Three weeks ago, a seven-metre-long bronze Chinese dragon appeared afloat on Alster Lake in downtown Hamburg. Surrounded by the characteristic green copper rooftops of the Hanseatic harbour city, the mythical animal was facing the direction of the Neo-Renaissance City Hall. Its unlikely appearance marked the start of more than 200 arts, cultural and business events in the northern German city, in a festival celebrating all things Chinese and emphasising the strengthening of ties that the city has forged with the mainland in recent years. Starting with an event heralded as Hamburg Summit - China Meets Europe, which boasted the presence of Premier Wen Jiabao, Singapore's Minister Mentor Lee Kuan Yew and former German chancellor Helmut Kohl, the three weeks brought together business and arts leaders from China and Europe in a city that's increasingly priding itself on the growing influence of China. As the event closed yesterday, Germany's second-largest city was reflecting on the prominent role being played by its 10,000 Chinese, a community of mainly mainlanders that eclipses the number of Chinese in either the capital, Berlin, or the financial centre, Frankfurt. 'Every year, we have 40 to 60 new Chinese companies setting up office here,' said Aresa Brand, project manager at Hamburg Business Development Corporation, the city government's investment promotion agency. 'This is far more than in any other federal state in Germany.' With more than 400 mainland companies registered in the city today, Hamburg is far ahead of its European rivals. There are only 200 Chinese companies in London, more than half of them from Hong Kong, and about 180 in Frankfurt. The port city has the advantage of a long history with the Far East. The first vessel from the Middle Kingdom came rolling into its port in 1731. Hamburg's trading houses such as Siemsen and Jebsen were among the first European businesses to get involved in the lucrative 'China Trade' of the 18th century, eventually setting up offices in Hong Kong. By the early 1930s, a small China-town had emerged in St Pauli, Hamburg's notoriously rowdy red-light district. The Chinese, mostly former sailors, ran small businesses such as restaurants, grocery shops and laundries. They clashed from time to time with the German natives, especially during the Depression years as the economic slump intensified the tense mood. When the Nazis came to power in 1933, things turned nasty. Step by step, Adolf Hitler's government clamped down on the community - at first with the partial approval of Generalissimo Chiang Kai-shek. When Chiang increasingly drifted to the right and relations between the two governments were good, the Nazis were happy to comply with his requests and deport politically active Hamburg Chinese with leftist leanings back to China. The situation worsened when Germany sided with Japan in the second world war and broke off relations with China in 1941. Most Hamburg Chinese fled to England, but an unspecified number died in Nazi concentration camps. After the war ended, new Chinese immigrants started to trickle in. When Li Aining, now professor at Hamburg University of Applied Sciences, arrived in Germany two decades ago, she observed that there wasn't much going on in the Chinese community. 'Most Chinese ran restaurant businesses or worked as employees of state-owned companies,' she recalled. 'At that time, China was only one among many developing countries. You could barely see and hear about China in the German press, be it radio, television or newspapers. The Chinese were also not treated so respectfully.' But the rise of China as an economic powerhouse has changed all that. Like many European countries, Germany at times appears dazzled by China's boom. Hamburg's attempts to establish itself as the prime destination go back to the early years of China's post-Mao Zedong rise. Founded 21 years ago, the Hamburg Business Development Corporation focused strongly on China during the early years of its wirtschaftswunder (economic miracle). 'China was one of our key markets right from the beginning,' Ms Brand said. The corporation offers assistance to new foreign companies, from tax and law consultations, to visa-related assistance and office rental subsidies. But it's clear the agency is putting more focus and efforts on Chinese companies. A detailed business guide is available in Chinese and Chinese-speaking government staff readily lend a hand. While the corporation also has offices in Hong Kong, Guangzhou, and Shanghai, the city doesn't intend to miss out on the potential of the Chinese hinterland, either. 'We're going to increase investment promotion activities in northwest and southwest China,' said Stefan Matz, head of the corporation's overseas department. 'Our long-term goals are to develop that potential, as well as increase promotion among the established large companies in coastal regions such as Zhejiang and Guangdong .' Among the mainland companies established in Hamburg are China Shipping Holding, Baosteel and Chinatex. The biggest mainland player in the city, however, is the shipping agency Chinese Ocean Shipping (Group) Company, better known as Cosco. The Beijing-based shipping giant established its European headquarters in Hamburg in 1989. 'We chose Hamburg as our base because it's an important seaport city,' said Yang Lei, general manager of Cosco Europe. 'Moreover, Germany is Europe's largest market, and Hamburg is well connected with the rest of the continent.' Many companies are likely to agree with Mr Yang's assessment. Hamburg's harbour, the second busiest container port in Europe after Rotterdam, is Europe's most important for China and its Chinese trade ties are stronger than that of any other European ports. Hamburg-China sea-trade volume increased 29 per cent last year, and accounts for more than a quarter of the port's container traffic. Hamburg is now considering plans to create a Chinese metropolis within the city. A cluster of Chinese companies, clubs, business associations and restaurants is going to be established in Hafen City, a new downtown district in the making. The standing of this ambitious urban project received a boost when leading mainland firms such as China Shipping Holding moved into HafenCity last year, investing Euro15 million (HK$148 million) on its new office. Yu Zenggang, who heads the European headquarters of China Shipping, is delighted by his company's new location. 'When I sit in the new office, looking out on the water and the ships go by, it all seems great and vast,' says the 42-year-old businessman from Shanghai.