German development programmes go back as early as 1981 when Carl Duisberg Gesellschaft (CDG) started their capacity building training in China. One year later a framework agreement was signed by both governments, laying the grounds for fully-fledged technical co-operation. This agreement is still in force today.

In this particular field, several German agencies are ready to assist their Chinese partners, of which the German Development Corporation (GTZ) is the most prominent.

Another important agency is InWEnt, a merger of the development institutions CDG and DSE, which serves as a human resource development and capacity building institution.

Every year, the German Senior Expert Service (SES) sends several hundred short-term experts to China to assist companies, institutions and official authorities to fulfil their tasks.

CIM, a human resources provider, runs an integrated experts programme that places highly qualified and professionally experienced experts, mostly from Germany, in Chinese organizations for several years in order to bridge temporary gaps in human resources. A regular local salary for the integrated expert has to be provided by the Chinese employer and the German Government will top it up.

Besides these organizations, several other private German institutions are financially supported to join programmes with Chinese partner organizations.

The second pillar of Sino-German development co-operation is in the financial sector. Financial co-operation with China encompasses soft loans and an increasing amount of development loans that blend market and privileged terms. If certain prerequisites are fulfilled, even grant loans have been issued. Entrusted with the implementation of financial co-operation is the German Development Bank Kfw.

After so many years an understanding has developed which is based on mutual trust and respect. In this way it is possible to support China efficiently to achieve its own development targets. One principle is that German assistance is not meant to solve local problems or to fill financial gaps, but joint programmes are identified where German knowledge can bring innovative elements into the Chinese reform process, which are not yet available locally. Dissemination of the results, integrating them into the overall development of the country is a task of the local authorities themselves.

To bundle resources and increase the significance of the German contribution, both sides agreed to concentrate their co-operation mainly on three sectors: Firstly, environmental protection, energy and the sustainable use of natural resources; Secondly, sustainable market economy; And thirdly, the transport sector. Some additional programmes are also being implemented in the health sector.

A special emphasis is put on energy efficiency, energy saving, and renewable energy, as well as the protection of the environment in other aspects. This reflects for example the importance of protecting global public goods such as climate or biodiversity, helps save scarce natural resources and is intended to support the Chinese Government in reaching its set benchmarks in these fields.

An aim of German-Chinese development co-operation is to establish a key partnership in selected key areas of development. Thus the focus of this co-operation is not on the provision of hardware but on knowledge transfer and exchange of views and expertise in a search for state-of-the-art solutions to tackle China's challenges.

Given China's growing financial and economic power, it has become increasingly important that it handles more tasks itself and also shoulders adequate and growing counterpart contributions, especially as far as funding is concerned.

With regards to regional aspects, German commitments focus on the western and the northeastern regions, unless the programme operates on a national level.

At present a German government delegation headed by Schaefer-Preuss, director-general from the German Ministry for Economic Co-operation and Development, is holding bilateral negotiations with their Chinese counterparts from the Ministry of Commerce and the Ministry of Finance on the future co-operation plan.

Up until now the German Government has entered into direct commitments of 2.87 million euros (US$3.67 million) for grants and soft loans, not counting further considerable contributions which were made available in other forms.

(China Daily 09/13/2006 page18)