Meeting expectations for a better life
Ecolab predicts more joint efforts from the Chinese government, industry and the public to solve crucial challenges
Doug Baker is CEO of Ecolab Inc, a United States-based global leader in water, hygiene and energy technologies and services.
What has been China’s biggest achievement during the past five years and the most notable change?
China has put in place sound environmental policies, which will serve the country well and accelerate the development of its consumer economy.
he government has a clear plan and is providing consistent leadership, and the people have energy and enthusiasm for the future. The entrepreneurial spirit of the Chinese people is a major factor in the country’s achievements.
I continue to be impressed with the wide range of startups that are leveraging the power of digital technology to advance the economy.
The government has made several smart moves. The open-door policy has created a more positive environment for foreign investors, while the government’s plan to fund education has cultivated talent.
The country’s innovation strategy has also boosted numerous technology startups. The focus on raising food safety standards, and a commitment to environmental stewardship, are both starting to produce tangible results. What three words would you use to describe China today?
Committed. Confident. Innovative. China is showing a commitment to sustainable growth and is confident because its achievements have strengthened the country’s belief in a bright future. China is also becoming innovative after embracing technology and is leaping over legacy systems to drive new capabilities.
What are your impressions about major economic and industrial policies released during the 19th CPC National Congress?
It set the tone for China’s economic direction for the coming years, so it is very important. We were encouraged to see that China intends to become more open, with greater market access, especially in the service sector.
It also pledged to protect the legitimate rights and interests of foreign investors. But there were two things that particularly interested me.
First of all, China will speed up reforms for protecting and restoring the environment. From our perspective, by better managing resources, such as industrial water, businesses can reduce their environmental impact and improve health and safety.
They can also enhance operations and production efficiencies, maximize asset protection and reliability, and also reduce costs. Economic and environmental interests are mutually reinforcing.
Second, China will support a market-oriented system for technological innovation in which enterprises are the main players. We believe Ecolab can play an important role in driving innovation in China.
We have almost 30 years of leadership in utilizing remote monitoring, diagnostics and controls. And we have our third-largest research and development center, located in Shanghai, with approximately 100 scientists dedicated to new technology.
One example of innovation, which focuses on the Chinese market, is our work on UHT milk cleaning. We developed a special program utilizing Ecolab’s “surface energy-enhanced cleanin-place technology” and adapted the alkaline for ultrahigh-temperature surface treatment.
This helps customers save time cleaning and reduces water and energy consumption, which supports sustainability goals.
What is the biggest challenge China faces, and how can the country overcome it?
The biggest challenge for China is uneven development and the people’s ever-growing expectations for a better life. The aging population is one important trend facing the country and the rest of the world.
This demographic change will increase government pension and healthcare spending, as well as drive growth in the consumption of services and products for the elderly.
Another challenge is water scarcity. By 2030, there will be a huge water demand-and-supply gap of 199 billion cubic meters in China. Improving industry water efficiency is an important part of the solution.
We have seen, and will see more, joint efforts from government, academia, industry and the public in China to solve these challenges. The government has launched different policies to rebalance water resource consumption.
Ecolab has the expertise to help customers across nearly every industrial segment to consume less water and better manage its use. We have several pilot projects for improved industrial water treatment in China.
We have also been working closely with the government to share our knowledge.
What will China be like in five years, and what is the country’s long-term future?
I believe China will continue to play an important role on the international stage. With strong enforcement of its environmental policies, air quality will improve.
I also believe that China’s food safety standards will continue to rise to meet increased consumer expectations.
China is already considered one of the three mega-markets for Ecolab for its strategic significance. We are excited about the opportunities ahead. What is your impression of President Xi Jinping?
I think President Xi is a strong and dedicated leader. During the past few years, the world has witnessed many positive changes in China under his leadership.
The economy keeps growing faster than international expectations, a culture of innovation has been fostered, anti-corruption campaigns have been carried out and there is a growing commitment to protect and preserve the environment. How do you view China’s role in the world today?
There is significant growth in China’s international influence. The country is transforming from a regional power to an important international player. What is the most unforgettable experience you have had in China?
On my last visit, I was impressed with the fast-growing home meal delivery market. What has been built in such a short time is remarkable. For us, it is a great opportunity to think about how we can help scale and advance this growing segment of the food service industry.
I am also encouraged by the government’s determination to advance environmental protection. By issuing higher emission standards and reducing pollution from industrial manufacturing, China is working to balance environmental protection with sustained economic growth. Which sectors offer the most opportunities for development?
Our mission in the world and in China is to support cleaner water, safer food, abundant energy resources and healthy environments. We help our customers provide these benefits to society, while protecting and preserving the environment.
In China, we see a number of trends that are relevant to Ecolab’s expertise.
With a rising middle class, consumers are spending more on food and expect improved quality. So sanitation and hygiene in food manufacturing and food retail are big opportunities for us.
To support the booming online food delivery industry, we are partnering with Meituan Dianping to develop technologies that can better solve new food safety challenges.
China is also paying more attention to environmental protection and is enforcing regulations and standards. We have the capabilities to help customers from different industries comply with regulations and operate efficiently.
Another area concerns China’s aging population. This will generate more healthcare-related needs in the coming years. We see healthcare as a growth opportunity for Ecolab, and we are strengthening our ability to support high standards of cleanliness in healthcare environments.
Finally, China’s digitalization transformation and IoT (internet of things) development are accelerating. We believe that digital transformation influences not only our daily lives, but also how business gets done, particularly in the Chinese market.
As a digital leader, Ecolab will leverage technology to enhance customer value creation and provide a superior customer experience to grow our business in China.
What are the most innovative trends or products in China?
The biggest innovation trend is everyone is going digital. At Ecolab, we are working with our customers to install monitors and sensors that collect data 24/7 and transfer that information through the cloud for analysis.
This will generate comprehensive reports with recommendations. Customer service is greatly enhanced through digital technologies. It also improves the work experience for our associates. The impact of digital innovation is pervasive and overwhelmingly positive.
China is known as a global manufacturing giant, but what will the nation’s “calling card” be in the future?
I would say digitalization. China has an active digital investment and startup ecosystem. With the development of this technology and policy incentives, Chinese enterprises are gradually becoming leaders in their fields.
Today, China is among the top three in the world for venture-capital investment in key types of digital technology. One in three of the world’s unicorns (startups worth more than $1 billion) are Chinese. Many of them are expanding internationally.
I believe China has the potential to be at the forefront of the world’s digital frontier in the coming decades.
What opportunities will the Belt and Road Initiative provide for China and the rest of the world?
It will open up new opportunities in various fields, including trade, communications, tourism and investment. As China welcomes other participants to these projects, the resulting cooperation will support stability.
At Ecolab, we see great opportunities for our company through this initiative. Major infrastructure projects create demand for our capabilities in water, hygiene and energy technologies, as well as services that protect people and vital resources.
Visitors walk past the Ecolab Inc booth at an exhibition in the US city of Chicago.
Doug Baker, CEO of Ecolab Inc.