'Dual circulation' to boost growth (III)
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 (2021-25) 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 have your China operations been in your overall performance in 2020?
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 chains?
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?
Wei Jiang, president of Bayer Group Greater China. [Photo provided to chinadaily.com.cn]
A1: While 2020 has been an unprecedented year, with numerous business challenges brought by the pandemic, our organizations – especially production facilities – have been operating largely uninterrupted as we continue our investment and cooperation in China.
From the beginning of the pandemic, we put our employees' health and safety as our top priority. Then we ensured business continuity that allowed us to provide patients, consumers and farmers with the products that they urgently needed.
A2: The Chinese leadership has on many occasions stressed that dual circulation is by no means a closed domestic loop, and reaffirmed that opening-up is still a fundamental national policy.
Bayer is inspired by these supportive messages. With this growth model and our corporate vision of "Health for All, Hunger for None", Bayer will continue to leverage our expertise in healthcare and agriculture, while improving Chinese people's accessibility to our high-quality products and solutions.
A3: In the past year, the government has attached great importance to stabilizing foreign investment and trade, and has implemented several policies to support foreign enterprises as they resume work and production. Bayer is extremely grateful for the efforts made by the central and local governments to boost the economy, and to help enterprises navigate emerging challenges.
A4: Due to China's decisive and powerful prevention and control measures, as well as the unremitting efforts of its people, China has achieved strategic success in pandemic control, with all aspects of society gradually returning to normal. The stable development of Chinese society guarantees Bayer's production and operation activities in the market, and has also increased our confidence and determination to further invest.
A5: The transition from rapid growth to high-quality development is an epoch-level event in China's long economic history. In this new development stage, medical care and agriculture will remain critically important. Bayer will leverage its accumulated experience in China and its global innovation resources to continue to meet its increasing and evolving needs in healthcare and food supply.
A6: Bayer is highly appreciative of the Chinese government's determination to deepen reform and open up. As the entire world faces a huge public health crisis, open cooperation is particularly important to every country's success. Bayer is very pleased to see how China continues to build a market-oriented and legitimate international business environment, and treats all types of companies equally – both domestic and foreign-owned.
Bayer is strongly positioned to be a valuable partner in China's development. For the next five-year plan, and even into the more distant future, Bayer looks forward to making a greater impact on China's next-stage goals, its new journey to fully build a modern socialist country, and shared success for both the country and Bayer.
A7: As a life sciences company, Bayer's purpose of "Science for a Better Life" and its vision of "Health for All, Hunger for None" are strategically aligned with China's national goals of Healthy China 2030 and building a comprehensively well-off society.
Bayer is committed to China, will remain in China and will continue to invest in China.
Alan Gabor, Merck China president. [Photo provided to chinadaily.com.cn]
A1: In spite of all the disruptions and uncertainties, we are successfully maintaining our business continuity in China. We are striving with all our efforts and proactively working with local authorities, and suppliers to minimize the impact. Today, we are meeting all our customers' needs.
Overall Merck has had double-digit growth so far. And we've been able to do that because of contributions from all of the three pillars of our business: Life Science, Healthcare and Performance Materials.
A2: We see that China's "dual circulation" development pattern will help with further deepening and stimulating the domestic consumer market, and thus will add a lot to the dynamics and resiliency of China economic environment. The "dual circulation" mechanism is going to further reinforce technology-driven development.
We believe that a "golden decade" for China's semiconductor industry has just begun. We will be accelerating our investments in China, especially in the electronics space. We expect 2021 will be a new record year of our investments in electronic materials and technology in Chinese market.
A3: These initiatives are key elements in shaping and building a stable and healthy business environment. We believe that lowering the financial burden, tax reduction and rental reimbursement policies will further vitalize business activities in China, and will certainly benefit businesses in China.
A4: We all witnessed that China has successfully contained the pandemic, and the business recovery is well on track with strong policy support. We are very confident that China's economy will soon rebound. We have been here for 87 years, and continue to have firm confidence in China.
A5: We believe China's ambitions to be a leading high-tech nation are attainable. And we are committed to playing an active role in this transformation.
We have been in China for 87 years -- we are here to stay, invest and be even closer to our customers. We want to become a fully integrated part of the local ecosystem. We will continue to develop our partnerships with key players in China, enhance our capability across all three sectors, and continue our journey in seeking the best talents in the market.
A6: China is a strategic market for Merck. The Chinese market is becoming increasingly important to Merck. Today, it's our second-largest sales market worldwide. In the Display Solutions business unit (Performance Materials) and the General Medicine & Endocrinology franchises (Healthcare), China is already our No 1 market.
China's hyper growth will continue in the coming years, and this will add a lot of dynamics and resilience to the world economy. We believe China will be the driving force for the global recovery.
A7: We are seeing great progress on streamline administration, improved regulation environment, and upgraded services through authorities as well as faithfully implemented tax and fee reduction policies. The greatly shortened negative lists for foreign investment market access are also attractive to foreign investment. We will continue to build on our "In China, For China" strategy, to improve our local expertise, and extend our footprint in the technology-driven areas.
Joanne Crevoiserat, CEO of Tapestry Inc. [Photo provided to chinadaily.com.cn]
A1: As one of the world's largest consumer markets, the strong resilience, vitality and growth of China's economy emerging from the pandemic has accelerated the recovery of our operations globally.
In the first quarter of the 2021 fiscal year (ended September 2020), the strong growth of the Chinese market was an important driving force behind the significant sequential improvement in our topline trends. Our sales in China grew at a double-digit rate on a year-on-year basis with continued strong performance across our e-commerce channels resulting in triple-digit online growth.
We are now more confident than ever in the growth potential of the Chinese market.
A2: Under the dual-circulation pattern, China's increasingly open market has created an excellent business environment for investment and development for foreign companies such as ours. It also encourages us to accelerate the China localization process, actively promote consumer upgrades and digital innovation, and embrace the change and development, thereby continuously creating value.
We have also observed a very important trend in China: the rising number of people in the middle-class as well as the rapid development in the nation's lower-tier cities. We will also further accelerate the planning and investment in regional markets as we grow our distribution network. The second- and third-tier cities in particular hold great potential.
A3: China's six safeguards and six priorities laid the foundation for the high-quality development of China's economy. Among them, a series of "stabilizing foreign trade, investment" policies and measures have further optimized the business environment and strengthened our confidence in continuously growing the Chinese market.
A4: China's people-oriented economic development model is now more focused on "quality" growth that is highly inclusive, bringing tangible benefits and providing incremental certainty and confidence to the market.
Companies in China, including Tapestry, have gained much from it, such as confidence to quickly resume normal operations, and excellent experience and learning to bring to our retail operations in other countries and regions
Given the unique and challenging year, the strong resilience and growth of the Chinese economy was an important factor in the accelerated recovery of the global industry.
A5: China's new development stage will create more opportunities for foreign companies such as Tapestry. High-quality growth is our focus now, and it forms the core pillars of our "Acceleration Program": Sharpening our focus on the consumer; leveraging data and leading with a digital-first mindset; transforming into a leaner and more responsive organization.
A6: The China market is extremely important to Tapestry. When we look at how far we've come in China, we feel we are only beginning to realize its potential and want to participate in the market's growth.
China is not only a significant market for Tapestry, but also a valuable source of inspiration. Chinese customers are rapidly evolving in their journey of self-discovery and are now driving fashion innovation globally. They are calling for a quality lifestyle with more personalized products and services that add value and fashion relevance to their life. We see tremendous potential for our brands in China. We are committed to the long-term development of this market.
One example of this is the way in which we partner with local designers. In Coach's runway show in December 2018, we had collaborated with four Chinese artists to reinterpret the codes of Coach. This China Collective was not only a huge success in China but around the world. In June this year, we further collaborated with the design talents of Shanghai Donghua Universities and the collection was also very well received.
We will continue to leverage our global platform to bring Chinese design to the world fashion industry.
We also believe that China will play an important role as a growth driver and stabilizer in the world economy.
The efficiency of the supply system, the tremendous consumption potential, and digital infrastructure and innovation with 5G, data centers and internet of things position China as an important hub in the global industrial chain, linking the world and encouraging a global economy. While the pandemic adversely affected the economy, production resumed and recovery began quickly in China, helping to support the stability of the global economy.
A7: The fundamental goal emphasized in China's the 14th Five-Year Plan (2021-25) and the country's 2035 long-term development plan is to meet the needs of and provide a better life for the Chinese people. This is consistent with our commitment to the Chinese market, and we will work to meet Chinese consumers' high expectations for a better and more personalized lifestyle.
Leon Wang, executive vice-president of AstraZeneca, and head of AstraZeneca China. [Photo provided to chinadaily.com.cn]
A1: China is now our No 2 market worldwide and growing rapidly. It is very important for AstraZeneca and has some important unmet health needs in key disease areas like respiratory, cardiovascular, metabolic, oncology, gastrointestinal and renal, which also represent the main therapy areas for AstraZeneca.
In 2019, our China operations achieved sales of nearly $4.9 billion, and as of Q3 2020 received a revenue of $4.013 billion, taking more than 20 percent of the total revenue at AstraZeneca globally.
China also breeds "fertile soil" for R&D in new drugs. The Global R&D (China) of AstraZeneca, located in Shanghai, was officially inaugurated in 2019. In the future, its focus will be expanded from carrying out China's confirmatory studies to carrying out R&D at an earlier stage.
A2: Under the new development model of the "dual circulation", AstraZeneca will continue to invest in China and further realize our China commitment through the launch of multiple regional headquarters, not only contributing to the local economy, but also promoting the application and incubation of healthcare innovation. AstraZeneca is committed to empowering further integration of the entire healthcare industrial chain, activating regional innovation capabilities, and supporting the long-term stable development of the Chinese economy.
A3: China has emphasized ensuring stability in foreign investment. This will have a direct positive impact on foreign companies like AstraZeneca doing business in China. Especially during a period of such global uncertainty as brought by the pandemic, this government policy has reinforced our confidence in increasing our investment in China. The policy will also facilitate further cooperation between us and our local partners in China.
A4: China's successful stories of lifting people out of poverty and improving the society's overall economic development have inspired many, especially us, a foreign company rooted China for over 20 years. We have witnessed the continuous and steady growth of China's economic development under its people-oriented economic development model. The pandemic has not impeded China's determination and continuous efforts to promote the common development of the world through its own economic development.
A5: We believe that the policies carried out to fit in the "new development stage" will not only meet China's own development needs but also benefit the people worldwide. This "new development stage" will boost interaction and mutual promotion between domestic and foreign markets, better leveraging China's economic resilience and its role as a growth engine.
We will continue to promote our China strategy and seize the opportunities in the Chinese market. We hope to serve as a bridge that connects the global healthcare industry with China, leading the industry toward a more connected and win-win future.
A6: Our next step is to bring Chinese innovations to our global markets and benefit patients worldwide. We will not only accelerate our local R&D capabilities in China and introduce more locally developed innovative drugs to the world, but also replicate the innovative healthcare solutions we incubated in China to other parts of the world. By embracing open innovation and cross-sector partnership, we hope to strengthen China's leading role in the global healthcare industry.
The Chinese economy has shown strong resilience and has played a leading role in the global fight against the economic uncertainty brought by the pandemic. Moreover, to unblock the global industrial chain and boost world economic growth, China also introduced a series of new measures to further improve the business environment and to strengthen international trade, investment and financial openness. With the long-lasting impact of the pandemic, we believe that the stable and sound development of China's economy is a strong support to the world economy, and China's leading role in the world economy will be further highlighted.
A7: The 14th Five-Year Plan calls for the comprehensive construction of a "Healthy China", which aims to provide the public with comprehensive healthcare services and to improve the public healthcare system in the primary market. AstraZeneca will continue to explore holistic disease management solutions that cover disease education, screening, diagnosis, treatment, follow-up and rehabilitation. We will continue to incubate healthcare innovations that contribute to the efficient allocation of quality healthcare resources, helping China to improve its hierarchical healthcare system.
Saravoot Yoovidhya, CEO of TCP Group. [Photo provided to chinadaily.com.cn]
A1: As TCP's top overseas market, China is integral to the success of our business globally. In 2020, this has become even more apparent during what has proven to be one of the most challenging years faced by the whole world in decades.
Throughout the year, TCP has focused on doing our part to contribute to China's recovery by further deepening our local commitments. We unveiled plans to invest 1.06 billion yuan in the Chinese market over the next three years. This large-scale investment will help to expand TCP's domestic business by strengthening our local partnerships, establishing a new representative office, in-country team, and manufacturing centers as well as supporting the launch of new Red Bull products.
As my family's ancestral home, China has always held a very special place in my heart.
A2: We're confident that this new economic paradigm will help to usher in a fresh chapter for the next phase of China's development, enabling the country to effectively mitigate the effects of a more challenging external environment while further accelerating its longstanding transition toward more balanced, sustainable and inclusive growth.
TCP is confident that "dual circulation" will create exciting new opportunities for our global "House of Brands" to tap into.
A3: The Chinese government's focus on ensuring stability on the six fronts and security in the six areas has been critical to keeping the economy on an even keel and supporting its accelerating recovery. All aspects of the six fronts and six areas have proved conducive to the continued development of both Chinese and foreign companies.
For TCP's business, the focus on continuing to support foreign trade and investment, safeguard the operations of market entities and ensure stable supply chains have been particularly important.
A4: TCP has benefited enormously from China's success in quickly getting the pandemic under control. This success enabled us to first maintain stable operations during the early days of the outbreak and then stage a gradual return to our normal business activities ever since. It also gave us the confidence to proceed with our new three-year commitment to invest more than 1 billion yuan in the Chinese market.
I've been deeply impressed by China's efforts to safeguard people's health and well-being during the pandemic as well as their livelihoods.
A5: In recent years, as China moved toward its goal of building a "moderately prosperous society," it became increasingly clear that the country's transition toward a new phase of development was accelerating rapidly. TCP has also moved quickly to ensure that our own development as a business is closely aligned with the game-changing shifts unfolding throughout China's social and economic landscape.
For example, we've been actively expanding our domestic manufacturing capacity through new local partnerships. We've been striving to make meaningful contributions to China's drive to transform itself into a global powerhouse for innovation.
A6: China is already at the heart of TCP's business strategy. In the future, I'm certain that the Chinese market will become even more important to our continued success, particularly as it continues to play a leading role in powering the global economy's recovery from the pandemic. TCP will need to further deepen our presence in the Chinese market to ensure that we both contribute to and benefit from its future growth in the post-pandemic world.
A7: China looks set to dramatically accelerate its transformation into a global powerhouse for innovation, sustainability and consumption. We will make certain that our business strategy is carefully adapted to ensure that we make meaningful contributions to those national priorities as China's grand blueprint takes shape over the next half decade as well as longer-term through 2035.
For example, we will support China's innovation drive by continuing to expand our IP-related initiatives with our local partners, particularly TCP's IP fund and our new partnerships in this field.
Will Song, global senior vice-president and China chairman for Johnson & Johnson. [Photo provided to chinadaily.com.cn]
A1: China is not only an important growth engine for our global business portfolio. It has also become an innovation powerhouse that propels our long-term business development in China and beyond. Johnson & Johnson's business has witnessed strong growth in China since the second quarter, leading the global market. For example, our Medical Devices business achieved double-digit growth in both the second and third quarters, further boosting China's share in Johnson & Johnson's global business portfolio.
A2: We are pleased to see that China continues to open up and is dedicated to creating an open and fair business environment. China's new "dual circulation" development pattern is beneficial for the company's development in China by providing a vast market. We strive to meet the patients' and consumer's fast-growing needs by introducing more globally advanced products and solutions to China.
A3: We are encouraged to see that the Chinese government continues to promote an open, fair, transparent and predictable investment environment. It not only boosts the confidence of foreign companies like Johnson & Johnson, but will also help the economic recovery and growth.
A4: I'm deeply impressed by the Chinese government's stance of putting the lives of the people first and acting quickly and decisively to successfully control the further spread of the virus, which allowed the nation's economy to be the first in the world to recover.
This not only supports the world economic recovery, but also boosts the confidence of multinational companies like Johnson & Johnson to continue to invest in China. With government support, all of our plants and offices across our businesses in China have quickly resumed operation earlier this year to ensure the stable and sustainable supply of critical healthcare products for our patients and consumers.
A6: China is the "growth and innovation" dual engine for Johnson & Johnson. With an emerging middle class, aging population, and increased healthcare awareness and customized needs for high-quality healthcare products and services, China has the potential to lead the world into a healthy future.
As China is the first country to achieve economic recovery amid the pandemic, our business sectors in China – medical devices, pharmaceuticals, consumer health and vision -- have all achieved strong growth since Q2. In particular, our medical devices business has witnessed significant double-digit growth in Q2 and Q3, further increasing China's share in the company's global business portfolio.
Under the post-pandemic new normal, we believe China will be playing an increasingly strategic role for Johnson & Johnson's global business and truly fulfill our position as the duel engine.
A7: Johnson & Johnson's development strategy in China is very much in line with China's future development strategy. In the new five-year period, we're looking forward to seeing more support from the government in innovation, especially in the healthcare industry.
We are also deeply encouraged to see that China has put "building a healthy China" in a strategically important position, which provides a strong driving force for the development of multinational healthcare enterprises in China, including Johnson & Johnson.