Dual-circulation, tech spur 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.

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: 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?

Zhu Wei, chairman of Accenture in China

A1 China is a key strategic market for Accenture. It is home to many excellent enterprises, as well as the most important market for many of our clients. Accenture has been operating in China for over 30 years with 17,000 people servicing clients across the country. We will continue to invest in our people and business in the market and develop deep local expertise and ecosystem partnerships.

A2 With the fast-growing digital economy in China, we believe the dualcirculation strategy presents good opportunities for companies to prioritize agile innovation, unlock the potential of digital technologies and adapt to challenging business environment.

A3

China’s actions to stabilize foreign investment and the related positive changes have brought vitality to China’s economy. In the face of global economic uncertainties, we’ve seen Chinese companies actively explore digital technologies and accelerate their transformation. The further opening-up of trade, investment and technology allows companies to turn their innovative ideas into reality.

A4

The speed with which China has mitigated the impact of COVID-19 — from finding the outbreak to containment and then the resumption of commercial operations and the bolstering of business vitality — is unprecedented. Digital business models and new technologies have been playing an important role in the nation’s success in safeguarding people’s livelihood. With China’s quick recovery, Accenture is also pivoting rapidly from maintaining uninterrupted operations to staying relevant to clients by actively exerting our industrial capabilities and contributing our tailor-made digital solutions to address pressing digital transformation needs of local businesses from various industries.

A5

In the new development stage, digital technology has become a key driver behind China’s high-quality growth. With the digital economy growing fast in China, companies with topnotch digital maturity can better manage risks and navigate market changes. When applying new technologies, Chinese companies should build up digital proficiency across their core business and processes.

A6

As a key priority in China’s 14th Five-Year Plan, the dual-circulation strategy aims to boost technological innovation, globalize Chinese enterprises and stimulate domestic demand. According to Accenture’s economic model, China could unlock $1.9 trillion in new economic value in 2030 with new technologies and unchained innovation. Accenture is bringing more innovation to the business and technology ecosystems and helping Chinese enterprises to embrace digitalization and enhance global competitiveness to succeed in the new era.

Mark Wang, president and CEO of HSBC Bank (China) Co Ltd

A1

China is at the heart of HSBC’s growth strategy. As the world’s second largest economy and largest goods trader, the continuous opening-up of its markets and its economic resilience amid the ongoing COVID-19 pandemic make China one of the most important markets for international businesses and it remains a global supply chain hub.

A2 The new development pattern is not closed domestic circulation, but open domestic and international dual-circulation. It takes the domestic market as the mainstay while letting domestic and foreign markets boost each other.

As a leading international bank with a global network covering 90 percent of the world’s trade and capital flows, our ability to connect China with the global economy and bring international businesses and investors to China enables us to make a unique contribution to building the new development pattern.

A3 For international business, the commitment to ensuring stability in foreign trade, foreign investment and maintaining stable industrial and supply chains is most encouraging. It is a clear signal that China won’t stop opening up its domestic market, which has further boosted the confidence of global investors.

We believe China will continue to be among the top destinations for global investors and further engage with other economies through deeper trade and investment ties. These will create huge business opportunities for international financial institutions such as HSBC.

A5

In our view, China’s new development stage is to build an open economy with higher standards and better quality.

Under the new development pattern, we expect the government to further unleash domestic demand through structural reforms to boost private investment, support indigenous innovation and lift productivity growth, while continuously opening up its economy.

In addition to bridging international business with China opportunities, we have also striven to support China’s economic transformation and sustainable development.

A6

The 14th Five-Year Plan guidance lists fostering high-quality growth, enhancing innovation and improving domestic demand as top policy priorities for the next five years. It highlighted several key perspectives in China’s financial reforms in the next five years, including expanding direct financing through capital market reforms and financial opening-up, and deepening reforms in the banking sector to better support the real economy. China’s further openingup can go a long way to attract more foreign companies in the years ahead. We will continue to leverage that to help customers connect with opportunities in China.

Honson To, chairman, KPMG China and Asia-Pacific

A1

In the financial year ending September, KPMG Asia-Pacific was the fastest-growing region in our network, delivering positive growth. This is particularly notable as we had been hit by COVID-19 earlier than other regions but managed to come back and deliver credible results. The center of gravity is shifting to the Asia-Pacific region, and as we all can see, China is playing an important role in underlying the strong regional performance. KPMG China continued to expand its presence in China in 2020 by opening offices in Jinan, Ningbo, Suzhou and Hefei.

A2

First, China has a large and rapidly growing domestic market. Second, innovation is the key driver for China’s high-quality growth and the future of a digital economy. Third, dual circulation doesn’t mean China will be cut off from the global economy. Instead, we see international collaboration critical for China’s development.

A3

The “Six Safeguards and Six Priorities” directive has increased efforts to stabilize foreign trade and foreign investment, which had aided the development of foreign companies, including KPMG, in China during the hard times of 2020.

Notable measures in this area include facilitating the resumption of production by foreign trade enterprises and reducing compliance costs, strengthening support for export credit insurance and trade financing.

A4

As China made positive progress in fighting COVID-19, at the same time it has promoted the resumption of work and production in an orderly manner. These policies have greatly helped our business recovery and contributed to the recovery of the global economy and industrial chains, representing the key reason why KPMG Asia Pacific was the fastest growing region in our network.

A5

For KPMG, it is worth building a new development pattern under the guidance of the new development philosophy. Instead of just talking about business issues, we made a conscious decision that we would begin from a position of empathy. We listened to concerns — personal and professional — of those in our communities and have now deepened our relationships.

A6

China’s 14th Five-Year Plan guidance has a strong future orientation. Major tasks of the plan are all geared toward implementing the new development philosophy of innovation, coordination, “green”, openness and sharing. The regional development strategy, incorporated in the plan, will help unlock China’s consumption potential, play an important role in medium and long-term economic growth and social stability and enhance the power of economic internal circulation.

Joost Vlaanderen, president of Mondelez in China

A1

China is an important growth engine for Mondelez International. With faster growth than our global average, China is playing an increasingly important role. For example, as of the third quarter last year, Mondelez China had achieved growth for 11 consecutive quarters.

A2

Mondelez has been proactively taking part in China’s economic growth and benefited from policy support. This reinforces our confidence in China and encourages us to keep investing in this market. In a dual-circulation economy, Mondelez will strive to capture the opportunities of digitalization and industry upgrading. We will also collaborate with our partners to unleash the full potential of the domestic market.

A3

During COVID-19, the government firmly supported foreign companies to resume operations and facilitate foreign trade. Because of these, Mondelez became one of the earliest foreign companies to resume operations. This enabled Mondelez to seize opportunities during this difficult time and keep navigating the emerging consumer trends throughout the pandemic to meet the needs of Chinese consumers.

A4

China provides a very good example for the world. In the early stage of the pandemic, our local operations were affected, but we managed to quickly recover thanks to the efficient control measures and timely supportive policies of the government. So far, Mondelez China has seen zero infections. Our effective control measures and rapid recovery also provided the best practice to Mondelez worldwide.

A5

In 2020, China achieved remarkable accomplishments in poverty alleviation, and decided to better implement the rural revitalization strategy nationwide during the 14th Five-Year Plan period. We can see the changing needs of Chinese consumers to be of high-end, high-quality, personalized and diversified. This will create new growth opportunities and areas for Mondelez. We are confident in China, and will continue to invest and expand our footprint in China.

A6

We found both China’s 14th Five-Year Plan and 2035 long-term development goals demonstrate that China sets clearer visionary goals for a bright future. It will accelerate the modernization progress and build a harmonious and sustainable environment based on a people-oriented principle. We are encouraged by the highlights such as strengthening IPR protections and the increasing importance of sustainability. In Mondelez, we are driven by our purpose for a bright future where people and the planet can thrive together. We will continue to generate a sustainable impact on our consumers by providing the right snack, for the right moment, made in the right way.

Justin Sargent, president of Nielsen China

A1

Nielsen’s business operations in China have already returned to normal, and we are working closely with our clients to help them fit to win in the volatile market by providing insightful data and analysis. To grow business in China is an important part of Nielsen’s global strategy and our China operations are of great importance to Nielsen’s overall performance.

A2

We understand the essence of dual circulation is not “closing the door” but further “opening up”. Through unlocking domestic consumption potential, protecting intellectual property rights, improving the business environment and reducing foreign investment access restrictions, China intends to attract more multinational companies to keep and expand their business in China and share the cake of China’s consumption market.

A3

The Chinese government’s efforts to ensure six priorities and stability in six areas have played a positive role in promoting China’s economic and market recovery after the COVID-19 outbreak. Among these policies, we think “stabilizing foreign investment” and “safeguarding market entities” are most conducive to our development in China amid the global economic uncertainties.

A4

Since the coming of the virus, China’s experience in fighting against the disease has been a barometer for the world. China also leads the world in the pace of economic and consumption recovery. All of these prove the advantages of China’s economic development model.

With the government’s great support, Nielsen combated COVID-19 with resilience. During the outbreak, Nielsen received support from the government including material supply and financial support. Shanghai’s Changning district Bureau of Commerce donated 1,200 masks to Nielsen China during the COVID-19 peak period.

A5

We believe as China enters a “new development stage”, it will bring more “China opportunities” to the whole world.

We also believe that China will create a fairer, more transparent and predictable business environment in the future, and that with the further development of China’s economy and consumption market, there will be huge opportunities waiting for us.

A6

China’s 14th Five-Year Plan guidance and the country’s 2035 longterm development goal spell out a grand blueprint for China’s economic and social development in the future. They cover many aspects. Among them we are most looking forward to innovation, domestic market opportunities and openingup. Nielsen will accelerate the pace of innovation, adjust its strategy in a timely manner to adapt to the dynamic market and serve emerging client needs.

Jerry Zhang, CEO of Standard Chartered Bank (China) Ltd

A1

We delivered a resilient performance, both operationally and financially, in 2020. As of the end of the third quarter in 2020, Standard Chartered China had achieved both income and operating profit growth, and we remained the largest contributor to the network income of our group.

China is a strategically important and top priority market for Standard Chartered. We have a longterm commitment to China, and we are among international banks with the most comprehensive licenses.

A2

With this new pattern, China will continue its opening-up, and facilitating and enhancing trade and investment with other countries. The recently launched Regional Comprehensive Economic Partnership, which was joined by China and 14 other nations, is a good case in point.

We are well-positioned to connect domestic and international circulation and promote dual-circulation in a range of areas.

A3

China’s effective pandemic control has led to a quick V-shaped economic recovery in the second quarter last year, paving the way for the sustained recovery in the second half on normalization of both industrial and services activities.

China prioritized employment and implemented effective policies to restore businesses, which helped the unemployment rate decline to 5.3 percent in October from 6.2 percent in February. The central bank’s quarterly depositor survey suggests that households’ income and employment expectations improved in the third quarter.

A5

Developing a strong domestic market is the cornerstone of the new development approach. New focus will be on promoting consumption, improving the supply-chain and industrial modernization, and expanding room for investment.

We are well-positioned to support clients in, from and into China, by focusing on the sweet spot of our unique strength and expertise as well as economic development priorities of China as it enters a new era of development.

A6

China is committed to promoting green and sustainable development of the society and the economy, in which we believe green finance will play a vital role.

China will also continue promoting further opening-up and steadily improving renminbi internationalization, which provides a huge opportunity for our bank as well. We could play an even bigger role by working with our clients and peers to continue promoting and facilitating the cross-border usage of the renminbi. We are also a leading international bank with an extensive branch network in the Guangdong-Hong Kong-Macao Greater Bay Area, and committed to delivering borderless client experience and connectivity across the GBA region and beyond through innovation.