China Daily Global Edition (USA)
‘Dual circulation’ to boost growth
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.
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.
Construction of our first plants at our new Guangdong Verbund site in Zhanjiang is in 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 in 2020. Chemical production in China embarked on a V-shaped recovery path. A2 We produce close 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 highquality products and innovative solutions. We are certainly accelerating our pace to further invest in the China market. A5 China’s development has entered a phase of quality growth, which benefits innovative companies like BASF.
We are committed to fostering innovation in China by constantly enhancing our local research and development capabilities. Innovation Campus Shanghai, located in BASF Shanghai Pudong Innovation Park, is BASF’s global headquarters for Advanced Materials & 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 the Asia-Pacific region. A6 The new strategy emphasizes 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 property. As a multinational company with an extensive footprint in China, we have benefited from the government’s efforts in these policies in terms of simplified approval processes as well as widening market access. I believe this solid support will further boost BASF’s growth in the China market.
A1 China was the only major economy in the world to show positive growth in 2020 and Honeywell’s business has benefited from that momentum.
As it is our largest single market outside of 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. A3 We found the policies to ensure stability in foreign trade and foreign investment most appealing. In August, the State Council issued guidelines with 15 measures, including more favorable policies in encouraging overseas businesses 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 foreigncompanies 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 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 thanks to the close cooperation and support from the Wuhan government, even amid COVID-19. A4 In China, people from all walks of life are fully supporting the fight against the contagion. 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 global economic recovery. 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. COVID-19 further confirmed how important digital technologies are and also enhanced our customers’ understanding of their importance. A6 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, and 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 Michelin Group, the Chinese market has always been an important growth engine, which is particularly prominent during the pandemic.
Our business has proved to be quite resilient. We are also embracing digitalization to cope with the ever-changing market and seize more opportunities.
We are full of confidence in future development in 2021 and beyond. A2 Foreign companies are important players in dual circulation. Deeply rooted in China for more than three decades, Michelin has established deep connections with the Chinese market, mobility industry stakeholders and Chinese consumers. Michelin is an international brand, but we are a Chinese company in China, serving the Chinese market, satisfying consumers’ rapidly evolving demands with high-quality products and services. Foreign companies are also great beneficiaries of dual circulation. Promoting external circulation means that China will further open up and optimize its business environment. A3 We have deep feelings about “safeguarding the operations of market entities”. The vitality of market entities is the foundation of an entire economy. The government’s efforts have ensured the stability of the industrial and supply chains, 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. Thanks to a stable and safe external environment, Michelin was able to restart production at factories in China on Feb 10 and resume business growth in April. 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 consideration of development has moved from quantity to quality, which puts forward new requirements for companies on keeping pace with such transformation. Michelin will endeavor to bring scientificbased and technology-focused products and services to the China market. A6 Regarding the 14th Five-Year Plan period and 2035 long-term development goals, I have repeatedly seen a word: “people”. People are regarded as the most important criterion for the success of development.
I’m also drawn by the key direction — 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 Suez was affected by the pandemic during the first half of 2020. However, in China, we’ve now largely recovered from this slump, thanks to the Chinese authorities’ quick reaction and effective measures. 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 like Suez with more opportunities to introduce our global expertise and solutions to support China in reaching its ambitious environmental goals. A3 Among these, major interests for Suez include endeavoring to have carbon dioxide emissions peak before 2030, achieving carbon neutrality before 2060 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-19, 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. A5 China is about to embark on its 14th FiveYear Plan — 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 like Suez will play an important role in promoting green transformation and driving sustainable, healthy economic development. A6 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 development opportunities.
The technologies and experience we have within the Suez Group are very much aligned to meet all these ambitions and to support China in achieving its growth goals.
A1 In 2020, the world economy and social order had seen great turbulence due to COVID-19. Through prevention and control measures at the early stage of the pandemic, the Chinese economy is showing positive signs of recovery.
During the pandemic, we continued to work, diligently serving customers and providing the market with essential materials necessary to fight 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 quarters, 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 potential.
The growing domestic market will further accelerate Dow’s growth strategy in this market. Meanwhile, Dow will continue to introduce its latest innovations to China. Further opening-up of 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 lives were essential to ensure the economic and social stability of China. Dow has benefited from a series of policies which lessen our burden during the pandemic, for example the reduced social security fee payout rate. 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. A4 China’s effective and successful control of the COVID-19 pandemic domestically and restoration of business activities nationwide contributed to its V-shaped economic recovery since late in the first quarter in 2020. 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 workforce in other countries and regions. A6 Each five-year plan provides business communities and international companies who operate in China with comprehensive guidance of development strategy and focuses in China. In addition to its emphasis on domestic market development, we are interested in the strategic industries that the plan spotlights, such as new materials, new energy and highend 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 Our long-standing and strategic relationship with China as well as our presence in the country are core to Eurasian Resources Group’s business.
Despite the COVID-19 pandemic and its disruptive effects on the international supply chain, our business in China continues to achieve strong results. 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. The internal circulation side focuses on improving manufacturing, developing the transition to a services-based economy and promoting new infrastructure projects, which entail significant demand for our products. 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 Among the “Six Safeguards and Six Priorities”, ensuring and promoting stability in foreign investment, international trade, supply chains and other fields has further created an attractive and reliable business environment. 2020 had been a challenging year. The rapid resumption of our operations in China and the progress of ERG’s trade and cooperation could not have been 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. 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 rollout of new infrastructure is also driving the rapid development of related industries in China. A6 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 developing industries including new energy vehicles, along with new infrastructure projects and construction, including 5G and electric vehicle charging stations. These will all further drive our sales of copper, cobalt and other products to the country.