Innovation, sustainability driving growth

Editor's Note: The Government Work Report released on March 5 has charted a course for China's economic development for this year. By setting fairly robust growth targets, the country is set to be the locomotive pulling the world economy amid global economic headwinds. A number of pro-growth efforts have been unveiled to spur innovation and continue opening-up. The country has also released the Foreign Investment Law to better protect the rights of foreign businesses in China. China Daily polled senior executives from multinational corporations to understand their positioning, perception and predictions of the Chinese market.

Q1: The year 2019 marks the 70th anniversary of the founding of the People's Republic of China. What in your opinion are China's biggest achievements to date? What are the biggest achievements made by your company so far?

Q2: China's economic growth moderated to 6.6 percent last year as it shifted its focus to high-quality growth. How does your "China strategy" fit into the new trend?

Q3: What are your views on the Foreign Investment Law? How will China's ongoing efforts to further open up the economy and protect the legitimate interests of foreign companies help your business in China?

Q4: China is committed to high-quality manufacturing and the government has stressed the importance of technological innovation. What do Chinese companies need to move up the value chain?

Q5: What are your views on the government's ongoing efforts to cut red tape and enhance work efficiency?

Stephan Kothrade,

president functions of BASF Asia-Pacific and president and chairman of BASF China

A1 China is one of the biggest economic success stories in history as the pace of its development was unimaginable for anyone decades ago. It has successfully lifted millions of people out of poverty through rapid urbanization and is now moving toward a moderately well-off society.

BASF has developed an extensive network in China with more than 25 production sites across the country. BASF-YPC Co Ltd, a 50-50 joint venture between BASF and Sinopec, has become a front-runner in safety production and a sustainable solution provider for its customers. Further collaboration with Sinopec is under way to expand our joint operation in Nanjing and explore market opportunities in battery materials.

A2 China is undergoing a quality revolution in which innovation, upgrade and sustainable development must go side by side.

To be successful in China, we have been investing heavily in local innovation capabilities. We have a strong R&D presence in China, with our largest R&D hub in the Asia-Pacific region located in Shanghai. A new R&D facility was inaugurated in March to house the regional Automotive Application Center and the Process Catalysis R&D Center.

A3 BASF welcomes the law's aim of streamlining existing legislation that governs foreign investment and recognizes its attempt to address some of the biggest challenges faced by foreign businesses in China, such as technology transfers, intellectual property protection and equal opportunities in public procurement. As a multinational company doing business in China, we appreciate more transparent communication of policy adjustments from the government.

A4 I believe innovation has played a vital role in China's economic development from the rise of information technologies to high-speed railways. The chemical industry has been given a new momentum for long-term development in China by the current economic policies under the ongoing supply-side structural reform. That gives companies like BASF a great opportunity. With our global expertise and know-how, we help our customers navigate this "quality revolution" by providing innovative solutions and sharing our best practices in environment, health and safety management.

A5 In the past five years, the Chinese government has been enhancing its services to businesses. As a multinational company doing business in China, we have benefited from simplified approval processes as well as a broadening of market access. Therefore, we are able to build a wholly owned smart Verbund site in Guangdong province. The new fully integrated site will adopt smart manufacturing concepts with the latest technologies to maximize resources and energy efficiency.

Huang Chenhong,

global executive vice-president of Dell Technologies and president of Dell Technologies China

A1 In the 70 years since the founding of the People's Republic of China, the country has achieved great social and economic successes, becoming the second-largest economy in the world. Particularly in the era of reform and opening-up, hundreds of millions of people have been lifted out of poverty to the mid-income level.

Dell Technologies is a witness, participant, contributor, and beneficiary of China's reform and opening-up. Dell entered the Chinese mainland market in 1998, and has grown with the market for 21 years. Today, we have integrated ourselves into the local IT ecosystem, enriching digital lives of consumers and driving digital transformation for many enterprises and industries in China. Dell's business has also enjoyed significant growth in China, as it has become the largest market outside of the United States.

A2 We have witnessed a more intelligent, greener and more inclusive high-quality economic development in China. E-commerce and digital transformation remain the highest growth contributors in the new economy. Dell's "In China, For China" strategy supports China's industrial upgrading and high-quality economic development, with our industry leading end-to-end IT infrastructure solutions. We are well positioned to support sustainable growth and other economic initiatives in this new era.

A3 As a multinational company in China, Dell Technologies has paid close attention and provided constructive suggestions to the draft of the Foreign Investment Law. Our observation is that it promotes foreign investment, outlines foreign investor's legal rights, and creates a level playing field for all investors. I believe the promulgation and implementation of the law demonstrates China's continued progress and commitment to reform and opening-up, and further enhances confidence of foreign investors in the market.

A4 Dell Technologies brings the world's leading digital supply chain management to China to help our partners and suppliers in our ecosystem improve their competitiveness, quality, and sustainability.

Over the years, "Made in China" has made such great strides that China has become the world's factory. To further progress, Chinese manufacturers should consider digital transformation, sustainability and more integration into the international ecosystem.

A5 We are deeply impressed with and appreciative of these efforts. One of these efforts has been the establishment of free trade zones in recent years to provide more convenient services for multinational enterprises. For example, the Chengdu Free Trade Zone and Chengdu Customs launched an innovative "Exit first, declaration afterward" service for Dell Chengdu, significantly saving time and reducing logistics costs.

Lim Yoke Loon,

president of The Dow Chemical Company China

A1 This year also marks the 40th anniversary of Dow's establishment and operation on the Chinese mainland. Dow is privileged to have witnessed the fundamental changes in China in the past 40 years, and appreciates the opportunities brought by economic and societal changes. The largest population on the earth has been lifted out of poverty and seen living standards improve, which is a great achievement that hardworking Chinese people should be proud of. China is a key market in Dow's world map as it is the second-largest one for Dow, with more than 5,000 dedicated employees delivering innovative solutions here. We grow with the China market.

A2 The 6.6 percent GDP growth rate is by no means seen as a moderate one for any other country in the world. It is, to a large extent, the result of voluntary policy adjustments made by Chinese decisionmakers, which emphasize quality growth driven by innovation and sustainability rather than mere speed. This trend fits Dow's business portfolio perfectly with our market focuses on sustainable packaging, durable infrastructure and healthy consumer care products. Growth based on quality instead of scale helps Dow and our partners win the game.

A3 We are closely watching the progress and have been invited by the Shanghai municipal government and the Ministry of Commerce to share our opinions on the draft of the Foreign Investment Law. Dow believes a level playing field enables strong players to grow in a sustainable manner and tap more opportunities in and beyond the China market, for both foreign and Chinese companies. We do value the ongoing efforts that China is making to further open up the market for all players.

A4 A winning strategy for manufacturing in the future is about utilizing digital technology to be more innovative, efficient and agile in relation to customer needs. At Dow we are experimenting with many digital tools available along our business process, such as high throughput machines to develop new formulations, robots to do risky factory maintenance jobs, smartphone apps to improve customer experience and marketing effectiveness. I would encourage Chinese companies to be courageous to try the latest technology and not to be intimidated by the complexity and failures.

A5 When we built Dow's first silicone plant in Zhangjiagang in Jiangsu province 10 years ago, it took several years for all the permits to be issued. Now, it is a matter of a few months. And more importantly, the local government has been authorized to make key decisions and many applications are now processed online, which saves companies time and manpower as well as enhancing transparency and predictability.

Gao Yan,

CEO of thyssenkrupp China

A1 The biggest achievement is the significant improvement in Chinese people's living standards. Lifting hundreds of millions of people out of poverty is a remarkable achievement. As to industry, China has metamorphosed from a barely self-sufficient country into the largest exporter in the world over the past seven decades, especially after the reform and opening-up that started 40 years ago.

We are glad to have contributed to China's development in the past seven decades. From the early 1960s to the 1970s, we delivered heavy diesel locomotives and a complete steel degassing plant to the country. Since the 1980s, we have been systematically participating in the country's development and have become a part of it.

A2 First of all, China's moderated growth rate is a normal phenomenon given its large economic base, and it is only natural for the country to shift its focus to high-quality development. On the other hand, there is still plenty of room for growth in terms of industrial upgrading and urbanization.

China's pursuit of high-quality development creates more business opportunities for quality and innovation-driven companies like thyssenkrupp. It coincides with thyssenkrupp's strategic focus in the Chinese market, which features innovation, urbanization and sustainability.

A3 Recently we have seen a variety of further opening-up measures designed to improve the business environment for foreign investment, such as lowering tariffs, simplifying the approval process for business licenses, and implementing a new negative list for foreign investment.

The new law, which aims to reduce legal complexities and create a more transparent legal environment, could bring about a better business atmosphere in which further protection and promotion of foreign enterprises are guaranteed.

A4 To secure a better place in the value chain, some Chinese companies could change their mind set and focus more on long-term sustainability rather than short-term gains. That means being a real differentiator by investing more in developing advanced technologies and new business models. To make sure the differentiation tactic delivers, investment in innovation and capability building, notably engineering competence and employees' skills, should follow.

A5 We are happy to see the Chinese government's initiatives on streamlining government approval and administration processes, which have helped enterprises focus more on their businesses. We look forward to seeing continued efforts from China's government to build a more reliable, transparent and rules-based business environment and law enforcement that attracts foreign companies to further invest in China.

Anne Vedel,

co-president and chief technology officer of Vestas China

A1 Over the past 70 years, China has become one of the fastest-growing and most important markets in the renewable energy world. As a world-leading player in the renewable industry, Vestas has pioneered wind energy for 40 years with more than 100 gigawatts of installed capacity in about 80 countries across six continents.

To face the challenges from energy transformation, we are committed to strengthening our wind energy products, services and solutions, building on our industry-leading big data in China to introduce new digital solutions, and leveraging our unique global reach, scope and size to introduce global expertise to the China market on solution optimization, distributed wind applications, as well as service portfolios.

A2 As a wind industry pioneer, Vestas is continuously strengthening our cutting-edge products and quality in everything we do, we are ready for changes in the market.

In China, we are committed to leveraging our global solution expertise and resources to help the Chinese market face the challenges from energy transformation, accelerating our efforts to reduce costs and localize our product portfolios.

A3 The Foreign Investment Law will further open up the economy and protect the legitimate interests of foreign companies. It will provide a fair and transparent market environment for players abroad, which will drive and attract more investment from foreign companies to China.

As a world-leading company in renewable industry, Vestas has the great honor to participate in the dynamic and ongoing energy development in China. We are committed to leveraging our technology and service leadership achieved through years of continuous improvement to meet evolving demands. Vestas is willing to take an active part in shaping the future of China's energy market.

A4 Over the past 40 years, Vestas has always been an active player in the China energy market. In 1986, Vestas installed China's first wind turbines in Shandong province. In 2005, Vestas began to build its largest integrated manufacturing complex in the world in Tianjin. Meanwhile, Vestas built up its own local supply chain in China at a world-class level.

Vestas has signed several supply agreements with the world's leading blade manufacturer to build new production lines in China supplying Asia and the global market.

A5 We are glad to see the ongoing government efforts to improve working efficiency, which provide us with a transparent, fair and efficient platform in China. The Chinese market is one of Vestas' key strategic focuses. With positive support from the local government, we are engaged more than ever in innovating our technologies and optimizing our solutions to meet customers' operational and maintenance strategies.

Leon Wang,

executive vice-president of AstraZeneca International and president of AstraZeneca China

A1 Fast and stable economic development has been one of China's biggest achievements in the past decades.

China's opening-up has offered AstraZeneca the chance to build long-term partnerships with academic, scientific and business communities in China to make more quality medicines and holistic disease management solutions available to patients. In 2017, we founded the Dizal joint-venture to promote the core competence of new drug development in China.

A2 We are confident that China's economic growth rate will continue and be sustainable, as China is now focusing on the quality and sustainability of growth, rather than merely quantity. Fast developing technologies such as digital internet marketing pose growing challenges to the healthcare industry. We see challenges as opportunities. Astra-Zeneca China is leading the way in evolving from a simple drug supplier into an innovative medical enterprise that provides patients with comprehensive disease management solutions.

A3 The Foreign Investment Law will provide a more solid guarantee for the legitimate rights of foreign companies on a legal level, creating a more open, fair and transparent investment environment in China. We believe that an optimized market as well as a positive and dynamic investment climate will maximize the initiative of innovation, attract and converge overseas resources, and further promote the cooperation of foreign and domestic companies, realizing mutual development.

A4 China's macroeconomic growth has enabled Chinese companies to make significant progress in many aspects including public health. We see many opportunities for further collaboration with our partners in China to solve the most challenging problems in the healthcare industry.

Among the most inspiring developments in digital health are new technologies that embrace the potential behind the internet of things and artificial intelligence, which is set to be one of the most significant advances in science in China and the United Kingdom.

A5 The Chinese government has placed high importance on transforming government functions by streamlining administration, delegating power, enhancing oversight and providing better services. The pace of reform to cut red tape in China has been fast during the past five years. In healthcare, accelerating the approval process of new medicines is essential. We witnessed and supported the streamlining of administration. A good recent example is Tagrisso, an innovation discovered and developed in the UK that received approval in China in record time.

(China Daily 03/20/2019 page9)