ABB banks on China’s upgrade, innovation
Swiss industrial giant has localized entire value chain
Please use three phrases to describe China’s changes in the past 40 years.
Innovation-driven development, science and technology, and entrepreneurship.
In the past four decades, China has made historic achievements in both economic and social development thanks to the reform and opening-up policy. The country now has a much more robust technological foundation, complete industrial system, vast market, abundant human resources, and dynamic entrepreneurs and innovators.
In the global race for scientific and technological innovation, China has shifted from following others to keeping pace and even leading the pack in more and more areas, becoming recognized globally as a fertile ground for innovation and business ventures.
Focused on fostering new growth drivers to speed up economic structural upgrading, China has the ability and conditions to achieve higher quality, more efficient, fairer and more sustainable development.
What are the biggest achievements in China since the adoption of the reform and opening-up policy 40 years ago?
Over the past 40 years, the Chinese economy has under139 gone dramatic changes. Forty years ago, China’s GDP per capita was merely $384. By the end of 2017, that figure had skyrocketed to $9,281.
Reform, powered by imported and domestic scientific and technological innovations, is moving up the country’s value chain, increasing productivity and improving people’s quality of life. The rapid upgrade of infrastructure serves to boost the economy and balance regional development, while also backing poverty alleviation efforts. Meanwhile, data-enabled, real-time responsive, globally connected e-commerce is now reshaping Chinese people’s lives, benefiting even the most remote areas of the country.
Innovation is the new momentum for China’s sustainable development in the long run, as China pledges to transform its development model from speed to quality and from big to strong.
How has your company benefited from the reform and opening-up policy?
As a participant, witness and beneficiary of China’s 40 years of reform and openingup, ABB has been continuously following national strategies and closely connecting itself with China’s development agenda. Many of ABB’s milestones in the country accompany important ones in the reform and opening-up timeline.
After decades of fast development, ABB has a full range of business activities in China, including research and development, manufacturing, sales and services. Today, ABB has 17,000 employees located in cities, 40 local companies, and online and offline channels across more than 300 cities. China has remained as ABB’s second-largest market worldwide.
In the past four decades, ABB has actively supported China’s industrial transformation and upgrading, and the construction of key projects, such as the West-to-East power transmission project, the South-to-North water diversion project, and the West-toEast natural gas transmission project.
Has competition intensified between your company and Chinese companies?
Valuing a win-win philosophy, ABB pledges to become the partner of choice in the Chinese market. We have realized the localization of the whole value chain in China, with a full range of business activities including R&D, manufacturing, engineering, sales and services.
Meanwhile, ABB has been providing one-stop services, including consultancy, design and engineering for a growing number of Chinese companies on their overseas projects. Leveraging the advantages of a global footprint, a wide ranging portfolio and high quality, ABB helps Chinese companies to solve problems thus lowering project costs and risks.
How do you view China’s role in the world today?
China’s development is closely connected with that of all other countries. I am glad to see that it is becoming more and more actively involved in reforming and improving global governance, and striving to make the global economy more open.
In China, many disruptive technologies have emerged and thrived, such as 5G, ICT, big data, cloud computing and artificial intelligence. The country is also now the largest as well as the fastest-growing robotics market.
With the rapid development of innovative technologies in China and the huge amount of data originating from its large and broad economy, the country will play an increasingly important role in the world along with the progress of the fourth industrial revolution.
With China generating abundant opportunities for engineering procurement construction, President Xi Jinping has called for “a community of shared destiny”. The Belt and Road Initiative conveys the idea of engaging with China on mutually beneficial terms.
Could China’s experiences and practices be used to solve global problems?
China has led the world in many fields. Given its huge economic scale and strong impetus for reform and development, it has more and more solid experience and practices that can be shared with other countries.
For example, China’s environmental practices are valuable and adaptable for global sustainable development. The country has the largest electric vehicle user base in the world and has become the fifth nation to announce the gradual phasing out of fossil fuel vehicles.
The government is heavily promoting the adoption of emission-free electric vehicles combined with renewable energy generation.
What measures are needed if China wants to deepen reforms?
In the past five years, China’s reform drive has made many breakthroughs in key areas, thanks to the launch of more than 1,500 reform measures, including supply-side reform, State-owned enterprise reform, market access widening, government administration streamlining, and financial, fiscal and taxation reform, among many others.
We expect more reforms to help improve the business environment, which will unlock productivity and increase competitiveness — for example, developing government information system connectivity and connecting information islands.
To compete and succeed on a global scale, connectivity and the free flow of data will be critical. Intelligent communication processes and systems will further foster innovation, and enable organizations and enterprises to capitalize on global digitalization trends.
Apart from economic development, what progress in other fields have you witnessed in China in the past 40 years?
Apart from economic development, China has opened up for trade and foreign investment, liberalized prices, diversified ownership, strengthened property rights, kept inflation under control, and maintained high savings and investment.
China is making great efforts in pushing innovation forward. It is now turning from a follower into a leader in the global innovation arena. In the past five years, China’s investment in research and development has grown at an average annual rate of 11 percent, ranking No 2 in the world in scale.
The contribution of technological advances to economic growth has risen from 52.2 percent to 57.5 percent.