Business / CEO roundtable on new normal

Clariant to capture high-value growth chances to meet China's magatrends

( Updated: 2015-03-13 15:39

Editor's note: With the annual sessions of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference ending with a call to adapt to "new normal", sat down with global business leaders to get their views on the reform process and lowering of the growth target.

Here are the excerpts of Jan Kreibaum, Clariant regional president for greater China and South Korea.

Clariant to capture high-value growth chances to meet China's magatrends

Jan Kreibaum

What impressed you the most about the annual Government Work Report released during the ongoing two sessions of China's top legislative and advisory bodies in Beijing? What do you think was the most important issue raised by the government in this report compared with the previous sessions?

As China is moving away from the unprecedented high-growth years, it is very clear that the government has to be committed to transforming China to a more sustainable economy while at the same time realizing that it must balance expectations. The focus is shifting to ensuring that a much broader part of the population can benefit from a better life.

Last year was the starting year of comprehensive and deepening reforms. The 12th Five-Year Plan ends this year. The government is actively working on the relevant reform areas, especially on coordinating stabilization of economic growth, realizing "Made in China 2025" to upgrade the industrial structure and foster emerging industries, as well as focusing on new energy and new materials. This effort is accentuated by the focus on environmental concerns, creating better conditions for citizens in rural areas, increased subsidized housing and other initiatives.

In the Government Work Report, Premier Li Keqiang said that the nation's economic growth rate would be adjusted to 7 percent. Do you think your company should adjust its development strategy in China?

The slowdown of China's economic growth rate is in conformity with the nation's economic development and is actually a pragmatic development. We believe this new adjustment will help to drive China to healthy, sustainable, long-term and stable development.

As a specialty chemicals company, Clariant puts more focus on capturing new and high-value growth opportunities specific to meet China's new megatrends, rather than only concerning the GDP growth rate. We have a strategy to become a true "China Insider", which means that we continuously listen to our customers and deeply understand our market.

We seek to discover current and future unmet needs, and then develop solutions accordingly, especially in supporting China's transformation to a more sustainable economic model.

To meet the needs of our Chinese customers, Clariant continuously invests in localizing and strengthening our production in China with world-class quality. We are convinced that if we continue to develop the right products and services for China, we are on the right track to ensure our own success in China.

Amid the global economic slowdown, especially in developed economies, and China's economic adjustment, what is your greatest concern about your company's operations in China?

It is clear that the "new normal" in China also means that the road ahead can be a bit bumpier. Contemporary China is not the hyper-growth country of 10 or 15 years ago, but the economy is now substantially bigger, with a rapidly growing middle class with real disposable income. At the same time, the Chinese government has started to emphasize the environmental challenges in order to build a more stable, sustainable platform for long-term development.

These new trends provide opportunities for companies such as Clariant that offer innovative solutions to address such concerns. We need to keep this longer-term prospect in mind and avoid short-term decisions; even if there will be more challenges and unpredictability along the way.

Which aspect of China's social and economic reforms should be improved in order to enhance the investment environment to attract more foreign companies?

For an economy to remain healthy and vibrant, it is paramount that fair and predictable market conditions prevail, that a level playing field is firmly established. Certainly, accelerating State-owned enterprise reform is one element to enhance this. At the same time, we expect the government to ensure that regulations concerning the environment and compliance are strictly enforced across all companies whether private-sector enterprises, SOEs or multinational corporations.

We are pleased to note that Prime Minister Li Keqiang stated in his Government Work Report that the government will improve the regulatory system, establish a stable, fair, transparent and predictable business environment and streamline the administration to enable a green path for new projects and investment.

We firmly believe that with these improvements, Clariant will be able to establish deeper roots in China and realize our "China Insider" strategy soon.

Do you think your company will develop faster in China than the previous year in terms of growth rate or market penetration?

Chinese companies — especially privately owned ones — have made tremendous strides in the past few years to achieve higher and more consistent quality with increasingly innovative products. We deeply respect these efforts as they raise the general awareness for sustainability and value in the Chinese market.

This gives us continuous motivation to accelerate and significantly enhance our innovation capabilities in China, and we have clear plans for increased research and development in China over the coming years. We expect that with our vision to become a true "China Insider", we will maintain a healthy and sustainable growth rate in China.

We are here to stay, and we are here to contribute to China's incredible story of transformation

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