: “I often had to bang my fist on the table in anger.” He also observed: “No one said, ‘This is my engine,’ or ‘This is my factory,’ as would be customary in Europe.”

A unique event followed on 2 July 1987, when Premier Zhao Ziyang received Werner Gerich in Beijing. He had been invited to report on his professional experiences at the Wuhan Diesel Engine Factory. Before the meeting, the German embassy briefed him on the protocol for encounters with senior political leaders. He was instructed to speak only when asked, answer questions briefly, and be prepared for the meeting to end after a short time.

But things turned out differently. The conversation lasted a long time and even had to be interrupted because the stenographers ran out of paper.

The Premier was keen to learn, first-hand and from a neutral individual without personal interests, about the condition of state-run factories and how it might be improved. Gerich spoke openly and used the opportunity to explain corporate management and business administration through the example of his Wuhan experience. He must have made a strong impression on the Premier, for an instruction followed to invite further foreign experts to China as advisers to key factories—with Germany expected to play a particular role in this undertaking. The meeting received extensive and prominent coverage in state media, including the People’s Daily.

For many years, my bookshelf has held the historically significant volume Ge Lixi Zai Wu Chai (格里希在武柴—Gerich at the Wuhan Diesel Engine Factory). Published in Beijing in 1987 by Enterprise Management Publishing House, it contains Gerich’s lectures on such subjects as modernising factory operations, quality management, personnel management, and his plans for restructuring the Wuhan factory.

Two unusual features distinguish the book. One photograph shows Gerich with Premier Zhao Ziyang, and the book contains a foreword by Zhu Rongji, who later became Premier. Zhu praised Gerich for his strict and consistent management style and gave him the title “Mr Quality.” The book became a bestseller and required reading for thousands of factory directors.

Two years after his death in April 2003, the city of Wuhan commissioned two bronze statues of him. One was presented to the city of Duisburg, where it stands in front of the Chamber of Industry and Commerce building; the other stands in Wuhan. Gerich thus became the fourth German to be commemorated with a statue in the People’s Republic of China—after Karl Marx, Friedrich Engels and John Rabe, the then mayor, Li Xiansheng, said in his speech: “We created these statues of Gerich to express our deep respect for him and our sincere appreciation for his great contribution to Wuhan’s economic development and to the reform of its enterprises.”

                                               **************

Werner Gerich’s recommendations were perfectly suited to the period in which China was beginning to orient itself towards a market economy. There is no doubt that his influence on developments during the reform era was considerable. His story makes clear the condition of industrial production in China in the early 1980s. All the more remarkable, then, is the country’s development since the 1990s—and the reality today.

The twinning partnerships between Wuhan and German cities reflected a desire for cooperation that extended beyond business alone. Today, however, we find ourselves in a different situation.

Alone in Tianjin in 1959    Working in Tianjin in 1959

Can the reader imagine having lived in ‘Communist China’ in the 1950s? Well, my friend Rudolf Kardel (*1935 †2022), known to everybody as Rudi, did. At that time there were hardly any foreigners in China, except Russian engineers as part of the Sino-Soviet Treaty of Friendship signed on February 14, 1950. For a start, Rudi had to submit an official invitation letter to the China embassy in Copenhagen to be granted an entry visa. (Denmark and Switzerland establisheddiplomatic relations with China in 1950, West-Germany only in 1972).

Here begins his story: “In May 1959 I took a train from Hong Kong to Guangzhou, there connecting to Shanghai and finally on to Tianjin. Here I was tasked to head the office of Jebsen & Co. (2) which had been in existence since 1897. It was the start of a very difficult two-year assignment which ended with the office being closed by me.” 

Rudi had originally worked for Jebsen in Hamburg and was in 1956 transferred to the company’s shipping department in their Hong Kong office. At that time the China government made it a condition for foreign companies with assets in China to station a foreign representative there – practically as a collateral for potential liabilities. This meant that the departing foreigner had to be replaced before him being permitted to leave China. Jebsen assigned Rudi to the task as the nextrepresentative in Tianjin. At that time the office’s key activities were acting as shipping agents for Hamburg Amerika Linie (HAPAG), Norddeutscher Lloyd, Messagerie Maritime, Ben Lin and representative for the Jebsen ships.  This was an important task, as after all even during China’s almost total isolation there were limited trading activities. And this necessitated shipping connections with the outside world. Jebsen, and some other European trading companies also maintained offices in Shanghai; as did HSBC. But the latter’s presence was more for historical reasons and to ensure an uninterrupted presence in China (after all the bank was formed in Shanghai in 1865) also in difficult times. In fact, for many years after 1949 HSBC had no business in China, but the office was maintained by a British ‘caretaker’. 

Back to Rudi’s story. He arrived in Tianjin East Railway Station on May 6, 1959. There he took a tricycle to the Tianjin Hotel (3), where he rented a large suite for 360 yuan a month. He spoke no Mandarin, and the hotel staff did not speak English. His office was 10 minutes’ walk away. Its staff numbered 12, working in shipping, import and export; nine of them spoke English. Life was really tough for him as he had hardly any contacts to the outside world. At that time, the Maoist government was strongly anti-Western; especially after the Korean War (1950 – 1953) when Chinese soldiers fought those from the United States and other Western countries. Hence, contacts with foreigners were forbidden or strongly restricted for Chinese. In addition, staying informed on world events was nearly impossible as there was no English newspaper, no foreign radio stations and of course no TV in the room. Being alone, Rudi quickly established contact with the German Frank Gut, who oversaw Eutraco Trading, a Swiss company – see chapter xxxx. “Frank was a great help to me in the beginning and gave me many informative guidelines and tips, which were important to know about living in Communist China,” and Rudi continued: “He invited me for dinner at their bungalow where I met his Swedish wife Aina and son Christian, two years old. Since their arrival half a year earlier, they had practically no contact with anyone in this large city. They were lucky that the company had kept the house which for many years was occupied by his predecessors, the German branch managers. The cook and housekeepers had remained in their employ. If the cook was able to secure meat or poultry or vegetables on the black market, we shared them and had dinner together.” Together with the couple, Rudi also entertained visiting friends and colleagues from Beijing and Shanghai at his hotelsuite. “After dinner, we had drinks and cigars or cigarettes in the suite. Many late nights were spent there dancing and singing to our bring-along musical instruments.” 

A funny story typical for the time: Swiss colleague, Lutz Ziehler, who also worked for Eutraco left for home because of insufficient work. For a farewell present (and as a joke), Rudi and Frank presented him with a large statue of Mao Zedong, Mischievously, they handed it to him through the train window as it was leaving the station in Tianjin. When Lutz arrived in Guangzhou, he left the statue in the train; they had sufficient baggage and did not want to carry it. And understandably they really did not want to keep it! Here they checked into a hotel. Before checking the next day, a hotel messenger knocked on the room door and presented them with the ‘forgotten’ statue. Lutz thanked the man for his kindness, he actually wanted to say, “keep it because I do not want it”. But he realised this was a bigNO as it could have been construed as a serious offence. So, Lutz hid the statue in a hotel toilet and proceeded with his wife to the Guangzhou train station. But lo and behold, a member of the hotel staff appeared at the station and handed over the unwanted item. Poor Lutz, he now had no choice but to take it to Hong Kong. Only there could he finally dispose of it; lucky for him this was not an offence over there. 

Daily work was cumbersome and time consuming. “There was no telephone connection from Tientsin to Hong Kong. Therefore, I called Iver or Heinrich in Jebsen’s Shanghai and they relayed my messages to Hong Kong. It was an open secret that all telephone calls were bugged and therefore we only spoke our southern Danish dialect Sønderjysk (spoken in the border region of Denmark and Germany) to confuse the system.”

Without a travel permit, Kardel could only travel within a radius of 20 kilometres around Tianjin. This meant that he needed a permit to visit ports more than 20 km away to attend to the foreign vessels berthing there. Usually it took two-three days for the permit to arrive, but increasingly it took longer meaning the permit was received after the ship had already left. As this was unacceptable for his work Rudi wrote a protest letter to the port authorities. But then hell broke loose: He was ordered to appear in person at the port office with his assistant as translator. “I was given a long and serious lesson on the new Chinese rules and regulations and told my letter was considered a hostile act towards the government. I was expected to apologise and take the letter back as such correspondence was not tolerated.” Rudi was interrogated for two days, confined to the same chair, but refused to apologise. 

Strangely, shortly afterwards the manager of the Tianjin Hotel informed him that the hotel did not want long-staying guests, he should move out. But in fact, the occupancy rate was less than 20 per cent! When the staff stopped cleaning the room or change the sheets it became clear to Rudi that they wanted him to leave.  Rudi being creative, realised a different solution: he got a partition erected in the office and bought a second-hand bed. He slept there and went to a public bathhouse every morning at 0800 hours to clean himself.

The Tianjin winter was long and cold; not only that Rudi continues: “The biggest and most uncomfortable nuisance were the rats in my old buildings. They made me feel very uncomfortable. They soon found the place where I hid my consignments from Denmark, which I would rather have shared with someone else. The rats were uncontrollable; they took even the soap in the washroom as a meal. After the staff had left the office, I sometimes sat in a chair with an air gun waiting for the beasts to come out of their hiding place under the decayed floorboards and shoot at them. The rat poison was either of bad quality, or the animals were immune to it.” 

But Rudi also coped with this challenge as it was businesswise important for Jebsen to maintain their presence in Tianjin.

His sleeping in the office was reported to the city’s Foreign Affairs Bureau. Surprisingly, they provided him with ration cards for his daily food. But, even with these, food was in short supply; his cook Ah Chow had to buy whatever was available. “He was very friendly and helpful and spoke English. Of course, he was also a spy who had to report my movements and with whom else I was speaking. For me, every staff member was a spy as well as every Chinese I was connected to. Perhaps this was not what they wanted; but they had to report everything they had seen and heard at daily political debriefings.” 
Jebsen’s Denmark office offered to send Kardel monthly food parcels; since the transport time was six weeks, they contained only dried food like soup, tinned butter, cheese and sausages. When he opened the parcels, he found the content mixed up – every single item had been inspected. But he never found anything missing. 

Beijing trips

Rudi was also greatly helped by the Danish ambassador in Beijing, Hans Bertelsen. The two had a verbal agreement, under which the ambassador would invite him under some pretext every three weeks to come to the embassy. For such trips an invitation was needed so that Rudi could obtain a travel permit for the dedicated route, i.e. to Beijing. He drove there in his eight-seater Volkswagen which he stocked up with cigarettes, whisky, gin, foodstuffs and body care products, as well as gasoline. These visits were a welcome change to his daily life and also enabled him to meet the foreign community in Beijing and happily join their parties; most worked for foreign embassies. He usually timed his visits for the weekend, to take part in these social events. 

“I often went to Beijing. On one of my frequent visits, I was accompanied by my Russian friend Valentin Sosnin, or Sos. Instead of the car, we took the train. Along the way, we saw the backyard production plants and furnaces set by the communes to produce steel. This was in line with the ‘Great Leap Forward’ announced by Chairman Mao in the second Five-Year Plan from 1958-1962. However, in late 1959 party officials were very unhappy as the steel produced by the back yard furnaces was too weak to be of any used for its intended purpose in the construction industry. Also, manufactured farm machinery fell to pieces when used due to poor quality. ‘The Great Leap Forward’ had been a failure and even Mao admitted this.”

Another trip 

On another Beijing trip, Kardel checked into the Xinqiao Hotel in the Dongcheng district. Together with the Beijing Hotel, these two were designated for foreigners. “One day Sos’s friend Jack Obradowic from the Czech or Hungarian Embassy (I cannot remember) suggested play poker with his friend Morris Cohen. Right away it struck me that this must be the famous ‘Two Gun Cohen’. I was very proud of meeting him personally as I had heard a lot about him.”

Morris Abraham Cohen (*1887 †1970) Colourful Trickster Turned Chinese Legend and Hero of Israel

had an extraordinary life: born in 1887 in Radzanow, not far from Warsaw. At the age of three, he joined his father Joseph who was working in a garment workshop in East London. The young Morris was unruly, arrested for pickpocketing and preferring boxing to study. In1905 Cohen’s parents sent him to Saskatchewan in western Canada. There he worked as a farmland and learnt to shoot with two guns, hence his nickname and he also he learnt how to cheat at card games. During that time, he developed a friendship with the Chinese restauranteur Mah Sam who was a strong supporter of Sun Yat-sen, the leader of the revolutionary movement in China. So, Cohen joined the Calgary branch of Sun’s secret society and underground resistance movement Tongmenghui. This led to the introduction to Sun, and he became his bodyguard as well as arms dealer for the Chinese government. After Sun’s death in 1925, Cohen remained close to Chinese politics as well as being the bodyguard of his widow Song Qing-ling. He stayed on in China for decades and was involved in numerous activities including arranging arms purchases from Western countries. In World War Two, the Japanese interned him in 1941 in the notorious Stanley prison in Hong Kong, in 1943 he was repatriated to Canada through a prisoner exchange.  

In 1947, during the UN debate on the future of Palestine, Cohen was asked by the Zionist delegation to persuade the Chinese delegation to abstain rather than oppose the planned partition into Jewish and Arab states. China did and their crucial support paved the way for the foundation of Israel in 1948. And until today Palestine remained a mandated territory. 

His extraordinary contribution to China was such that, after 1949, he was one of the few people allowed to travel freely to both the mainland and Taiwan. Cohen died in 1970, aged 83. He was buried in the Jewish cemetery in Salford, Manchester. Madame Sun Soong Qingling paid for his tombstone: ‘This is the tomb of Ma Kun inscribed by Soong Qingling, vice chairman of the People’s Republic of China Beijing.’ Extraordinary for that time, both representatives of the Beijing and Taipei governments attended the funeral. (4)

 
“This introduction turned out to be an expensive one for me…. First, I had to be taught all about the game of Poker which I had never played before. Immediately I won a couple of games. Was this ‘beginners’ luck or I had been tricked? Anyway, I liked the game and during my two days stay in Bejing we played poker from evening until early morning hours but both evenings I was at the end the absolute looser.” Still, he continued “I had never imagined playing poker with a man who had been famous in the China of Sun Yat-sen and Chiang Kai-shek.” 

Long Departure 

In early 1960, the Jebsen management in Hong Kong decided to close the Tianjin branch. Kardel wrote a letter to the authorities outlining the reasons and necessity for winding up the business after operating there for many years and ask them for approval. “The People’s Republic of China does not need any foreign assistance after more than 10 years of liberation. All trading activities have achieved excellent results thanks to the good leadership of corporations like CNIEC (China National Import & Export Corporation),” he wrote. But the Chinese refused to permit the closure until Jebsen made payments and taxes totalling 310,000 Yuan (540,000 Deutschmarks). Instead of remitting shipping commissions to China, the company’s principals had sent them by mutual agreement to the Hong Kong office. Kardel found many excuses why the money was kept in Hong Kong. But the authorities considered him ‘an unfriendly person unwilling to co-operate’. Finally, in March 1961, the Bank of China confirmed that it had received a foreign exchange payment equivalent to 310.000 renminbi. After almost a year of negotiations, the authorities finally approved the liquidation of the Tianjin office. 

“During the year long waiting period, I had a great deal of free time as we had been ordered to stop all business activities. So, there was nothing to do but wait for the authorities’ approval to close the office. Fortunately, when I went last to Hong Kong, I had purchased a bicycle which I took along to China together with my other belongings. At customs in Shenzhen, all my goods were thoroughly inspected by a young female officer before they were released. Not approved was a parcel of condoms; the lady said that these would not be needed in China. I told her that I might need them for the sake of safety. She blushed, saying ‘not in China’. So, they were confiscated. “Speaking of sex, I must say that it was very difficult, if not impossible, to make friendships with local ladies that led to a sexual relationship.” This is not the right place to continue Rudi’s adventure stories here, except to say that his Russian Friend Sos, who spoke excellent Mandarin, and his eight-seater Volkswagen were useful.

Goodbye 

Finally, after one year of waiting, all the procedures were completed. Kardel packed his personal belongings and company files and records. Together they travelled back to Hong Kong on the Jebsen steamer Heinrich Jessen. Back in Hong Kong, Kardel resumed work in the Shipping Department, in charge of customer service.
 

And this is how Jebsen Group Chairman Mr Hans Michael Jebsen remembered him: “Fondly known as ‘Rudi’ amongst his friends and peers, he was an inspiring colleague and a well-liked leader. He put his mind and soul into whatever he did, always setting the bar very high. Personable, humorous and upbeat, he made an impression wherever he went, and he will be dearly missed by all whose lives he touched and by the Group to which he made lasting contributions.” (5) Rudi’s life and work experiences in the late 1950s in ‘communist China’ give us a colourful insight into a totally closed country. Remember, very little was known about the domestic developments to the outside world.  Rudi’s survived the daily challenges remaining calm and collected. ‘Just let things come to you’. And his ability to make friends easily was also an advantage for survival in those times. Some 15 years later his and my paths crossed in Hong Kong and a great friendship developed (see chapter xxx). During our many Years of friendship and drinking sessions Rudi shared his experiences with me and permitted me to reprint his written account of the times in Tianjin.

What did not fit in the final print version

No Gospel Without Opium -Excerpt from chapter BEFORE YESTERDAY

On Wednesday evenings, right in the heart of the city in Happy Valley (跑馬地), there is a place that pulses with life when the horses thunder around the racecourse – a tradition dating back to the 1840s that continues even now, 29 years after Hong Kong’s handover. Thousands of betting enthusiasts soak up the merging backdrop of sparkling lights, horses and entertainment. For locals and visitors alike, it is an impressive and exhilarating spectacle, with the chance to win – or lose – a lot of money at the betting counters.

Before immersing yourself in this rush of energy on “Happy Wednesday”, however, I recommend a short diversion to the opposite side of the street. There, just behind the entrance to the international cemetery, you will find a grave bearing the inscription: “First Lutheran Missionary in China 1803–1851. Karl Friedrich August Gutzlaff.” Born on 8 July 1803 in Pyritz in Pomerania (today Pyrzyce in Poland).

Gützlaff was, despite his short life of only 48 years, a man full of contradictions: adventurer, Lutheran missionary, interpreter for the British government, opium trader and official in the British colonial administration – including in Hong Kong – as well as administrator of the captured cities of Ningbo and Zhoushan. Contemporary Chinese accounts describe him as a fair governor who enjoyed the respect of the people. If anything of significance happened in China between 1830 and 1850, he was likely present.

In 1826 he went to Indonesia on behalf of the Netherlands Missionary Society to spread the Protestant faith. This was followed by stays in Siam (today Thailand) and Malacca (then a Dutch colony, now part of Malaysia), where this linguistic prodigy learned Thai, Khmer and Lao. In February 1831 he finally landed in Macau. Shortly afterwards, Gützlaff settled in Hong Kong, a trading metropolis that was growing rapidly.

A gifted linguist, he learned Mandarin, Cantonese and Hakka and used these skills to translate the Bible. In addition, the Pomeranian adventurer was one of the first Protestant missionaries to train Chinese evangelists – all with the aim of spreading Christianity in the Chinese hinterland.

By that time, a number of British trading firms had established themselves in Hong Kong, after the British Parliament in 1834 had revoked the East India Company’s special rights to trade with China. Their captains were fearless and highly experienced in navigation, but they lacked language skills and local knowledge. This is where Gützlaff’s talents came into play.

The bold William Jardine and his partner James Matheson, with their firm Jardine, Matheson & Co. (which still exists in 2026!), were interested in the highly profitable, if more risky, direct trade in opium along China’s east coast – that is, trade conducted without Chinese middlemen. During the planning phase, Gützlaff received a letter from William Jardine, who wrote: “Without hesitation we tell you that the sale of opium is to be the chief source of revenue of the voyage,” the letter begins. “It is, after all, absolutely necessary to give every ship the means of defraying its own expenses. We therefore hope to be sure of your services as translator on every occasion on which they may be required.” 

The letter to Gützlaff continues: “The more profitable this expedition is, the easier it will be for us to place a certain sum at your disposal, which may in future be of use in the prosecution of your great missionary work – in the success of which we take a very strong interest.” Gützlaff considered the offer – but not for very long. From 20 October 1832 onwards, he was on board the Sylph (according to Paracelsus: light, agile and slender), then the fastest ship in the region, loaded primarily with opium. In the hope of opening up new markets, the ship called at all the important Chinese port cities – right up to Tianjin – over a period of six months. The expedition was a commercial success for Jardines – and a success for Gützlaff’s interests as well. He was allowed, after completing his translation work, to distribute his religious texts along the route. He also handed out a Chinese-language magazine he had edited; Jardine, Matheson & Co. had covered the printing costs for six months as an additional incentive.

On these voyages, he blended into everyday life by wearing Chinese clothing and relying on his excellent command of the language. Along the way, he impressed people even at first contact with his piety and his total commitment to the Christian cause in his sermons.

In the end, his two radically opposed activities brought great success. For the British, Gützlaff was an indispensable intermediary as an interpreter in negotiations with Chinese authorities. In trade, he supported the daring British merchants and helped them scout out new markets – while also instrumentalising corrupt officials in the coastal cities. At that time, the emperor regarded his people’s widespread opium consumption as a grave thorn in his side. During the negotiations of the Treaty of Nanking between the United Kingdom and the Chinese Empire in August 1842, which ended the First Opium War, Gützlaff served as interpreter. He can be clearly identified in the famous painting of the treaty signing aboard HMS Cornwallis. With this treaty, the British achieved almost all of their war aims, plus the annexation of Hong Kong. For the Chinese, this first “unequal treaty” marked the beginning of a century of crisis.

Gützlaff was certainly aware of the opportunistic nature of his dealings. But in his dual role as interpreter for the opium ships, he saw a chance to advance his goals as a missionary. The path to that point had been arduous: gruelling journeys, the learning of Chinese dialects, and the tragic loss of his wife and daughters. Aboard the Sylph, he finally saw a way to put his mission into practice. Ultimately, what remains for us is a legacy that is both positive and negative – but deeply impressive.

The fascinating life story of Karl Gützlaff, however, ended in bitter disappointment. On his return from a trip to Europe, he discovered that many of the Chinese pastors he had trained had sold a large portion of the Bibles intended for distribution back to the printing house and, worse still, had used the proceeds to finance their own opium consumption. This “circular economy”, in turn, generated windfall profits for the printers, who were paid yet again by Gützlaff for the next print run. He never recovered from this bitter – though in China not unusual – life experience. Gützlaff died a few months later in Hong Kong, at the age of just 48.

At least his services to the colonial government received recognition in the naming of Gutzlaff Street. It still exists today, on the edge of the entertainment district of Lan Kwai Fong in Central.

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