Editor's Note:Despite global uncertainties and the economic downturn caused by the COVID-19 outbreak, China is on track to embrace the 'dual circulation' development pattern as it enters the 14th Five-Year Plan period in 2021, which also marks the 100th anniversary of the founding of the Communist Party of China.
China Daily spoke to senior executives from multinational corporations to get their views on the overall macroeconomic environment, potential business opportunities, and how China can play a key role in shaping the trajectory of global growth.
Q1: How important has the China operations been in your overall performance last year?
Q2: China's new "dual-circulation" development pattern emphasizes on boosting domestic demand and further opening up the domestic market. How will your company utilize this policy to expand your presence and investment in China?
Q3: Which policy aspect in the government's 'Six Safeguards and Six Priorities' directive has emerged as most conducive to your development in China amid the global economic uncertainties?
Q4: What are your views on China's highly centralized but people-oriented economic development model? Do you think China's policies to quickly and effectively restore business activities and safeguard people's livelihood have helped your business recovery in China and contributed to the recovery of the global economy and industrial chain?
Q5: What's your take on Beijing's stance that China has entered a 'new development stage'? How would such a proposition bring changes to your China strategy?
Q6: How does China fit into your overall business strategy in the coming years? What role do you expect China to play in driving the world economy?
Q7: What aspects of China's 14th Five-Year Plan and the country's 2035 long-term development goal are you most looking forward to, and how will your company adapt its strategy according to the country's future growth paradigm?
A1: For Michelin, the Chinese market has always been an important growth engine, and it has become particularly important during the pandemic. Michelin China's business has gone through three stages: a short-term downturn, rapid recovery and sustainable growth last year.
There are several major reasons behind it: Our business has proven to be quite resilient. From the main business tires, we are gradually moving toward connected services and solutions, high-tech materials, hydrogen mobility, and Michelin experience business. We are also embracing digitalization to cope with the ever-changing market and seize more opportunities.
We are full of confidence in 2021 and beyond.
A2: Foreign companies are important players in dual circulation. Deeply rooted in China for more than 30 years, Michelin has established deep connections with the Chinese market, the mobility industry stakeholders and Chinese consumers. Michelin is an international brand, but we are Chinese company in China, serving the Chinese market, satisfying consumers' rapidly evolving demands with high-quality product and service. Foreign companies are also great beneficiaries of the dual circulation. Promoting external circulation means that China will further open up and optimize the business environment.
A3: We have deepest feelings about "safeguarding the operations of market entities". The vitality of market entities is the foundation of entire economy. The government's efforts have ensured the stability of the industrial chain and supply chain, and provided external impetus for Michelin's business development.
A4: The Chinese economy has achieved growth for two consecutive quarters, and the speed continues to accelerate. The resilience and stability of the Chinese economy are of great significance to enterprises.
The resilience of the Chinese economy paves the way for recovery. From the first sign of the pandemic, we focused our actions on two absolute priorities: to protect the health and safety of every Michelin employee and to ensure business continuity, which are in line with the country's direction. Thanks to a stable and safe external environment, Michelin was able to restart production at factories in China on February 10 and resume business growth in April last year.
The stability of China's economy can boost confidence. Michelin China proactively explores new businesses, searches for new partners and detects new opportunities. And it has been recruiting talents to prepare for a high-quality and high-speed development.
A5: The "new development stage" is an accurate judgment based on the current environment, market and people. The new development stage calls for high-quality development. China's view of development has moved from quantity to quality, which places new requirements for companies on keeping pace with such transformation. Michelin will endeavor to bring science-based and technology-focused products and services to Chinese market.
Reform and innovation are the fundamental driving force. We believe that there will be more reforms and opening-up policies that will encourage and protect innovation. Michelin is delighted to see this new development trend, and will strive more for innovation.
A6: China focuses on high-quality development and innovation, which fits Michelin's strategy well. Michelin has been in the China market for three decades, and we are upbeat about our growth here in the next three and many more decades. We are committed to contributing to China's high-quality growth in the coming decades, as we leverage our expertise and innovation capabilities to further promote sustainable mobility in this country. We are also committed to minimizing our impact to environment with our carbon neutral strategy.
A7: In the 14th Five-Year Plan (2021-25) and 2035 long-term development goals, I have repeatedly seen the word: "people". People is regarded as the most important criterion for the success of development. For example, development is for the people, development depends on the people, and the fruits of development are shared by the people, with the aim to promote common prosperity.
As part of our sustainable strategy, everything Michelin does must meet "three inseparable criteria — people, profit and planet". We share the same philosophy. Our development is by people and for people.
I'm also touched by the key direction – the high-quality growth. This is also in line with Michelin's development strategy. As an innovation-driven company, we are more confident in achieving high-quality and sustainable development in China.
A1: Our longstanding and strategic relationship with China as well as our presence in the country is core to ERG's business. China makes up about 25 percent of our sales, which include ferrochrome, cobalt, copper, alumina and iron ore products.
Despite the COVID-19 pandemic and its disruptive effects on the international supply chain, our business in China continues to post strong results, which have helped further reinforce ERG's financial performance. For example, our iron ore shipments to China reached 3.6 million tons from January to September last year, setting a new record. For the same period last year, a total of around 1.9 million in iron ore shipments was recorded.
We are committed to further developing our relationship with China and exploring new avenues of growth going forward, supporting the country's transition to a low-carbon economy.
A2: We have been a beneficiary of China's reform and opening-up policies. This is especially true in the context of the Belt and Road Initiative, which has brought great support to our project development overseas. The internal circulation side focuses on improving manufacturing, developing the transition to a service-based economy and promoting new infrastructure projects, which entail significant demand for our products such as ferrochrome, iron ore and cobalt. Therefore, we are very supportive of China's dual circulation development pattern and look forward to utilizing our extensive portfolio to contribute to China's rapid economic development.
A3: As an international metals and mining company, ERG engages in mineral products sales and project cooperation in China. Among the "Six Safeguards and Six Priorities", ensuring and promoting stability in foreign investment, international trade, supply chain and other fields has further created an attractive and reliable business environment. 2020 was a challenging year. The rapid resumption of our operations in China and the progress of ERG's trade and cooperation cannot be achieved without China's policy support in relevant fields.
A4: The pandemic has been a test for China's policies, as it has been for all countries, and there is no doubt that China's economic development model is well suited to its national needs and aims. We can already see that the Chinese economy is recovering rapidly and people's lives are returning to normal as a result of a series of drastic and well considered measures that were implemented efficiently. These measures have significantly reduced operational risks in China and helped our business to continue to develop. As the world's second largest economy, China plays a critical role in promoting and safeguarding global economic development. With a burgeoning consumer market, China is not only in a position to drive global growth but also promote regional supply chains.
A5: This is certainly a positive development and an indication of the country's growth and maturing profile. China is at the forefront of developing high-quality and innovative industries and products. For example, in the field of emerging technologies, China's progress in 5G is unparalleled. The extensive roll-out of new infrastructure is also driving the rapid development of related industries in China. ERG is confident that our extensive portfolio and strategic assets will strongly support the transformation and development of related sectors and infrastructure.
A6: China has been a longstanding and strategically important market for ERG. China is a global leader in many areas, and is certainly one of our core markets. China's vast manufacturing base provides a growing market and long-term opportunities for the mining and metals sector. China has been reiterating and strengthening its support for opening-up. From financial support to project construction and cooperation, it provides very promising avenues for us to promote our business. We believe that China's tremendous market potential and vibrant industries will continue to positively influence the world economy.
A7: We look forward to seeing the further development of emerging industries, new infrastructure, the open economy and the Belt and Road Initiative. The Chinese government has stepped up its commitment to actively develop industries including new energy vehicles, along with new infrastructure projects and construction, including 5G and EV charging stations. These will all further drive our sales of copper, cobalt and other products to the country.
China has also highlighted its intention to build an increasingly open economy and promote high-quality development in the context of the Belt and Road Initiative. This specifically includes further relaxing access to foreign investment, facilitating trade and investment, and ramping up support for Belt and Road projects. We look forward to continuing to leverage our extensive portfolio to help the country achieve its development goals.
A1: In 2020, the world economy and social order saw great turbulence due to COVID-19. Through prevention and control measures at the early stage of the pandemic, the Chinese economy showed positive signs of recovery.
During the pandemic, China continued to work, diligently serving customers, and providing the market with essential materials necessary for fighting the pandemic. We also firmly supported the efforts of the community and society to help fight the pandemic through various donations and cooperation programs.
We achieved both year-over-year and sequential volume growth in China in the second and third quarter, which represented an outstanding performance for Dow.
A2: We paid close attention to China's dual circulation development pattern which emphasizes further unleashing domestic market potentials.
Dow had been in China for 41 years with well-structured manufacturing and service network here. Growing domestic market will further accelerate Dow's growth strategy in this market. Meanwhile, Dow will continue to introduce latest innovations to China. Further opening-up the market will help Dow and our partners get access to more business opportunities.
A3: All the measures China adopted to safeguard its economy and people's living were essential to ensure the economic and social stability of China. The Chinese government has spent tremendous efforts in helping the small businesses, the unemployed and ensuring the resilience of the supply chain, which all paved the way for the quick economic recovery. Dow has benefited from a series of policies which lessened our burden during the pandemic, for example the reduced social security fee payout rate. All the local governments in Jiangsu, Zhejiang, Shanghai and Guangdong, where we have manufacturing sites, helped us resolve employee protection and logistics challenges to make sure Dow employees returned to work safely back in February and March last year.
A4: China's effective and successful control of the COVID-19 pandemic domestically and restoration of business activities nationwide contributed to its V-shape economic recovery since the later first quarter of last year. We appreciated the support from local governments which enabled Dow China team to quickly resume work and provide many essential supplies that China needed to fight the pandemic and ensure the supply chain stability. Our business in China for the most part returned to normal in the second quarter, and we also shared experiences and lessons we had in China to help protect our workforces in other countries and regions.
A5: China has entered a new development stage with an increased emphasis on high-quality growth which aligns with Dow's focus on innovation and sustainability. With hundreds of millions of Chinese consumers moving into mid-income class, there is a growing demand for high-quality products and solutions that are both innovative and sustainable. Dow has been introducing its world-class products and technologies to China since our first day in China and partnering with local customers and value chain partners to satisfy this demand trend.
A6: China is the largest international market for Dow, which is in the critical period of consumption upgrading, urbanization and sustainable development, and the demand for high value-added materials solutions is therefore increasing.
China is also transforming to play a leading role in many industrial sectors such as transportation, e-commerce, IoT, new energy, etc. All these market trends are in full line with Dow expertise and offering for markets.
We also recognize the growing efforts that the China government is paying on IP protection and business environment improvement with new legislations and regulations.
A7: Each five-year plan provides business community and international companies who operate in China with comprehensive guidance of development strategy and focuses in China. In addition to its emphasis in domestic market development, we are interested in the strategic industries that the plan spotlighted, such as new materials, new energy and high-end equipment, which are also focus markets for Dow and our customers. We expect detailed policies regarding further development of these markets and are keen to collaborate with our partners on advancing the transformation of these industries with innovative materials solutions.
A1: SUEZ was impacted by the pandemic during the first half of last year. However, in China, we've now largely recovered from this slump, thanks to the Chinese government's quick reaction and effective measures. By leveraging our local advantage, our China team has been supporting the global group to source personal protective equipment for our employees worldwide since the very beginning of the epidemic. Our experience in China proved very useful for other countries to emulate, in their response to COVID-19, and to any future consequences of the pandemic. China is a market we first committed ourselves to 45 years ago. There's no doubt that China will remain the strongest growth market of the group.
A2: SUEZ firmly believes that China, as the world's largest developing country, is a key contributor to global ecological progress. We see China acting as a responsible major stakeholder, with a vision to tackle climate change. This will surely provide companies such as SUEZ with more opportunities to introduce our global expertise and solutions to support China in reaching its ambitious environmental goals.
We are implementing our group's 10-year global strategic plan - "Shaping SUEZ 2030". We are determined to increase by 50 percent our investment in R&D, innovation and digitalization by 2023, so as to bring more innovative and customized solutions to help China, as well as countries involved in the Belt and Road Initiative to achieve their ambitious environmental goals.
A3: Among these, major interest for SUEZ include endeavor to have carbon dioxide emissions peak before 2030, achieving carbon neutrality before 2060, with nature being central to the solution and lowering carbon dioxide emissions per unit of GDP by over 65 percent from 2005 levels. We also aspire to reduce emissions, coming from our own activities, by 45 percent by 2030 and strive to become carbon neutral by 2050.
A4: As the forerunner in controlling COVID, we recognize that the Chinese government pays close attention to the environment and the health and safety of its people. The government has included many additional targets for environmental improvement. This is the strongest indicator yet that the country's 14th Five-Year Plan will prioritize qualitative environmental outcomes over quantitative economic metrics. We are keen to apply our global expertise and technology to the Chinese context, to help local authorities and industrial clients develop innovative solutions for climate change and sustainable resource management.
A5: China is about to embark on the 14th Five-Year Plan, yet another milestone in its development process. The country now faces more sophisticated environmental challenges than before. Its goals and actions are much clearer. We are convinced that China will continue to grow stronger as a responsible stakeholder in global climate governance and as one of the most technologically advanced countries. Environmental companies such as SUEZ will play an important role in promoting green transformation and driving sustainable, healthy economic development. This also fully mirrors our global strategy toward three priority areas: expanding our footprint in international markets, especially in China; increasing our engagement with industrial customers; and launching more digitally advanced solutions.
A6: In the past decade, China has been continually changing, driving new growth models with new philosophies. Governments at both central and local level have made environment protection part of their development agenda, and they are vigorously promoting a green and circular economy.
SUEZ's development journey in China reflects not only how foreign companies have been driving China's progress toward a circular economy, but also how China's approach to the environment sector has evolved. We see the growing importance the Chinese government attaches to environment protection and the growth opportunities it provides for foreign companies in China. Such trends are bound to endure, well into the future.
A7: I understand China is expecting quick improvements in the environment, so we have to continually adapt our business model to keep pace with these. I believe that this country offers SUEZ many opportunities to develop.
The technologies and experience we have within the SUEZ Group are very much aligned to meet all these ambitions and to support China in reaching its growth goals.
A1: China is the only major economy in the world to show positive growth so far in 2020 and Honeywell's business has benefited from that momentum.
At Honeywell, we bring together the physical and digital worlds to tackle some of the globe's toughest business and societal challenges. The COVID-19 crisis confirmed how important digital technologies are and it also enhanced our customers' understanding of their importance. China's digital economy has undergone rapid changes due to COVID-19, and we believe that our software-industrial technologies will play a role in helping customers adapt to these changes.
As it is largest single market outside the United States, China is very important to Honeywell.
We are optimistic about China's economic growth prospects and hope to be a key partner in its future economic development.
A2: Honeywell's strategies of "East for East" and "East to Rest" have put us in a perfect position in the new age of dual-circulation to meet the needs of both domestic and overseas markets.
As early as 2004, Honeywell put forward the Chinese market development strategy of "East for East," that is, to meet the needs of the Chinese market through a series of local product development and innovations. As more Chinese companies "go global", this plan allows Honeywell to thrive in China and meet other global demands.
With China opening further to the world, Honeywell will continue to enhance local R&D capabilities and export technologies and products developed in China to overseas markets to implement the strategies of "East for East" and "East to Rest".
A3: We found the policies to ensure stability in foreign trade and foreign investment most appealing. In August last year, the State Council issued guidelines with 15 measures, including more favorable policies in encouraging overseas business to set up R&D centers. We also appreciate that different levels of government in China have unveiled measures to enhance the business environment and ensure that foreign-funded companies enjoy the same treatment as local businesses.
Honeywell became the first Fortune Global 500 enterprise to establish a subsidiary in Wuhan in 2020 by launching the Huosheng Industrial Technology Co Ltd as our emerging market headquarters and innovation center. We were able to ensure Honeywell's wholly-owned subsidiary in Wuhan was registered on March 21 last year thanks to the close cooperation and support from the Wuhan government, even amid the COVID-19 epidemic.
A4: In China, people from all walks of life are fully supporting the fight against the epidemic. China mobilized people, enhanced R&D, procured supplies, and brought them to those in need rapidly. The country has rolled out a host of policies to minimize the COVID-19 impact on social and economic development. Last year's CIIE also demonstrated China's desire to share market opportunities with the world and promote world economic recovery.
Thanks to China's epidemic protocols, Honeywell's plants in China could swiftly and fully resume manufacturing to serve customers.
A5: China has undergone an amazing digital revolution that is transforming the way we live and work with exciting new products that connect us and incorporate software and data in new ways. The COVID-19 epidemic further confirmed how important digital technologies are and also enhanced our customers' understanding of their importance.
Another takeaway from the test of the pandemic is that companies should seek innovations that really work for people -- innovations that are more affordable, human-centered and socially sustainable. Honeywell will continue our efforts to provide high-quality innovative solutions for customers in China.
A6: Honeywell's growth has fully aligned with China's macro trends, like the digital economy and beautiful China. As it is largest single market outside the United States, China is very important to Honeywell. We are optimistic about China's economic growth and believe the importance of the Chinese market will only grow.
A7: Honeywell believes China's commitment to openness will have a positive impact on recovery and development of the global economy.
Honeywell will continue to expand and deepen cooperation with Chinese partners, provide customized solutions for customers in different industries through advanced R&D and products, serve the sustainable development of the Chinese market.
With the proposal to establish a "Digital China," innovation and technology will also be focal points for the 14th Five Year Plan. We believe that Honeywell's software-industrial technologies will play a role in expanding China's digital economy.
A1: For BASF, China is currently the third-largest market after Germany and the United States, with the strongest potential for growth. Around 60 percent of global chemical demand growth over the next 10 years will come from China. As a company that has been doing business here for over 135 years, we certainly want to be part of that growth.
We continuously work on our present investment projects and expansions with which BASF wants to further strengthen its position in China and accelerate organic growth.
The construction of our first plants at our new Guangdong Verbund site in Zhanjiang is on full swing.
Even in the challenging situation overshadowed by the COVID-19 pandemic, we were already well above the previous year's level in China in terms of revenue in the third quarter last year. The chemical production in China embarked on a V-shaped recovery.
A2: We produce closely to where our customers operate. Over the past two decades, we have been continuously expanding our production and R&D footprints in China to serve the growing demand for high-quality products and innovative solutions. We are certainly accelerating our pace to further invest in China market.
A5: China's development enters the phase of quality growth, which benefits innovative companies such as BASF.
We are committed to fostering innovation in China by constantly enhancing our local research and development capabilities. The Innovation Campus Shanghai, located at the BASF Shanghai Pudong Innovation Park, is BASF's global headquarters of Advanced Materials and Systems Research division.
In addition, leveraging the platform of Network for Asian Open Research, BASF is committed to enhancing R&D capability and talent development across Asia-Pacific.
A7: The new strategy emphasizes on innovation and sustainability. From my point of view, they are the key success factors to drive coordinated and high-quality development of the country. We share the same vision with the government on these topics. BASF will keep bringing a difference to the market with our commitment to sustainability and innovation.
We also welcome the country's strategy of deepening reform, opening-up and strengthening the protection of intellectual properties. As a multinational company with extensive footprint in China, we have benefited from the government's efforts in these policies, in terms of simplified approval process as well as widening market access. I believe these solid supports will further boost BASF's growth in China market.