Harnessing the power of digital technology
Elevator maker Otis China has increased R&D investment to accelerate the development of innovative products
What progress has China made in streamlining government functions to raise efficiency?
We have seen China’s determination and efforts to raise efficiency in recent years, especially in streamlining administration and delegating powers to optimize the business environment. Eliminating dispensable approvals, reducing the time needed for reviewing project applications, easing previous investment approval procedures and improving access to government services by setting up more e-platforms are all practical examples. Most recently, the reform of special equipment regulations is a good example. In addition, China is acting to further cut taxes and fees. VAT reduction in 2018 benefited both manufacturers and customers. I have noticed that China plans to lower more taxes and fees in the manufacturing field and further open up this sector in 2019.
These significant changes have demonstrated China’s commitment to relieve businesses’ burdens, ease market access and encourage investment by removing administrative obstacles and create a market of fair competition.
How has ongoing supply-side reform changed the nation’s economic growth and your company’s business in China?
As the ongoing supply-side reform carries forward, tertiary industry keeps developing and technological innovation accelerates. The focus of China’s economy is shifting from high growth to high quality, and reforms provide a new momentum for growth. Manufacturing and services, as indispensable parts of the country’s economy, are also transforming to promote high-end products and technologies.
For Otis, we also benefit from supply-side reform as it is setting the demand and direction for the application of intelligent technology. In the past two years, Otis has embarked on a major digital transformation and smart manufacturing.
What’s your view of China’s policy on foreign enterprises and foreign investment? How can the country further improve its business environment for foreign investors?
We have seen China’s commitment to further opening-up, especially to increase access to the service and industrial sectors and relax restrictions on foreign ownership. These supportive policies will create a more attractive environment for foreign investment.
Otis established its business in China in the early 1980s, growing with and supporting industry along the way.
How has innovation changed China’s economic development and your company’s business in China?
China’s economy has enjoyed rapid and sustained growth after 40 years of economic reform and opening-up. Innovation is undoubtedly the major force driving it. The world has seen the country’s innovative capacity. China is perceived as one of the most friendly markets to deploy new technologies with an amazing pace of development.
Innovation is essential for Otis and is in our DNA. In China, we have increased R&D investment to accelerate the development of innovative products for our customers and address some underserved market segments. As part of the Otis global R&D network, we inaugurated our new Otis Lead Design Center in Shanghai last year. It is home to some 600 engineers with advanced labs, and it develops products and technologies for China and other markets overseas.
What measures should be taken if the country wants to further open up to the outside world?
With the country’s economy shift from high-speed growth to highquality development, China’s opening-up has entered a new phase, seeking a larger scale and a deeper level. The fundamental requirement for any business or investors is transparent regulation and rule of law. It is so critical to build up a healthy and sustainable business environment in order to demonstrate opening-up rather than any promotion or incentives.
What’s your suggestion for China to achieve more sufficient and sustainable economic development?
To strengthen innovation, enhance product and service quality, establish a healthy business environment for fair competition, and grow the economy through market growth.
What role has your company’s business in China played for global business during the years of development in the Chinese market?
Undoubtedly, Otis’ business in China has played an indispensable role during the years of development. Otis installed the first elevator in China in the early 20th century. For nearly a hundred years of development, Otis China has been providing quality high-value products and good maintenance services to its customers. Here we have our largest country footprint with about 15,000 employees, five factories and nearly 200 regional branch offices. In China, Otis has established a High-Rise Contracts & Logistics Center, which supports our major high rise and infrastructure projects around the world, as well as the Lead Design Center, developing products and technologies for markets globally.
What experience can you share with other foreign companies for their developments in the Chinese market?
Within China, rapid urbanization, rising incomes and an increasingly open business environment have all created an increasingly attractive market for foreign companies. The Chinese market offers enormous opportunities while presenting challenges uniquely distinct from any other market.
Whether it is the large multinationals with an established China presence or first-time market entrants with no previous China experience, foreign companies should always be prepared to adapt to the market and evolve with changes.