Executives confident about China business

Editor's Note: The Chinese economy has managed to withstand a slew of challenges in the past year, and policy priority in 2022 will focus on maintaining stable growth as identified by top policymakers at the annual tone-setting Central Economic Work Conference in December. China Daily talked to multinational executives on how they view the prospects for the Chinese economy and how they will align their business strategies with China's efforts to deepen reforms and push for high-quality development.

Q1: The year 2021 has seen the global economy withstand a variety of challenges in the form of COVID woes, trade disruptions, energy shortages, a roller coaster in commodities, high shipping costs and geopolitical tensions. Against such a background, what is your assessment of China's economic growth prospects in 2022 and beyond?

Q2: Within the macro context discussed earlier, how do you see your company's performance in China and future prospects relative to your global operations?

Q3: How do you view recent key meetings in China that have reinforced the country's sustained commitment to reform, opening-up, equal treatment for foreign businesses, and more measures to attract MNCs and foreign investors? What else should China do in this direction, especially in terms of surmounting potential barriers?

Q4: What is your view on China's net zero efforts (carbon goals), especially from the standpoint of potential new business opportunities they may spawn?

Q5: The question-"Is China still investable?"－has popped up in popular media discourse after the recent big-ticket regulatory changes (like antitrust/anti-monopoly measures and steps to preempt a possible debt bubble in property). How would you answer that question? Does China remain attractive for your business?

Alexander Dony, president for China, BSH Home Appliances

A1 We feel that China has a positive outlook for the year 2022 that should create opportunities for domestic and foreign enterprises alike. Its growth prospects are supported by its complete industrial chain, rich human resources, convenient infrastructure and a huge domestic market. The fact that China is willing to further open up means that foreign companies will have more areas where they can compete and which should ultimately benefit the Chinese consumers.

A2 BSH has been rooted in China for over 20 years. China is a truly exciting market, as well as one of the worlds' biggest and most dynamic home appliance markets, and one of the most important markets for BSH.

Looking ahead, we will continue to deepen our understanding of Chinese consumer insights and adhere to our BSH China strategy of "developed in China, and for the rest of the world". This means that we are introducing cutting-edge innovation and technology into China first and foremost for the benefit of Chinese consumers, and consequently for the benefit of global consumers.

A3 Our sentiment on the recent key meetings, which include the Central Economic Work Conference, is positive. We deeply feel that China's business environment continues to improve.

China has been actively building platforms that offer foreign companies greater opportunities to communicate and cooperate. Take the China International Import Expo (CIIE) as an example. BSH has participated and exhibited at CIIE for four consecutive years. Through this platform, we are able to get closer than ever to consumers and get first-hand feedback on our products, thus gaining a better understanding of Chinese consumers' actual needs.

A4 We are a major advocate of sustainable development. With China increasing its promotion of the"3060" carbon goals, Chinese consumers are increasingly paying attention to sustainable lifestyles. To respond to this demand, BSH will continue to leverage our expertise, and accelerate efforts to develop even more water and energy saving products.

A5 China is one of the most important markets for BSH, and we expect its importance to grow further. The country has two unparalleled advantages. First and foremost, it is its sheer number of consumers. Chinese consumers are increasingly discerning in pursuing the very best quality of products and services, and are also displaying a great willingness to pay for them. This plays very much to BSH's premium product offerings, and will also benefit BSH in other countries. Secondly, cutting-edge technologies are welcomed in China. This has led BSH to continue to increase its investments.

Jan Craps, co-chair and CEO of Budweiser APAC

A1 The Chinese economy has shown strong economic resilience and vitality with a recovery trend stronger than market expectations despite the challenges and difficulties. Its GDP growth remains steady, and people's disposable incomes are increasing. We are excited for the future of common prosperity in China, and for the growing number of middle-income households.

We see great potential in the Chinese market because we believe in the continued high-quality growth in this massive market.

A2 As a leading brewer, we have made solid progress in China despite the complex environment in 2021. Budweiser China's sales revenue increased by 17.5 percent during the first three quarters of 2021. The growth momentum was mainly driven by premiumization, digitalization and expansion.

With the government's proactive policy on supporting growth in 2022, we believe fruitful achievements and breakthroughs in the Chinese economy can be expected and will inject fresh impetus into the world economy. We look forward to continuing growth in 2022.

A3 The Central Economic Work Conference reiterated it would expand high level opening-up to external markets, promote institutional opening-up, optimize the business and investment environment, and continue mutual promotion of domestic and international dual-circulation. These measures have brought new opportunities for foreign-funded enterprises to invest and develop in China, and we appreciate the country's initiatives in building a favorable business environment and we are confident about future development.

A4 China's "3060" carbon goals inspired companies in ramping up efforts to embrace sustainable practices. For Budweiser China, sustainability is not just part of our business, it is our business.

We announced our 2025 sustainability goals focusing on four key areas, which are climate change, water stewardship, smart agriculture and circular packaging. Our 2025 sustainability goals deliver a clear strategy and measurable, positive impact on the environment and our communities.

A5 China is the biggest beer market in the world, accounting for one in four beers consumed globally. We see a lot of growth potential in the China market, and we really want to contribute to the high-quality growth of the economy here. We also anticipate further growth in premiumization driven by the increasing number of middle-income households. This makes China one of the highest priorities of global investment.

We will continue to invest across China as we have already done for decades. This is in line with our business strategy and we see lots of opportunities to invest in China for the decades to come.

Denis Depoux, global managing director of Roland Berger

A1 China became an even stronger manufacturing powerhouse with the boom of foreign investment and exports in the last 24 months. Now the nation is at a critical stage of economic transition, facing multidimensional challenges internally and externally. Hence "stability" is highly emphasized and prioritized for China's economic work for 2022. It is crucial for China to press on domestic consumption, accelerating industrial modernization and decarbonization to further drive economic growth. For foreign companies operating in China, the motto is more than ever "Made in China for the Chinese market".

A2 We expect our strategy and operations consulting business to continue to grow, both in the short and the long term. Although transformation creates uncertainties, it also creates the chance to rethink the existing systems and to turn uncertainty into opportunity. We believe that as management consultants, we have an important role to play in China's future development at the start of fundamental transformation, as we tackle the opportunities around the new business models, value and supply chains, and technologies.

A3 Foreign business in China is faced with a paradox. On the one hand, the Chinese market is in many cases the first or the second largest market for many European or US companies. On the other hand, constraints on technology exchanges, either on one side with the US bans or on the other side with more stringent data exchanges regulation, create some strategic uncertainty that was not there only two years ago. China should continue its reform and opening-up plan, uphold an international rule-based order, particularly emphasizing the role of WTO to be reformed, encourage international collaboration, and further develop its integration into the global economy.

A4 Regulation is not everything. Beyond new technologies, new operations and services models around energy efficiency and energy management, recycling, waste management and valorization, carbon capture and usage, combined with hydrogen, will be needed. It will require policymakers to provide support like the introduction of active short-term policy incentives, formulation of financing and commercialization models, and further development of regulatory systems.

A5 As China's economy is fully entering the "new normal", with its new focus on high-quality development over speed, tighter regulation is to be highly expected. Regulation is indispensable and important for China to create a more standardized and transparent market which supports long-term stability and economic growth. Although policy changes may bring uncertainties, China will remain attractive to our future business, and more importantly, that of our clients.

Fabrice Megarbane, president of L'Oreal North Asia Zone and CEO of L'Oreal China

A1 Despite the difficulties and pressure, we are impressed by China's stable economic recovery and strong resilience.

Even in the face of various challenges in 2021, China continues to make the market more stable, open and fair. A better business environment is one of the best proofs of China's growing economic development, and L'Oreal is benefiting a lot from it. We also believe that China's economy will continue to grow steadily in the future, with sustained efforts across the board in science and technology innovation, integrated regional development, rural revitalization, and industrial structure optimization and upgrading.

A2 The world's opportunity is China's opportunity and vice versa.

As the second largest market of L'Oreal Group, China has huge potential with people's increasing aspiration for beauty especially with the world's largest middle-income group. For the L'Oreal group, China has already become seven brands' largest market in the world and the headquarters of North Asia. We hope to drive the development of the "Beauty Triangle" and leverage regional synergy with China's opportunities and contribute more "China wisdom" to the global market.

A3 The implementation of the Foreign Investment Law and many important initiatives of opening-up such as the Free Trade Area and CIIE reflected China's determination to continuously open up and optimize the business environment.

We wish to see some pilot projects aiming for boosting the dual-circulation development pattern, and also help multinational companies to interpret and customize business opportunities and new models that are suitable for companies to play a greater role in China, for China and for the world.

A4 The commitment by China to be carbon neutral by 2060 represents a major milestone for the fight against climate change. I am impressed to witness the strong mobilization taking place across industries following this announcement. This should stimulate innovation and economic development in all sectors related to energy efficiency and clean energy.

A5 We believe China is investable for our business as always.

Changes like anti-monopoly are common practices in market economy countries. We believe that strengthening anti-monopoly and anti-unfair competition is an important and regular task of the Chinese government. It is conducive to promoting the formation of a fair competitive market environment, creating a broad space for the development of various market players, especially small and medium-sized enterprises, and better protecting the rights and interests of consumers.

Tetsuro Homma, executive vice-president of Panasonic Group

A1 As the world's second-largest economy, China has gradually transformed into a major country in terms of consumption, engineering and innovation, while remaining a manufacturing powerhouse. The Chinese market has obvious advantages in the fields of market size, talent, innovation and intelligence. After experiencing various challenges, we have seen the resilience of the Chinese economy. China's reform and opening-up process continues to advance. I believe these factors will help bolster China's economic development in the future.

A2 China is the only country that has achieved positive economic growth since April 2020, and even in the Panasonic Group, only China unit has achieved growth in business performance, spearheading growth across the globe. Panasonic's business in China is still on the growth track in 2021, along with the economic recovery in other countries. Although there will be more uncertainties and unpredictable situations in 2022, we are confident of our business growth in China.

A3 Panasonic has witnessed China's reform and opening-up since the establishment of our first joint venture in China in 1987. It is of utmost importance to maintain the direction of reform and opening-up. In this sense, we are paying attention to the Central Economic Work Conference. I fully understand that the strict prevention and control measures related to COVID-19 pandemic will be maintained in 2022, and I hope visa issuances for Japanese whose family members have been dispatched to work in China could be relaxed.

A4 I think China's "dual carbon" goals are very challenging. Panasonic carries out various businesses in a more environmentally friendly and green way to contribute to carbon neutrality. We are making efforts to build environmentally friendly stores, provide hydrogen energy batteries, and achieve energy saving and emissions reduction through the use of heat pumps and compressors. Panasonic has more than 20 years of experience in hydrogen energy. There have been successful commercial cases of hydrogen production from natural gas. We hope to bring this technology to China and strive to use hydrogen energy in Chinese factories in 2022.

A5 In Panasonic's global investment layout, we pay more attention to the huge market demand, a complete industrial chain, strong acceptance of new technologies, and the huge advantages and potential for economic development. Therefore, Panasonic will continue to explore China as an important global market. In addition, we know that the government is strengthening the supervision of companies that use consumer data in a monopolistic manner, and we are not worried about this.

Samantha Zhu, chairperson of Accenture China and member of Accenture's Global Management Committee

A1 China has proven its strong resilience and ability to recover and grow amid the complex environment. The country is on the right trajectory to further deepen its transformation in both public and private sectors, upgrade supply side, and unleash consumption potential.

In 2022 and beyond when the world shifts to reinventing what comes next, the growth pattern for the country and businesses will be more than walking a known path－focusing on market opportunities and exploring new ways of operating, but will depend on a truly differentiated change agenda, for example, prioritizing environmental and social impact, people empowerment and well-being, and new business foundations.

A2 China is a key strategic market for Accenture. Our ability to capitalize on the market opportunity and drive the digital transformation agenda is reflected in the continued growth of our business in China. This is the result of having executed for years a strategy to rotate our business to digital and cloud, hiring and upskilling people across China, and fostering deep relationships with leading local companies and technology partners.

A3 From these recent meetings that define the future of China's economy, we can clearly observe that the country has strong determination and commitment to further open up－lifting administrative and technological barriers to accelerate innovation and boost productivity. China's vast and dynamic market is an ideal place to match new worldwide demand and supplies at scale. With its vigorous digital economy, foreign investors and companies can explore the latest digital applications across various industries in China and share those innovations and best practices worldwide.

A4 China's commitment and efforts to its carbon goals and net-zero emissions remind everyone that this is the moment for business, government and society to come together to transform the economy into one that works for the benefit of all.

Accenture believes sustainability is the new digital. We are witnessing organizations taking further moves to help transition industries to low-carbon energy, reduce the carbon footprint of IT, cloud and software, design and deliver net-zero circular supply chains, integrate sustainable practices into the ecosystem, and reskill workforces among others.

A5 The business environment in China is constantly improving and the country is a fertile soil for foreign businesses like us to accelerate innovation, boost productivity and grow with local companies and partners. Accenture has been operating in China for 35 years and is the witness, beneficiary of and contributor to this land. We can feel and see the vigor that the opening-up is bringing to China's economy, and will continue to bring our most advanced concepts, capabilities and technologies to the Chinese market.