China Daily Global Edition (USA)
Execs optimistic about China’s growth
Editor's Note: Despite global uncertainties and the lingering economic downturn caused by the COVID-19 pandemic, China plans to achieve GDP growth of over 6 percent, create new urban jobs and reduce energy consumption as it enters the 14th Five-Year Plan (2021-25) period this year. China Daily spoke to senior executives from multinational corporations to get their views on key macroeconomic policies, potential growth opportunities, and how their businesses can benefit from and contribute to a more prosperous China.
Q1: China has embarked on a “new development stage”, according to government officials. Do you anticipate any significant changes to your strategy in the country in the long run as a result of the change?
Q2: What are the key takeaways for your company from the 14th Five-Year Plan and the 2035 long-term development goal? How will your company adapt to China’s new growth paradigm?
Q3: What are your views on China’s plan to achieve self-sufficiency in key technologies? Do you see your company playing a key role in fostering healthy international cooperation and in supporting the country’s indigenous research and development efforts?
Q4: What are your views on the new opening-up initiatives like the updated negative list in free trade zones and the steps to boost foreign investment and economic recovery?
Q5: China has announced an ambitious goal of achieving carbon neutrality by 2060. Do you think these goals are in line with your sustainable development strategy and how does your company plan to support the country’s efforts?
A1
If the rapid growth of China’s economy in the past 40 years mainly resulted from the benefits of the transition from a planned economy to a market economy, then for the years to come, it is a new consensus that the medium and high-speed growth of China’s economy will mainly rely on efficiency improvements brought by technological innovations. In the next 10 years, autonomous driving, machine translation, biological computing, deep learning frameworks, digital city operations, knowledge management, artificial intelligence chips and personal intelligent assistants will undergo a transformation from quantitative change to qualitative change.
A2
The industrial revolution, innovation and efficiency have been an important driving force for the development of the world economy and the improvement of human life. Now the world is welcoming a new “innovation dividend period”, and the intelligent economy driven by artificial intelligence will become one of the new engines of economic development.
A3
Basic research is the source of technological innovation. Although China’s basic research has made remarkable progress, there are still some gaps between that and the advanced international level. The research and development of AI technology needs long-term persistence, and its commercial value cannot be reflected in just a few years. It requires technical personnel to be ambitious, patient, able to bear loneliness and have a firm belief that they must master this technology.
Baidu is the first enterprise in China to fully invest in an AI strategy. We have maintained high investment in technology for a long time. In 2020, Baidu’s R&D expenses accounted for 21.4 percent of its revenue, and its R&D investment intensity is at the forefront of China’s large-scale internet technology companies.
A5
With the acceleration of industrialization and urbanization, and the continuous increase of car ownership and travel demand in China, the total amount of carbon emissions in the transportation sector is expected to continue to rise. The rapid development of new technologies such as AI has greatly enhanced the potential for emissions reductions in the transportation sector.
The early realization of largescale commercialization of autonomous driving is conducive to reducing the carbon intensity of transportation. After years of R&D, the safety of autonomous driving has been preliminarily verified. Large-scale commercial use of autonomous driving will greatly change the mode of urban transportation, and make green and efficient unmanned public transportation replace private cars as the preferred choice for civilians to travel.
A1
Among the goals related to this new development stage, we are particularly impressed by the Chinese government’s specific requirements for the establishment of a modernized economic system, an increase in the nation’s innovation capabilities and sustainable development.
As one of the leaders in 5G, Ericsson will continue to participate in the construction of China’s 5G network by applying its advanced 5G technology, products, solutions, services and industry experience. We will work together with telecom operators to build better 5G networks, drive innovative applications of 5G in thousands of industries and provide a better network experience for individual users and businesses.
A2
The 14th Five-Year Plan and 2030 Sustainable Development Goals include new targets for economic development, bold steps in reform and opening-up and new progress in building an ecological civilization, which inspires great confidence and excitement.
Looking back on 129 years of development in the Chinese market, Ericsson is the only communications technology company to have participated in the construction of China’s telecommunications infrastructure from 1G to 5G. Time has proved that Ericsson is a partner that China can trust. In the future, we will continue this tradition.
A3
China’s ambition for self-sufficiency as the world’s second-largest economy is to be admired and recognized by the global community. Ericsson has always advocated free trade and embraces open competition and cooperation. We will be committed to working with our Chinese friends and partners in promoting innovation, development and progress in the field of communications technology.
A4
In addition to introducing the new FTZ Negative List, the Chinese government also enacted a series of initiatives and policies in 2020 that are aimed at further opening-up and encouraging foreign investment. For example, both the implementation of the Foreign Investment Law and the establishment of the dual-circulation development paradigm made significant contributions to boosting the recovery of both the Chinese economy and the global economy, while also increasing foreign investor confidence and protecting their interests in China.
A5
The COVID-19 pandemic has affected us all, and it has highlighted that we all share the same planet and face the same global challenges. We agree that all sectors of society have a role to play in sustainable development. In this regard, Ericsson is a founding member of the 1.5°C Supply Chain Leaders — a new initiative that unites major multinational corporations to drive exponential climate action across global supply chains.
A1
With the majority of the world still challenged by COVID-19, China has started recovering from the impact of the pandemic quite impressively, leveraging technology and embracing new business and engagement models to become the only major economy to grow, according to the IMF. This indicates a certain resiliency and sustainability of the China market.
Microsoft will actively participate in and support economic development, technological innovation and talent exchange in China. We have unwavering confidence in China’s future development and we are committed to serving the China market and customers here.
A2
We are encouraged that the 14th FiveYear Plan continues to advance “Innovation Driven Development”. Microsoft believes that accelerating the digital transformation process and building business resilience will be essential to the survival and growth of enterprises in the future, whether Chinese or global.
Microsoft has started a new round of investment in China, from introducing new products, deploying new technologies and services, further improving our local R&D of innovative technologies and cultivating local talent. We unveiled a road map to further expand our cloud infrastructure and ecosystem investments in China with a new data center region in China to meet customer demand.
A3
In the early stage of the COVID-19 outbreak, the fast adoption of remote technology and application scenarios in China provided many great examples of “innovation-driven development”. With the continuous impact and uncertainty around the contagion, Microsoft believes that accelerating digital transformation and enterprise resilience will remain essential to the future and the development of both Chinese and global enterprises. The innovation that these enterprises will create will continue to serve as global models and marketable solutions for the world.
A4
Updating negative lists in FTZs and foreign investment helps fulfill China’s ambition to open the economy in a broader scope of fields and to a greater depth. This will encourage confidence among foreign enterprises and encourage investment into China, strengthening China’s competitive advantage and ultimately benefit China’s economic recovery.
A5
In 2020, Microsoft committed to becoming carbonnegative as a company by 2030 and to removing all of its historical carbon emissions from the atmosphere by 2050.
We are thrilled to see that the Chinese government places such great importance on sustainable development and we are looking forward to harnessing the power of technology and innovation to help build a more sustainable future.
A1
The 14th Five-Year Plan has proposed to expedite the construction of a new development pattern of dual circulation. As a representative of global enterprises benefiting from China’s “Going Global” strategy, Lenovo seeks to seize opportunities from the economic cycle and technological revolution over its course of development. On one hand, we will make use of “domestic circulation” to consolidate the foundation of development and safeguard and lead our development with the growth of the Chinese market. On the other hand, we will promote “Made in China” with innovative products, employ Chinese factories to manufacture products as we get orders from the global market.
A2
I am especially looking forward to “persisting in innovation-driven development and speeding up the development of the modern industrial system” in the development goal of the 14th Five-Year Plan.
In my view, we need to speed up the deep integration of the digital economy and the real economy and promote “Made in China” to realize industrial upgrade, which depends on the support and empowerment of “New IT” infrastructure. However, “IT” is no longer traditional information technology, but intelligent transformation.
A3
The key to laying a solid foundation for key core technologies lies in effectively enhancing independent innovation capability, improving China’s scientific and technological innovation system and advancing the entire chain layout from basic research, applied research and technological R&D to industrialization.
Enterprises are not only the fresh force of innovation, but also the users and beneficiaries of innovative achievements. As far as Lenovo is concerned, the integration of production, education and research plays a great role in our innovation system. Lenovo has set up 17 R&D bases across the world, staffed with more than 10,000 R&D personnel and engineers. Every year we invest more than 10 billion yuan ($1.53 billion) in the R&D of new technologies.
A5
Lenovo is a company that attaches great importance to sustainable development. Last year, we beat our previously set sustainable development goals. Compared with data from the 2009-10 fiscal year, Lenovo has reduced its greenhouse gas emissions by 92 percent in all businesses in the 2019-20 fiscal year.
On this basis, Lenovo has proposed new targets for the 2029-30 fiscal year — by 2030, a 50 percent reduction in the company’s operational direct and indirect carbon emissions, and a 25 percent reduction in the carbon emission intensity of some value chains. Lenovo is constantly reassessing its sustainable development projects, exploring the possibility of achieving the goal of net zero emissions by 2050 and making greater contributions to battling global climate change.
A1
China has entered a new development stage in 2021. Qualcomm is fully prepared to embrace the new opportunities ahead. First, China is advancing a new development pattern featuring dual circulation. As a connector of the two circles, Qualcomm continues working with our Chinese partners to develop both overseas and domestic markets. Second, technological innovation is emerging as a new driver of future development. With the advent of information and communication technology, including 5G, artificial intelligence and internet of things, more opportunities are expected for us to achieve win-win outcomes with the Chinese ecosystem.
A2
China’s 14th FiveYear Plan and 2035 long-term development goals are prioritizing the development of strategic emerging industries, and we believe the next generation information and communications technology led by 5G will drive future growth in those industries. 5G will become a powerful engine for China’s innovation-driven development. We feel strongly that the Chinese government’s prioritization of digital infrastructure, in particular 5G, will create significant opportunities for Qualcomm to foster more innovations and business success.
A3
The commitment of China and other major countries to technological innovation contributes significantly to human progress and social development. We believe that indigenous innovation and international collaboration complement each other, which helps China gain from the world’s leading technologies, while at the same time enables China to benefit the rest of the world through its achievements.
A4
Qualcomm has witnessed, actively participated in and continuously contributed to China’s opening-up. We are deeply impressed by how determined China is to foster a world-class business environment. Over the last two decades, China’s opening-up initiatives have created broad opportunities and promising prospects for Qualcomm’s local development and ecosystem collaborations. China’s commitment to promote higher-level openingup and strengthen intellectual property rights protection will attract more foreign investment and encourage more Chinese companies to go global.
A5
China has made remarkable progress in environmental protection and sustainable development. Qualcomm also successfully met or exceeded its 2020 corporate responsibility goals. As we look forward, we have established 2025 quantitative targets for corporate responsibilities. Among these, we will continue to address and improve our environmental performance through greenhouse gas reduction strategies and to reduce power consumption.
A1
The year 2020 was a turning point for China and its position in the world. It successfully brought the COVID-19 pandemic under control domestically, adopted a new concept of dual circulation, succeeded in its fight against poverty and also maintained and expanded its position as the world’s manufacturing and export powerhouse.
China didn’t set a growth target in the 14th Five-Year Plan and announced less binding objectives, which reflects the uncertainty in a world still dominated by the pandemic. De-emphasizing growth is emblematic of the new course toward more qualitative development focused on catching up in key technologies and reducing dependency on foreign patents and industries.
A2
The 14th Five-Year Plan aims for an 18 percent reduction in carbon emission intensity of GDP growth over the period. The plan is setting a more ambitious objective, which will affect the way every industrial and commercial facility is planning its operations in the next five years.
Given the vast quantities of coal that China is starting with, carbon capture and storage are highlighted as key technologies that China must pioneer to meet its objectives. Along with hydrogen energy, we can expect that China will take the lead in piloting, demonstrating and hopefully making some innovations commercially and industrially viable.
A3
The advantages of a planned economy are clear — determined establishment of new R&D platforms and laboratories, increased collaboration between public research and SOEs and accelerated development of 5G infrastructure to enable faster development of use.
While the focus on developing indigenous technologies might sound controversial internationally, it should on the contrary create new opportunities for investment in China to support this new phase of development.
A4
For the last few years, the free trade zone negative lists have continuously been reduced, which further opened up new sectors for investment. In FTZs, the reduction of items has always served as a gateway for a more general opening. Therefore any signal of new trials is positive, and is interpreted as such by foreign investors. The resilience of the Chinese supply base in 2020, the strong recovery of the Chinese market and its strong growth prospects encourage further investment in China.
A5
We expect a more precise agenda for the execution of this pledge in the coming years, while the 14th FiveYear Plan already has set a slightly more ambitious energy intensity reduction objective. We believe that China’s pledge will play a major role, domestically and internationally, in innovation to meet its objectives.