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When Volkswagen Entered China

"Prospects were not promising, as China was not prepared to allow direct investments, nor was there a ready market for automobiles," Kiep wrote. "Only officials were allowed to have cars." On the plus side, they wanted better cars than the junkers made in China at the time, and they realized demand would grow. Kiep engaged Shanghai leaders during a 1984 visit, and worked to complete plans for the plant, where production began in 1985.

Soon afterward, Kiep turned up in Tokyo, meeting with Shoichiro Toyoda, son of Toyota's founder. They discussed the Shanghai deal. "He said, 'Have you done that? Are you out of your mind doing something with the Chinese?' because they would steal the technology," Kiep said. "But two years later, Mr. Toyoda followed our example."

In 1988, Kiep was again in China, where he still visits regularly. He learned that First Automobile Works in Changchun was expected to sign a deal with Chrysler, but was hesitating. "I was asked directly: Would Volkswagen be interested in a second joint venture?" The subsequent arrangements excluded Chrysler and led to establishment of the first Audi production line in China and then to a VW line. Today, China is VW's largest single country market.

Kiep's book is full of similar tales in which, as a charming representative of a country that seems always ready to do business, he engages people at every level.

Of course, at his core, Kiep embraces German precepts, including austerity for Europe. Regarding the current crisis, he said that what is most important is that "the German government supported by the French government has convinced all the members of the European Union to accept a certain fiscal authority of the European Commission in their budget policies, so that countries cannot over-invest or overspend," he said. "This is the only hope we have.

"The European Union and its cooperation has the greatest importance for Europe," he said. "Eventually, this step for fiscal control is the first step to create a unified Europe (although) I will not live to see it."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

>To follow the writer on Twitter, go to http://twitter.com/tedreednc.
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