Rhineland-Palatinate: New life for the battered Oak Garden?

Rhineland-Palatinate: New life for the battered Oak Garden?

Rhineland-Palatinate as a business location is becoming increasingly attractive for investors from China. Prime Minister Alexander Schweitzer is actively promoting stronger trade relations, especially with the Chinese partner province of Fujian. In recent years, the trade volume between Rhineland-Palatinate and China has grown to almost six billion euros, which underlines the relevance of this market. Schweitzer emphasizes the desire for constructive and reliable relationships as well as fair competitive conditions in various industries such as biotechnology, pharmaceuticals, chemicals and automobiles. Rhineland-Palatinate sees itself as a modern country and a reliable partner for China's business interests, especially in light of US customs policy.

The ties between Rhineland-Palatinate and Fujian have existed since 1989. This long-term partnership opens up numerous opportunities for exchange and growth in both regions. “We are setting framework conditions for investments in order to promote positive economic development,” continued Schweitzer.

The Oak Garden: A Failed Project?

A German-Chinese trading center called “Oak Garden” was originally supposed to be built in the Birkenfeld district with the aim of creating an industrial area on a former US military site. Eight years ago, Andreas Scholz presented the plans for a three-hectare area that would house 18 office buildings for up to 500 retail companies. These companies should act as a link by importing Chinese goods to Europe and exporting regional products to China.

However, the corona pandemic represented a massive setback for the project. Many Chinese investors withdrew or disappeared completely. By 2017, more than 200 companies were registered at Oak Garden, but almost a quarter have now ceased operations. Of the 18 office buildings originally planned, only two have been completed, while one is still under construction.

Legal problems and financial difficulties

There are currently several insolvency proceedings underway against German companies that are managed by Chinese managing directors. The fate of a hotel run by a Chinese investor is also becoming a problem because it has been closed for three years. According to reports, many of these companies have neglected social security obligations and tax payments amounting to over 100,000 euros. The Koblenz public prosecutor's office is investigating possible delays in insolvency.

In addition, there are difficulties in dealing with the Chinese managing directors, as insolvency administrator Anne-Marie Dhonau reports. Some Chinese homeowners in Oak Garden are not paying house fees, leading to financial problems and planned foreclosures. These arrears vary between 2,000 and 17,000 euros.

The district administrator of the Birkenfeld district is planning a meeting with representatives of Oak Garden and the IHK to find a solution to the existing problems. Former mayor Bernhard Alscher expresses regret about the development of the project and sees it as a lost opportunity for the region. In contrast, Xiao Liang, managing director of the “Goldene Brücke” company, remains optimistic and believes in German-Chinese relations, while Andreas Scholz notes that the corona pandemic represents a significant hurdle, but it does not mean the end of the positive future of the Oak Garden.

Overall, it shows that despite the difficulties, there is also potential in cooperation with China, which encourages Rhineland-Palatinate to continue to play an active role in international economic traffic. While the state government favors framework conditions to promote exchange, it remains to be seen how the situation in Oak Garden will develop.