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The Man in the Middle Kingdom

The March 10 kick off a series of international cultural festivals in Ritan Park, Beijing's very first SwissFest, provided the backdrop for the launch of Leica Geosystems' latest product, the SmartRover-the world's lightest cable-free RTK GPS system.

The Swiss Chinese Chamber of Commerce Beijing (SwissCham Beijing) hosted a week long social and business event, bringing together a number of Swiss companies, accompanied by a programme of business talks and cultural events, aimed at promoting trade and economic exchanges between Switzerland and China.

 The president of Leica Geosystems AG in the Greater China region, Peter Lippmann, attended SwissFest and delivered a speech. The company, based in Heerbrugg, Switzerland, is one of three independent companies under the Leica brand. Alongside Leica Camera and Leica Microsystems, Leica Geosystems provides professional devices used to capture, analyse and present spatial information, from construction lasers for pipe-laying to detailed geographic imaging software.

Lippmann arrived at the top China position last March as Leica began to specifically target the Chinese market, in a move away from its previous inclusion in the Asia and Pacific region. Lippmann is no stranger to Asia; he was in China as early as 1982, as one of the first Europeans doing business in the Middle Kingdom.

"Back then it was a day by day challenge. All business had to be done through the foreign windows, the import export companies that essentially controlled everything. And there was little business infrastructure. One time we had seven European business representatives in Beijing and had to house them all in two hotel rooms."

From 1982 to 1985, Lippmann ran the Chinese operations for German machine tool group Supfina. From there he moved to the offices of famous German industrialist Otto Wolff, where he was heading up their Beijing dealings. During this time Wolff was engaged in negotiating the first bilateral trade agreement between China and Germany.

From China, Lippmann moved to the United States before returning to Honk Kong in the mid-90's to run the far-eastern operations of a number of European companies in the automotive and machinery manufacturing sector.

"Sometimes in China it's hard to understand the decision-making process. The hierarchical structure means that everyone has the right to say 'no,' but no one wants to say 'yes.'  In the US a decision is made very fast and then everyone knows what's happening. In China, it generally takes much longer, and sometimes customers can be very demanding."

Lippmann has overseen the establishment of numerous joint ventures since his early days in China, yet clearly notes the progression and development of the business sector.

"The problem with most JVs is conflicts of interests. The foreign company saw it as a vehicle for access to the Chinese market, while the Chinese saw it as an opportunity to sell overseas."

The Chinese Government also had its own priorities in achieving a knowledge base. These factors were never spoken about in the boardroom, and so, according to Lippmann, most joint ventures in the early days failed.

"From a practical standpoint it's much better to go alone. With local partner management there are internal frictions and questions on how to cooperate. In China, money is not always the key issue. Normally, the most important thing is a continuation of mutual trust."

In his position with Leica, Lippmann is in charge of strengthening the Chinese organisation. This translates as a drive to substantially increase their market share in the face of growing competition from Japanese and US companies, alongside the rapidly developing local sector. Competition is fierce, and intellectual property rights infringements have been a problem. However, the times are changing and Lippmann believes in the Chinese legal system. Leica closely monitors international competition. If they discover anything questionable, they go the legal route to resolve the issue.

"China now has ways to apply the law. As Chinese companies become more active overseas, the legal system is improving to protect their own copyrights."

Trained as an engineer, alongside an MBA and a law qualification, Lippmann's job is to oversee the whole industry to ensure that Leica maintains a prominent position in the market.

"We know we have excellent products, and are confident that we have something to offer. In China, we need to work hard in making ourselves known. Then we either win or lose a project. If we lose, we must analyze why and adapt accordingly. I often have to put myself on the other side of the desk and understand where the customer is coming from and what they want. We therefore work hard on our sales support."

In June 2006, a full-service facility for Leica Geosystems' products will be opened in Wuhan, in Hubei Province.