Ladies and gentlemen,

The Business Forum at the Ambassadors Conference has grown dramatically from its humble beginnings, and it is indeed my pleasure to welcome the 700 and more German business representatives who are here today. I hope that after today's plenary and the working sessions, you will go back home reassured that the Federal Foreign Office is busy representing your interests professionally and with considerable dedication. I would like to express my special thanks to my Cabinet colleague, Peer Steinbrück, as well as to Dr Hambrecht, the Chairman of the Board of Executive Directors of BASF, for joining me in opening this event today.

“Asia-Pacific: Changing the World” is not just the motto chosen for the upcoming Asia-Pacific Weeks in Berlin and the major Asia-Pacific Conference organized by German business in Seoul in early October. It is first and foremost a description of today's economic reality!

Before the decade is over, the Chinese economy will have overtaken ours. Measured in purchasing power, Asia – and above all China – has over the last few years accounted for one third of the growth of the world economy and a good 60% of the increase in global investment volume – and that with only a share of approximately 5% of the world economy. This clearly shows the scale of Asia's impact.

In his 1941 novel, “World of Yesterday”, Stefan Zweig wistfully described the old Europe that had been consigned to history with World War I and the rise of the USA.

Authors nowadays are already comparing the rise of China and India with this shift in international power. Whatever people may think of such historical parallels, there are few who would deny that the rise of Asia is one of the crucial motors – or perhaps the crucial motor – behind the political and economic changes we are witnessing today.

We have therefore put Asia in the spotlight at this year's Ambassadors Conference. For it is becoming increasingly clear that we cannot afford to ignore the Asian factor in business, nor indeed in the classic foreign policy spheres – be it in Africa or Latin America, Central Asia, or even transatlantic relations.

European societies, economies and social systems will have to adapt to this Asian challenge. Otherwise we will be running the risk that many things that we consider worth preserving, such as individual liberty, social justice and the sustainable management of resources, will belong only to the world of yesterday.

German companies have done very well over the past few years. And the politicians have not remained inactive, either. The reform agenda pursued by the past and present Federal Governments was and remains an attempt to provide the necessary political lead for this process of adaptation. Nobody here in this room could really deny that progress is being made in Germany once again.

Two recent studies based on the responses of foreign managers have given Germany top marks as a business location. Ernst & Young identified Germany as the most attractive location in Europe, above all for high-tech industries. The number of registered direct investments in Germany rose by 57% in 2006 in comparison with the previous year – the biggest increase recorded by any country in Western Europe.

But that is not a reason to be complacent. We have to continue down the path of reform! The biggest fields needing political attention at present are education, research and integration. For these are the key areas if we want to secure long-term prosperity for our country. Just last week, we saw the positive momentum that can be created by successful integration on our trip to California. We in Germany still have a lot to do.

Germany is still a world leader when it comes to quality manufacturing. German industrial plant and machine tools are in high demand everywhere. The newly rising Asian middle classes dream of German cars and German kitchens. But this type of quality production can only be maintained if, in 20 years time, we still have first-class research institutes, highly motivated engineers and highly skilled workers.

Ensuring that we do is our joint task – both abroad, by tapping markets and exploring opportunities for cooperation, and at home, by not letting the creativity of our people go to waste.

There are two ways to meet the Asian challenge. The first is by pulling up the drawbridge. The second is by fearlessly pursuing renewal. I am somewhat concerned that calls for a new protectionism are becoming ever louder. Terms such as “economic war” and “defensive battle” have been used. And people are saying that our policies so far have been naive.

This is in my opinion a dangerous trend. We are an export nation and live from open markets and free exchange. Every fifth job in Germany now depends on external trade. We would be the first to pay the price of isolating ourselves.

In view of this, I think it is necessary to keep a sense of proportion and a cool head when discussing possible measures to protect ourselves from foreign government funds. I remember how we were berated and vilified several years ago for considering protecting German companies, in particular an automobile firm in Lower Saxony, and again about three years ago when a government minister started talking about “locusts”. The same thing happened two years ago when Peer Steinbrück demanded a regulatory system for hedge funds. Today's debate has taken a different turn, and we must now take care not to overcompensate in the other direction. German business needs capital from abroad – and German companies have fared very well with investors from e.g. the Gulf region.

The key question is not where the money comes from, especially since the distinction between public and private sources is not always clear cut in many countries. The key issue is the purpose the investments serve. Is an investment made in order to make a quick profit and siphon off technological know-how – or is it made with the aim of enhancing the long-term profitability of the company? That is the question we should be asking – be it with respect to hedge funds or state-controlled investors.

In order to meet its rapidly swelling demand for raw materials, China is becoming increasingly active in Latin America, the Persian Gulf and Africa. China already draws a third of its oil from Africa – and the percentage is rising. Chinese state enterprises are competing with companies from Europe and the USA – and nowadays also from India – for such raw materials from Angola, Sudan, Gabon and Chad.

Energy demands are becoming a strategic issue for more and more countries. It is in part the rise of Asia that has put security of resources and climate protection firmly on the international agenda.

The “ecological footprint” made by each Indian or Chinese person is at present some ten to twenty times smaller than that left by a European or an American. But this could change quickly. China has already become the second largest consumer of oil after the USA. If the 2.4 billion Indians and Chinese were to use the same per capita amount of oil as the Japanese do today, the demand thus generated would exceed current worldwide demand.

I returned just a few days ago from a trip to Norway, the Arctic and California. The race for oil and gas in the Arctic Ocean, which most people only became aware of after the Russians planted a flag under the North Pole, but which has in fact involved all states in the region for the past years, shows once again why climate and energy issues are becoming central topics of forward-looking foreign policy.

We need to apply the successful principles of such a far-sighted policy in the new spheres I have just outlined. That means recognizing emerging conflicts as early as possible. It means tackling them with foresight. And above all else, it means resolving them together peacefully. Only if we recognize and take up the twofold challenge of energy security and climate protection, will we have the strength to set a political course which fosters global cooperation and sustainable and climate-friendly business.

Here, too, isolation is the wrong path to go down! What is required is a common global awareness of the need for this cooperation. It's an extremely ambitious undertaking, for we ourselves will have to overcome centuries-old cultural divisions and national borders. We need new ways of thinking and new political alliances. The coming decades will be the crucial test of our human intelligence, as well as a test of our ability to solve conflicts not by confrontation, but in a spirit of dialogue, understanding and cooperation.

In this field, too, it would be extremely dangerous if the advocates of a policy of isolation and containment vis-à-vis Asia were to win the upper hand.

I have just come back from America. Whilst there, I called for a new transatlantic agenda with a prominent place for climate protection and technical cooperation in advanced technologies. And I would like us to define joint themes for the future – also with a view to the up and coming great powers in Asia.

In California I advocated the creation of a “coalition of goodwill” to show that people in the United States and Europe are pulling in one direction on climate protection, which is so vital for our future.

In the world of tomorrow, we will not be able to assume that our Western-European culture will be automatically accepted as the universally valid guide for everybody's actions. And rightly so. But at the same time, if we still think that some aspects of our culture and way of life are so good that we want to offer them to our friends and partners around the world, if we want to increase understanding of our culture, we will in the future have to invest much more effort in getting our message across.

This is why cultural relations and education policy will take on a new significance in the future. I am glad that in Peer Steinbrück I have a Cabinet colleague who whole-heartedly supports more funding in this field, because he too realizes that it is also an investment in our own future.

We have in the last two years managed to turn around the funding of the Goethe-Institut. And next year we plan to tackle our network of schools abroad, which have long had to endure spending cuts.

Our 117 German international schools are attended by more than 70,000 pupils, of whom 53,000 hold non-German passports. Many people who work for German companies abroad rely on sending their children to German international schools. And many families in the host countries are proud of their children attending a German school and going on to study in Germany. German schools thus support international mobility, so vitally needed in today's world.

But that is by no means the whole story. Our schools also educate people who are at ease with our language and our culture. Many of the world's decision-makers are alumni of German schools abroad. For example, my Greek counterpart Dora Bakoiannis went to a German school, as did Mexican Foreign Minister Patricia Espinosa, Chilean President Michelle Bachelet and Mexican opera singer Rolando Villazon. Their years at German schools have left them all with a lasting bond with our country. More than 25% of foreign graduates of German schools go on to study in Germany. The graduates of German international schools are the future managers and specialists for German companies abroad and at home.

I would like to upgrade this important instrument of German foreign policy. I am thus fighting for a significant increase to next year's cultural budget. Most of this money should go towards a “schools initiative” in order to expand the presence and work of our schools abroad.

I would greatly appreciate it if German business were also to contribute to this initiative. I would like to thank all the companies that have actively supported the individual German schools for years or even decades, providing direct assistance such as grants and sponsorship. The schools initiative is however intended to surpass all efforts to date. Let us put our heads together and think about new forms of cooperation between German schools abroad and business! The possibilities are wide-reaching. Scholarships could be offered to graduates of German schools, modern IT equipment or physics classrooms could be donated, and work placements could be organized for pupils. Let your imaginations run free!

In initial talks, several major enterprises spontaneously expressed their readiness to do more to help German schools abroad. Let me take this opportunity to thank you most kindly for this support. We hope that others will “learn” from your good example. Before the year is out, I hope to meet a group of potential supporters. And I would be overjoyed if some of you were to be there too.

Thank you for listening. May I now give the floor to my colleague Peer Steinbrück.