Foreign execs bullish on 2023 business climate

Editor's Note: China Daily is publishing interviews with senior executives of major foreign enterprises to gauge their outlook for the Chinese economy, their operations in China and their business plans for 2023.

Q1 Given the backdrop of a feared global economic recession, threats to global supply chains and the deep impact of the COVID-19 pandemic, what's your outlook for China's economy and your company's operations in China in 2023?

CHAN: China has the potential to be an active and leading force in the global economy and will play a more prominent role in driving global economic recovery and growth in the coming year as it has made significant efforts to address some regional challenges. China will be a key contributor to the global economy over the next decade, and it is an important market in FedEx's global strategy. FedEx has confidence in the country's potential and will continue to support the connectivity between China and the world by leveraging our network and capacity to empower global economic growth.

LIU: Against the backdrop of the global pandemic, China has made progress while ensuring stability and constantly stepping up to a new level, demonstrating the strong resilience and great vitality of its economy. The country has provided significant support for global industrial and supply chains, creating a stable and sound environment for growth for multinational corporations.

Carestream Health has witnessed the vigorous development of China's economy and has been involved in the development of China's healthcare industry for a long time. We have full confidence in China's future and healthcare undertakings. We will continue to increase our investment in healthcare innovation, support the Chinese path to modernization, promote the high-level development of the healthcare industry, and create a solid health foundation for common prosperity.

YE: In 2023, the world economy is still feeling the frost, but it is anticipated that the Chinese economy will turn around sooner, which will energize both regional and global recovery. China's economic and social vitality will be further liberated with the gradual recovery of domestic demand and the synergy of policy effects. In the Year of Rabbit, cities nationwide have seen a consumption surge as the factors limiting people's offline consumption were lessened. The robust resilience and enormous potential of China's consumer sector are demonstrated by the booming holiday economy. More significantly, consumer confidence has returned.

TAN: I am optimistic about Skechers' growth in 2023. Investing in China is investing in the future. With a population of over 1.4 billion, China has a large market size with room for expansion. China's economy has been growing resiliently and has a strong production capacity. With the economy's growth, the diversified and personalized consumer demand also makes us optimistic about the Chinese market.

I believe Skechers' ever-improving infrastructure investments will improve operational efficiency for our partners and bring a better experience to Chinese consumers.

XU: We maintain a positive outlook for China's economy and our businesses in China in 2023. As the second-biggest economy in the world, China needs green transformation for high-quality development, while Danfoss has proven solutions that are in perfect match to support China's green transition. One of the main drivers for our continued and strong growth is the strong momentum of green investment unleashed by China's pledge to reach its dual carbon goals.

With ongoing investment projects, we have robust growth aspirations for the China market and we have high hopes that our China business will continue to be a strong engine for our global growth.

Q2 Which business segment (s) of your company do you expect to see high growth in China this year? What are the new trends and interesting business opportunities in the Chinese market that your company might be keen to tap? How will you align your business strategies with such trends?

CHAN: Foreign trade and cross-border e-commerce play a significant role in China's economic growth. Foreign trade has been one of the major drivers of China's economy for decades and cross-border e-commerce is the new force behind foreign trade, pushing development that will further boost China's economy to rebound and develop sustainably.

FedEx is committed to exploring and investing in new technologies to support cross-border e-commerce growth in China, such as testing autonomous delivery vehicles and deploying AI-powered intelligent sorting robots. FedEx values the ongoing development of cross-border e-commerce that continues to drive accelerated growth and fair international business trading practices will increase opportunities for future development.

LIU: With the deepening of healthcare reform, the whole healthcare industry has been pushed toward focusing on quality, encouraging innovation and improving accessibility. The trend of high-quality growth has brought opportunities for a new wave of innovation in China. Carestream Health has always been committed to being customer-centric and improving patient care while reducing costs and increasing efficiency.

In the next 15 years, we will combine the global strategy with the concept of local innovation, and promote the high-quality development of healthcare services in China with our intelligent and local innovations.

YE: The market for new energy vehicles in China has been expanding rapidly. Given the rise in market share and consumer identification, we believe this growth momentum will persist in 2023 and inject strong impetus into Michelin's development in China.

Today, the market requirements have fundamentally changed. Consumption desire has transformed from "good products" to "pleasant experiences" and "sustainable lives". This transformation brings new challenges and opportunities to all enterprises.

Additionally, Michelin vigorously promotes the concept of sustainable development in China, to help the green transformation of the rubber industry and the realization of China's dual carbon goals.

TAN: We will expand sales channels in the lower-tier city market and plan to open 700 new stores across China in 2023, and we will continue to develop innovative and diversified products based on different age groups. The demand for footwear and clothing products has been changing and becoming more diversified in China. For example, consumers' clothing styles in Shanghai are different compared with other cities. There is no one-size-fits-all solution for designing products in China.

Under such circumstances, our group will continue to create innovative and diversified products based on different age groups and create a unique Skechers parent-child experience through brand renewal, brand culture and targeted marketing.

XU: Green and low-carbon transformation are key to China's high-quality development. Danfoss has successfully improved more than 44 percent of energy production on our own campuses in the past five years, paving ways for industries to decarbonize their businesses.

With only seven years to achieve China's goal to peak carbon dioxide emissions by 2030, we believe every business, especially in the building, transport, and industry sectors, needs proven experiences that will help to decarbonize their growth, which makes Danfoss more relevant than ever. Therefore, with China's reaffirmed dual carbon goals, we see burgeoning business opportunities for all business sectors on the horizon.

Q3 China's top policymakers have pledged greater efforts to attract foreign capital, widen market access, promote further opening-up of modern service industries and ensure a level playing field for both domestic and foreign companies. In this context, what measures do you expect this year? Will you draw up new plans for investment, hiring and business expansion in China?

CHAN: The Chinese government has leveled the playing field between foreign and domestic companies, which is important for foreign companies to grow in the country. FedEx will strengthen its networks in China to connect this market more closely with the world through efficient and reliable transportation services and solutions and continue to invest in infrastructure to expand our service efficiency and quality. We will also empower small and medium-sized enterprises to expand their international business by providing extensive market insights and "one-stop" Customs clearance solutions, as well as customized and end-to-end logistics solutions, which help enhance global vitality.

LIU: China's unwavering determination to expand high-level opening-up has been declared many times, which deeply encourages and motivates us. We are more confident in being rooted in and deepening development in China. We will continue to expand our business in the Chinese market. We will continue to pay close attention to the policies of the Chinese government to support the development of foreign companies in the country and attracting more global capital. Continuous optimization of the investment and business environment and implementation of the Foreign Investment Law will help create a better development environment for multinational corporations.

YE: Michelin has witnessed the continuous optimization of the business environment in China for more than 30 years. The policies for foreign enterprises continue to improve, including the implementation of national treatment for foreign investment, investment facilitation measures and R&D incentives. China is now entering a new stage of high-quality development, which is inseparable from the support of a high-quality business environment. In 2023, we expect governments at all levels to continue to optimize the business environment through policy support, talent training and platform construction.

TAN: We look forward to the continuation of preferential policies in areas such as tariff exemptions and priority on land supply, as well as the opening of more preferential policy support based on the expansion of foreign investors to lower-tier cities to help foreign investors coordinate and mobilize resources for investment promotion.

Talent is the inexhaustible driving force for the company to move forward. We will continue to stockpile talent to build a team that is at the forefront of the market and consumer-centric. As our channels continue to be updated and expanded, Skechers will create more jobs and take on greater social responsibility in China.

XU: The opening-up measures by China's top policymakers, especially in the green sector, and the highlighted focus on the protection of intellectual property and innovation, have strengthened our long-term confidence in the Chinese market, which is driving our continued investment in China. We would like to see more such innovative cooperations between government and businesses in 2023 and beyond.

Danfoss is committed to long-term investment in China. Our recent announcement of 100 million euros ($106.4 million) to build a model plant in Nanjing, Jiangsu province, is a clear sign of our continued positive outlook for the Chinese market.

Q4 This year marks the 45th anniversary of China's famed reform and opening-up policy. In this context, in which areas do you expect more progress? How is your business likely to benefit?

CHAN: Foreign businesses operating in China have played an indispensable role in supporting China's economic transformation and prosperity since the reform and opening-up. We look forward to China's efforts to further improve the business environment. With the accelerated pace of institutional openness and more open and fair opportunities, the potential of China's market will further increase, which will boost FedEx's contribution to the development of foreign trade and the stability of industrial and supply chains in China.

LIU: In the 45 years since China's reform and opening-up, Carestream Health has been a deep participant and the implementation of our localization and innovation strategies has achieved remarkable results. We also recognize the importance of continuously strengthening and stabilizing the supply and industry chains. To this end, Carestream Health has steadily promoted the upgrading of the localization strategy through product line localization, in-depth innovation and R&D, and local business model upgrading, and improved the high-end manufacturing capacity and local supply chain construction.

YE: China's opening-up has brought tremendous development and sustained vitality to the country in the past 45 years. The Chinese society, consumers, and domestic and foreign companies are all beneficiaries of this policy. Michelin China has grown from a sales office to a business entity with three factories, a regional headquarters, a research and development center and a sales network all over the country. We expect a higher-level opening-up, which includes deepening institutional protection and expanding multiparty cooperation. The government can further improve market access and legal protection, bringing more opportunities to all companies. Meanwhile, more sustainability-related platforms are expected to promote dialogue and cooperation among government, companies and consumers, thus creating a greener future for all.

TAN: We congratulate China on the 45th anniversary of its reform and opening-up. China continuously optimizes the business environment for foreign investment. Skechers has benefited from the policy facilitation measures provided by China in trade, finance, taxation, business and industry for 16 years. The Chinese economy shows resilience and vitality, bringing us stronger support and more stable expectations. China has a complete industrial system and infrastructure protection, with a large market size and cutting-edge technology application scenarios.

We look forward to the subsequent government policy support and encouragement in technology, brand, management, digital transformation and other aspects.

XU: Since Danfoss started operations in China in 1996, our business here has been booming, which could not have happened without support from policymakers on various levels. Standing upon a new threshold of reform and continued opening-up, we would like to see an elevated level of opening-up policies, especially in the area of market access, and have the policies institutionalized, which will not only benefit the businesses of international companies, but also contribute to China's goal of high-quality development.

Q5 As China continues to pursue high-quality development along a Chinese path to modernization, what is your vision for your company's business in the country? What business opportunities do you foresee emerging as part of this process?

CHAN: China's 14th Five-Year Plan (2021-25) on modern logistics released in December 2022 highlighted the significance of the logistics sector in supporting China's high-quality development. In this context, FedEx will continue to optimize our network to improve logistics efficiency and support the stability of the industrial and supply chains. We look forward to contributing in the areas of logistics and transportation, technology and sustainability, and ultimately working together with all parties to create opportunities to connect China with the world.

LIU: Driven by favorable national policies such as rural revitalization, boosting health-related industries and investment in new infrastructure, the entire healthcare industry will move towards higher-quality development. With the continuous deepening of the localization strategy, Carestream Health will continue to deeply blend into the Chinese healthcare innovation ecosystem with "Made in China" and "Innovated in China".

In the future, our innovative technologies will help imaging centers around the country to provide high-quality healthcare services for patients, improve efficiency and reduce costs.

YE: China's development aspirations are in line with Michelin's long-term efforts. Michelin is devoted to developing products and solutions that meet the needs of Chinese consumers, to achieve sustainable development with the industry and the whole society. During this journey, we must capture two major opportunities — circular economy and disruptive technology.

First, circular economy — opportunities lie in global common visions to lower carbon emissions, promote clean energy and improve biodiversity. This will prompt foreign companies in China to align growth strategies toward sustainability.

Second, disruptive technology, particularly smart digital solutions — in China, we see more cities and companies gearing up for the deployment of smart mobility.

TAN: In China, the sports industry is accelerating structural upgrading and maintaining sustainable development. With the resilient growth of China's economy, new growth dynamics will continue to emerge with huge market potential, new consumer demands and emerging trends.

We are noticing a growing consumer preference for sustainable products. Digital transformation and online and offline integration are also vital to grow our business in China. We have invested 3 billion yuan ($435.6 million) in a project in Fenggang town, Dongguan, Guangdong province, integrating innovation, manufacturing, warehousing, digitalization and other elements of the whole industry chain to form a functional regional headquarters for Skechers, further promoting the intelligent upgrading of the front and back ends.

XU: Green and low-carbon economic transformation is a key part of China's high-quality development. The role of energy efficiency solutions is to help improve development quality, which is a perfect match with China's priorities. With China's dedication to green growth, we remain hopeful that our energy efficiency business in China will keep growing and we have made ambitious growth plans in China that we are very confident to achieve.