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Business leaders embrace China’s growing global role

By   /   March 15, 2017  /   No Comments

Updated: Mar 15,2017 7:10 AM     China Daily

With the two sessions drawing to a close for another year, China Daily has canvassed the views of business leaders from a range of industries and sectors on China’s economic outlook and the country’s future as an increasing number of companies look to the Belt and Road Initiative to drive world growth. Their answers are given below.

1. What do you think of China’s economic growth target of about 6.5 percent this year, amid the sluggish global recovery? What business opportunities do you see coming from sectors that will be opened to wider foreign investment, such as services, manufacturing and mining?

2. How do you assess the role of the Chinese market in your global business strategy and layout? What are your views on China’s efforts and extended preferential policies to further attract foreign investment? Do you plan to increase investment or expand your presence in the Chinese market this year?

3. What business opportunities do you expect to see as China promotes the Belt and Road Initiative? Have you participated in, or do you plan to participate in any projects linked with the initiative? How do you think infrastructure investment can contribute to global growth?

4. This year, China will continue to implement supply-side reform. What does the reform mean for your business, and how will you adjust your business strategy in China to deal with it?

5. What is your opinion of China’s efforts to upgrade its manufacturing capabilities and promote innovation? Will China’s innovation-driven campaign spur the vitality and competitiveness of the economy?

Andrew Guthrie, president of Syngenta China

A1 We believe 6.5 percent is a prudent growth target. It shows that the government has a long-term strategy to further improve domestic demand-driven growth while continuing to be a major global exporter. The government has clearly laid out its plans for further economic reform, and these plans will help to ensure that China will make consistent progress and have a stable platform for long-term economic growth.

Last year, China’s GDP growth was 6.7 percent, outpacing most other economies. China contributed about 30 percent of the world’s economic growth last year, which was an outstanding achievement.

A2 China is one of Syngenta’s most important markets. So far, we have invested more than $360 million in our business here, and have nearly 2,000 employees. We have established a world-class research and innovation center in China and we have a number of very important global manufacturing facilities located in the country.

China is a great opportunity for Syngenta, and we have been committed to the Chinese market for many years. When it occurs, I expect the successful completion of the ChemChina transaction (China National Chemical Corp has offered $43 billion to acquire Syngenta) will help to create new opportunities for growth in China and around the world.

A3 We joined the World Day to Combat Desertification Global Observance and the Belt and Road Initiative Joint Action High-Level Dialogue in Beijing last year. The event aimed to demonstrate how land degradation neutrality can be a critical element in achieving a number of sustainable development goals, especially the promotion of inclusive and sustainable economic growth.

The initiative provides further potential for Syngenta to extend partnerships with our strong global presence.

A4 Supply-side reform in the agricultural sector is a key element of the 2017 Central No 1 Document (a blueprint for agricultural sector reform). It is the 14th consecutive year that the No 1 document has focused on agriculture.

The aim of supply-side reform is to achieve higher efficiency and better production quality, as well as helping farmers to earn stable, higher incomes. This requires innovation and technology, which is also highlighted in the No 1 document. This is where we, as a world-leading agricultural technology company, can contribute.

Syngenta shares the government’s commitment to ensuring the safety and well-being of the Chinese people through supporting the safe and responsible production of food.

A5 I believe the government’s approach to promote higher standards in manufacturing is appropriate and necessary.

We lead the industry in our commitment to R & D. We believe innovation is the key to addressing the global challenge of ensuring food security and, here in China, to help speed up the transition to a modern and sustainable agricultural sector.

It is worth repeating what Premier Li Keqiang said in the Work Report: “Having reached the current stage of development, China can now advance only through reform and innovation.”

Stephane Rinderknech CEO of L’Oreal China

A1 We are happy to see the Chinese economy continue steady growth by shifting the focus from speed to quality, efficiency and sustainability. The future of the Chinese economy looks bright because the supply-side structural reform has gained momentum with preliminary success, while industrial transformation and economic upgrading have been deepened.

China is accelerating the urbanization process by creating 11 million new urban jobs this year, which will bring opportunities for us.

The further opening-up of the market will be conducive to stronger growth momentum in the beauty industry.

A2 We not only accompany, witness and contribute to China’s development, but also benefit from it — for example, the recent government reforms, such as lower import duties and the reduction in consumption tax. L’Oreal is always among the first to welcome and react positively to policies with concrete action. We believe that they will boost the local market and benefit Chinese consumers.

We maintain continuous investment in China — we have headquarters, a research and innovation center, three plants, five distribution centers and an academy — and our confidence in the country.

A3 The Belt and Road Initiative is accelerating the process of economic globalization and allows global enterprises like L’Oreal to further expand their global footprint. New population clusters bring new growth points for the market. We are more than willing to participate in potential initiatives and to sustain our high brand value and good reputation by bringing products to more consumers.

The initiative doesn’t solely aim to bridge the geographic connections between China and other markets, but also to create innovations from China. L’Oreal shares a similar vision in research and innovation — invent in China, for China, and inspire the world. We hope the superior innovations we pioneer with China will create new value, not only for Chinese consumers, but for the world.

A4 We are happy to see China’s supply-side reform continue to gain momentum, producing evolving needs and trends from a growing spectrum of consumers of beauty products. In China, there are 500 million potential consumers, 200-plus rising cities and the world’s No 1 middle class population. With this huge potential, we are expecting a bright future.

A5 China’s determination to boost innovation has not only increased competitiveness in the country, but also motivated individual enterprises. In China, we interpret our vision “Invent in China, for China, Inspire the World” as applying our superior innovations from China to the rest of the world. Thanks to the efforts China has made to boost innovation, the country is leading the global digital revolution.

We have started to incubate and scale the next generation of startups in the area of connected beauty, and have cooperated with BAT (Baidu, Alibaba and Tencent) to serve the aspirations of consumers worldwide with innovations that originated in China.

Gillian Tans CEO of Booking.com

A1 China is undergoing structural reform to pursue quality and sustainable growth. Even with moderate economic growth, China contributed more than 30 percent of global growth last year. This year, China has set a growth target of about 6.5 percent amid global economic uncertainty, which should continue to stabilize the world economy and give confidence to the markets. Chinese consumer spending continues to rise, with a growing desire for diverse and quality technology-driven travel services.

A2 China has long been an important international market for Booking.com, and it is playing a key role in our global business strategy for continued growth. Since entering China in 2010, we have experienced fast growth by bridging Chinese consumers and accommodations with the world. Last year, China’s outbound market posted strong growth, with more than 120 million Chinese traveling overseas. We are optimistic about recent efforts to open-up and ease the tax burden on multinationals to create a fair and favourable trading environment. This allows companies to continue to invest with confidence in technology, people and service upgrades.

A3 The Belt and Road Initiative is driving regional connectivity at an unprecedented scale through infrastructure development. Intraregional travel will grow and cross-Asia travel will be more attractive to global tourists as transportation barriers are taken down. As an online travel platform connecting people with their ideal places to stay, we are well-positioned to capture this round of travel trend and help build a strong regional travel market. With more than 1.1 million diverse accommodations resources, Booking.com is continually looking to make accommodations more accessible throughout Asia. Our 24/7 service in 43 languages will also make communication easier for travelers in the region.

A4 Supply-side reform is driving a profound change by urging all businesses and companies to improve competitiveness and develop in line with the market and consumer demand. Our philosophy is to focus on innovations to meet and exceed consumers’ needs for high-quality products and services. This defines our market strategy in line with China’s developing needs, driven by the reforms. Behind every product and service we offer in the China market, we innovate, experiment and improve to capture the mobilized tendency.

A5 China’s innovation drive is turning consumers into supporters of innovation. Indulged by customized new products and services, Chinese consumers are now seeking and valuing innovative ideas and the companies behind them, presenting great opportunities for technology companies. We’re excited to see the Chinese consumer market becoming one in which innovation and pioneering new technologies can drive business success. Our continuous efforts to innovate and customize products are a response to the demand for innovation, and they have contributed to our business success in China.

Micky Pant CEO of Yum China

A1 We believe the opportunity for growth in China is unrivaled, especially for our business, where we see the emergence of new trade zones and new consumer energy. China remains one of the fastest-growing economies in the world. A new generation of younger consumers, who are digitally sophisticated and brand driven, is fueling growth in consumption in China. The ongoing growth of the middle class and urban population in China is expected to create the world’s largest market for restaurant brands, with Yum China poised to be the market leader.

A2 I have not been in China for very long, but I greatly appreciate the central government’s efforts to simplify the administrative procedures, reduce taxation and generally improve the environment for doing business. I met with Vice-Premier Wang Yang in early March and we shared our views on the growth opportunities that exist for international companies in China. The Chinese leaders’ openness and eagerness for economic reform has encouraged me very much. We are fully committed to China and confident in our future here. China is our focus, and we are increasing our investment in new stores, innovative menu offerings, digital engagement and delivery to further grow our brands across the country.

A4 Just before the two sessions, I met with Vice-Premier Wang Yang and discussed China’s business environment. I was impressed when he told me that China previously focused on attracting capital when introducing foreign investment, but now the government places more value on advanced management systems and quality control. He said he hopes Yum China can continue to share best practices to lead the industry’s development in China.

Supply-side reform has the potential to revitalize regions that have been dependent on traditional industry and spur economic growth, both of which are positive for the restaurant sector. We already have restaurants in more than 1,100 cities. We will continue to expand and provide more employment opportunities in China’s developing cities and regions.

A5 The rate of innovation in China is astounding, and in many areas — such as digital engagement and mobile commerce — technology solutions are leapfrogging those in more-mature markets. As our customers are becoming more tech-savvy, we are investing significant resources in digital delivery and customer experience to stay at the forefront of the innovation curve in the restaurant industry.

Elaine Chang, vice-president of Amazon and president of Amazon China

A1 We remain optimistic about China’s economic prospects this year, and believe cross-border e-commerce will play an increasingly important role in the country’s economic growth. The “importation” of international brands and products through cross-border, online shopping platforms greatly supports the Chinese government’s supply-side reform, which is injecting new power and energy into the national economy. Meanwhile, Chinese manufacturers are trying to grow their businesses and build their brands globally through cross-border e-commerce platforms. All these are great opportunities, and we need to focus on customers’ demands and drive local innovations to provide better support.

A2 China is one of our strategic markets and we are committed to growing our business here. We have invested to build a comprehensive presence in China, including cross-border e-commerce, Amazon reading, Amazon Logistics+ and Amazon Web Services. We will continue to innovate in response to the demands of local customers, sellers, developers and enterprises.

A3 The Belt and Road Initiative has injected new energy into cross-border e-commerce. Guided by the initiative, an increasing number of quality Chinese enterprises are expanding their overseas businesses. Through Amazon Global Selling, tens of thousands of China-based sellers now can sell on overseas Amazon marketplaces in nine countries. In addition, Amazon’s global logistics network across 185 countries and regions has helped to establish an effective “Online Silk Road” for Chinese enterprises “going out”.

A4 Last year, we launched several innovations tailored for Chinese customers, including Amazon Prime China, and expanded selection from Amazon UK to Amazon Global Store to better meet consumers’ demands for cross-border online shopping.

A5 China is encouraging innovation and the digital economy to spur economic growth and drive industrial upgrades and transformation. China doesn’t lack the innovative spirit, and the examples from Chinese enterprises in Amazon Global Selling and Launchpad serve as strong evidence of that. Our mission in China is to innovate on behalf of customers’ needs. For example, we launched Amazon Global Store and Amazon Prime China, which provides unlimited, free cross-border delivery. We hope our innovative spirit and how we innovate will help to elevate China’s innovative environment.

Alain Crozier, corporate vice-president, chairman and CEO of the Greater China Region for Microsoft

A1 First, it is worth noting that 6.5 percent is still quite a high economic growth rate when compared with the 3 percent global average. It should enable China to maintain its position as the second-largest economy, while becoming the largest trading nation in terms of goods and outbound investments.

The reforms and investment opportunities have the potential to transform the long-term health of China’s economy, as they will boost capacity, quality, competitiveness, and innovation — especially in intelligent manufacturing.

A2 China has one of the world’s clearest technology-led development agendas. Initiatives such as Internet Plus and Made in China 2025 encourage industries and companies to achieve digital transformation by leveraging advanced technologies, such as big data, the internet of things and cloud computing. Microsoft is uniquely positioned to empower organizations in China to transform. We have confidence in our ability to develop and innovate together with our partners and Chinese enterprises, creating new competitive strengths for the economy in the process.

A3 The Belt and Road initiative will expand cooperation and connectivity among countries to boost China’s economy and enhance competitiveness and security. It also aims to establish a more open economic environment for foreign companies.

IT is an essential part of the global infrastructure; not just as independent networks playing specific roles, but as an interconnected infrastructure that brings together new growth points.

A4 The supply-side reform will transform the long-term health of China’s economy because it will address the issues of capacity, quality, competitiveness, and innovation — four key factors for enabling economic growth and ensuring sustainable development. Reform will depend heavily on technology and innovation.

We will continue to provide customized solutions through advanced technologies and an ecosystem of Chinese partners.

A5 We were excited to see the government take innovation as a core priority and key growth driver. This will encourage more communication about internet-based innovation between China and the world. Digital upgrades in manufacturing will advance the transformation of these industries so they deliver quantity and quality. We will bring our experience, expertise, partner network and technologies to enable the transformation of China’s manufacturing sector.

Franz Jung CEO and president of Porsche China

A1 We have no comment about the government’s growth target, but considering the slow pace of recovery and the uncertainty in global business, this seems a reasonable target. It shows the potential for Porsche to grow our business in a consistent, sustainable and healthy macroeconomic environment.

A2 China plays a strong role in our global business strategy. Last year, we delivered 65,246 units and China once again became our single-biggest market. There is still potential for us to grow here. We want to develop new and existing business models — such as financial services, the used car business, our parts business and after-sales formats. We have 96 Porsche Centers here, and an estimated 12 new centers will be opened next year, most of them in third- or fourth-tier cities. We will continue our investment in this strategic market by bringing new and innovative retail formats and customer-experience centers, and by further professionalizing our network.

A3 China’s Belt and Road Initiative will significantly impact global economic development. This will offer a lot of opportunities, hopefully, a reduction in transportation costs. China can expect much more business. With increased economic growth and consumers with more purchasing power, we believe we will have more customers. We will benefit from the infrastructure — it is important to ensure easy connectivity and promote global growth.

A4 China’s supply-side reform aims to balance supply and demand by encouraging innovation and new technology, and by improving quality and cost efficiency.

We constantly strive to improve our products to keep up with our customers’ evolving tastes. We embrace sustainability and innovation with new technologies. Our business strategy thrives on new technology and innovation. We will continue to focus on that.

A5 China has emerged as a manufacturing powerhouse. It has seen tremendous growth, and along with that growth there is rising consumer sophistication. Having discerning and refined tastes, consumers’ preferences are shifting to the new, the innovative. China is heading in the right direction by aiming for manufacturing excellence, which comes with innovation and new technologies. I believe efforts to upgrade manufacturing capabilities and the innovation-driven campaign will provide the necessary stimulus for economic growth and promote healthy competition.

Bob Buttermore, managing director, Rockwell Automation Greater China

A1 We have already seen an increasing number of projects and signs of a real economic rebound since the start of the year, which is better than the same period last year. We hope this trend will continue so China can meet its annual GDP target. This period of low economic growth has also seen a more active service sector and stock market.

A2 We are committed to helping Chinese manufacturers improve productivity and global sustainability. As the world’s largest manufacturer, China is a strategically important market for Rockwell Automation.

We feel bullish about the development prospects of the China market. Driven by the Made in China 2025 program and supported by the Chinese government, Chinese manufacturers are committed to implementing intelligent manufacturing, which will provide us with a great opportunity for cooperation.

A3 The Belt and Road Initiative has brought great opportunities for business development to China and related countries.

We are participating in this initiative through our cooperation with numerous companies.

Leveraging our global technological strengths and service capability, Rockwell Automation is able to help companies shorten the time of overseas construction and act in accordance with local policies and regulations, which will help to promote Belt and Road Initiative projects.

A4 The supply-side reform requires enterprises to boost their ability to innovate.

While this will serve to stimulate demand, it will also require companies to respond better to market demand for production.

Rockwell Connected Enterprise solutions can help manufacturers achieve better innovation through informatization and intelligent technology, and connect with the supply and demand chains to respond more quickly to market changes.

A5 China has reached a turning point because the advantages offered by a low-cost labor force have gradually diminished.

Maintaining the competitiveness of China’s manufacturing industry will require a new focus on innovation and intelligent manufacturing transformation. This is also the main reason why China proposed the Made in China 2025 initiative two years ago.

Yan Xuan president of Nielsen Greater China

A1 Though China’s GDP growth has been decelerating, the basic growth driver remains powerful; consumer confidence is high, employment is healthy, income growth and the emergence of the middle class are on track and consumption keeps rising as people pursue better lives.

Consumers are opening their wallets for things that fit their style — they are going for consumption upgrades, they want to be entertained, they have to be connected with their friends, family and colleagues 24/7. Companies riding these trends will benefit and be richly rewarded.

A2 China will always be the centerpiece of Nielsen’s global growth strategy. In the first two decades of Nielsen’s presence here, we enabled investments by multinational companies in the retail and consumption sector. Twenty years later, more Chinese companies are relying on Nielsen’s insights and information for their growth and expansion.

A3 The Belt and Road Initiative will accelerate the global expansion of Chinese companies, providing a wider footprint and bigger success. It won’t just be an abundance of consumer goods manufactured in China that will flow more easily to other markets and benefit more global consumers, the infrastructure required to transport these goods will be funded and built, creating a new growth engine for the world.

A4 The supply-side structural reform is hugely meaningful to the Chinese consumer goods industry and consumers. Suppliers need to shift their focus from quantity to quality, and from meeting basic consumer needs to satisfying the desire and demand for the better things in life. The Made in China strategy has served the country’s initial growth and development well. The Innovated and Made in China programs will ensure the country will continue to leapfrog the rest of the world.

A5 Industrial Manufacturing 4.0 is the natural next phase of China’s manufacturing economy, because the country has successfully built many basic capabilities. China’s auto industry, the world’s biggest, stands ready to meet the needs of billions of people domestically and overseas. Chinese automakers are making enormous strides in electric vehicles, hybrids and connected mobility, leveraging global and Chinese innovations. Huawei and OPPO phones are winning consumer’s hearts not just because of their slick designs and precision craftsmanship, but also owing to their innovation and their own intellectual property rights.

Anne Marion-Bouchacourt, chairman of Societe Generale (China) Ltd

A1 In the Government Work Report, the growth target was softened to “about 6.5” percent for this year, from 6.5 to 7 percent for last year. This is in line with our estimate for this year because it will allow the government to “achieve improvement while maintaining stability”. This is ambitious because there is a need to restructure sectors with overcapacity, such as steel, coal and cement, which will cut jobs. This needs to be balanced by job creation in the manufacturing and the service sectors, and it puts pressure to deliver on plans such as Made in China 2025, where the country wants to raise up the value chain.

A2 We are positioned as a bridge for Chinese corporates and financial institutions to venture abroad and for multinational companies to invest in China. With our strong credentials in the debt capital markets, mergers and acquisitions, project finance in energy and the natural resources sectors, risk management for commodities, interest rates and foreign exchange, trade finance, investment solutions, and our presence in Africa, Russia and Eastern and Western Europe, we are playing a key role in supporting Chinese corporates and financial institutions in their overseas ventures.

A3 In the short term, the Belt and Road Initiative will bring a lot of opportunities around infrastructure — railways, highways, pipeline, projects for energy and natural resources, and the construction of industrial zones. Societe Generale, with its presence in 65 economies, of which 32 are on the routes of the Belt and Road Initiative as a unique advantage, can serve Chinese corporates when they want to set an operation, finance an infrastructure project or hedge risks.

A4 The supply-side reform means the government is determined to upgrade its industries so more of them make profits. We expect it to create international champions, which will look for international expansion via M&A, spin-offs and reverse acquisitions, especially in areas such as construction engineering, telecommunications and nuclear and renewable power. For us, it will mean continuous opportunities to support them in overseas ventures, using our understanding of different geographies, and bringing the best financing and hedging solutions to make their projects successful.

A5 China’s efforts to upgrade its manufacturing capacities and boost innovation is clearly outlined in its ambitious Made in China 2025 program.

We expect key players to climb up the value chain, but also further push the limits, thanks to their research and development investment.

We expect a lot of innovation from China in areas such as the internet of things, artificial intelligence and smart manufacturing. We think China’s size and its ability to test new concepts will allow it to produce devices quickly and at reasonable prices that contain all the new technologies that can be used in many fields, such as medical, manufacturing with smart robots and autonomous vehicles.

Liu Jie, vice-president of Carestream Health Inc and president of Carestream’s Greater China Cluster

A1 It is a practical target for the Chinese government to set GDP growth at about 6.5 percent, lower than last year’s 6.7 percent. Despite that, the economy is still maintaining medium-to-high growth.

This tremendous development potential will continue to provide momentum for the global economy.

With the acceleration of its opening-up policy, China is becoming increasingly integrated with the world economy.

Enterprises need to grasp new opportunities, resist pressures from various forces and inspire a new impetus to promote innovation and development.

A2 In recent years, we have seen constantly improved efforts in China’s opening-up and the improvement of the country’s investment environment.

China is our largest market, and to better serve it, we will make a greater commitment in areas such as research and development, production and sales and services.

A3 The Belt and Road Initiative is a medium- and long-term strategy that will further increase China’s global influence.

Hopefully, during the next few years, this strategy will produce great policy dividends, including investment opportunities in infrastructure construction, services and multiple industry chains.

Homegrown and multinational corporations need to expand overseas and conduct exchanges and cooperation to better complement each other’s advantages.

We expect multinationals — which hold inherent advantages in technology, standards and services — to actively take part in the initiative and drive economic development.

A4 The implementation of supply-side structural reform is an opportunity, but also a great challenge for businesses.

It spells a rare opportunity for Carestream Health to pursue technological progress, adapt to the survival of the fittest and a better competitive environment, and satisfy new demand.

Meanwhile, when seeking development, we need to think outside of the box, focus on customer demand and develop industry-leading products and services to provide more humanized and innovative solutions.

A5 China needs to make efforts to make the manufacturing sector “intelligent”. Mechanisms must be established to encourage small businesses to innovate and large enterprises to improve and industrialize.

The Made in China 2025 strategy will accelerate the application of big data, cloud computing and the internet of things, and drive changes in production, management and marketing patterns in traditional industries with new technologies, new business formats and new models.

China’s intelligent manufacturing will bring about a comprehensive improvement and more world-famous Chinese brands, ushering in an era of quality for economic development.

Sara Dai, regional president for Asia Pacific, Novozymes

A1 China’s economic growth, though coming at a slower rate, is still one of the fastest in the world, and given the size of China’s economy, growth remains impressive. What’s more important, behind the growth is a focus on quality, sustainability and innovation, where biosolutions can play an important role. As the world’s largest provider of enzyme and microbial technologies, we are pleased to see biotechnology innovation being encouraged by the Chinese government in the 13th Five-Year Plan (2016-20) for use in a wide range of industries.

A2 China is a critically important emerging market for Novozymes. The company has been operating in the country for more than 20 years and China has become an important growth engine for Novozymes globally. Our research and development center, established in Beijing in the 1990s, has grown to be an integral part of our global R & D network.

We are happy to see the government’s efforts to attract foreign investment, especially the recently published Guidelines on Further Opening-Up and Attracting Foreign Investment. We hope to see further enforcement of those policies. At Novozymes, we’ll be more focused on developing regional innovations with our leading biotechnology to meet the needs of local customers.

A3 Novozymes supports openness, inclusiveness and collaboration as part of the basic essence highlighted by the Belt and Road Initiative. At Novozymes, we take “Partnering for Impact” as our corporate strategy. As a member of the B20 Infrastructure Group, Novozymes is pleased to see many governments and enterprises reaffirming their commitments to implementing the (UN) Sustainable Development Goals, which offer a range of opportunities for our business to grow and develop, especially where there is a focus on the use of natural resources and efficiency and a drive for more environmentally friendly solutions.

A4 We see more business opportunities as China drives supply-side reform and places more emphasis on sustainable growth, as our bioinnovation solutions enable higher agricultural yields, low-temperature washing, energy-efficient production and renewable fuel. We are committed to working closely with local companies and universities to develop technologies that reduce CO2 emissions and the use of harsh chemicals, and improve industrial efficiency.

A5 We commend the Chinese government’s efforts to spur and protect innovation. For industry leaders such as us, innovation is at the core of our product strategy that can unlock the market potential with added value to our customers, and that will ultimately serve the best interests of the consumers and the community at large. To spur the vitality and competitiveness of the economy, the innovation-driven campaign is expected to be inclusive and provide a level playing field for both foreign and Chinese companies operating in the country.

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