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  • Home > News > Details
    Foreign firms have high expectations
    2014-03-07

    Editor's Note: The world's attention is again focused on China as it convenes the annual full sessions of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference.

    The full sessions of the top legislature and the top political advisory body are held to discuss and adopt policies to deliver the wide-ranging reform promises made during the Third Plenum of the 18th Central Committee of the Communist Party of China in November last year.

    As a major economic force in the China market, multinational companies attach great importance to the annual "two sessions", where policy priorities and targets for the year are set. Over the years, the "two sessions" have successfully navigated the development of China, which is not only very important to the country itself but also matters to the world. China Daily interviewed executives from global businesses operating in China to get their opinions and ideas.

    A1 China's economy has grown rapidly, with per capita GDP (at current prices) rising from about $1,300 in 2003 to $6,600 in 2013.

    With accumulated wealth, problems like environmental pollution and waste of resources have also inevitably escalated. China is further deepening its reform and will continue to open up.

    We are delighted to see that recently, the Chinese government has carried out further decentralization.

    The State Council has canceled or decentralized more than 300 administrative approval items, thereby optimizing the business environment.

    In addition, the market is set to play a "decisive" role in allocating resources in the economy, which will boost competition and economic efficiency.

    These reforms are meant to promote a stronger orientation toward the market and to remodel the relationship between the government and industry.

    These measures will have a profound influence on ensuring continued stable, sustainable economic development.

    A2 At Bayer, we believe in the saying "Science for a Better Life". Our innovative solutions address some of China's core challenges, such as universal health care coverage, safe and healthy food for all, solutions for an efficient infrastructure and tackling the climate change.

    With our knowledge and experience, we are in a position to help China accomplish some of its main long-term objectives to grow economically, in a profitable yet sustainable way, as well as to rebalance the economy.

    Intellectual property protection is also often discussed, but it's a necessary condition to bring latest technology and innovation into the chain. Finding proper protection for the innovator is of most importance for developing an R D-oriented culture.

    A3 Bayer's roots in China go back 132 years, when the company provided textile dyes. Today, the greater China market is Bayer's third-largest single market globally and the first in the Asia-Pacific region.

    We have successfully developed our business here, and we are committed to further invest in this market and to bring the most innovative technology and products to China, supporting the idea of turning "Made in China" into "Created in China".

    By aligning the core competencies of our three subgroups Bayer HealthCare, Bayer CropScience and Bayer MaterialScience, as well as of the service company Bayer Technology Services, with some of China's most pressing demands, we have strategically positioned ourselves to capture further growth opportunities. We anticipate our business in this market will continue experiencing strong growth in the following years.

    A4 China's environment problems have become increasingly prominent. We have seen the efforts made by the Chinese government to tackle this issue.

    Recently, the government announced a catalog of measures to further safeguard the environment, such as the introduction of an action plan to strengthen emergency management of air pollution and measures to control haze.

    It will also compile an action plan to prevent water pollution and gradually build a comprehensive system of environmental protection.

    From these efforts, we can see that China aims to set up an integrated system to tackle its environmental issues in the long run.

    In the local "two sessions" held earlier this year, 22 local governments lowered their GDP growth targets for 2014, which demonstrates their firm determination to transform the economy and put it on a more sustainable growth pattern.

    A1 China faces the challenge of driving consumer consumption and making this the key component of GDP growth. The overcapacity in industries will need to be addressed, either through increasing utilization by driving up consumption or enforcing labor, environmental and health and safety laws to drive out the illegal products that are negatively affecting the environment and the health and safety of products sold in China. Finding employment for all the people moving to cities in an era when companies are turning to automation is another challenge.

    A2 Leadership. We have the investment resources, we have the brands, we have the equipment, and we have enough people. The treasured resource we lack the most is qualified leaders who can operate in a fast-moving consumer goods market environment, can use best practices from around China or the world in their area of operation, and lead and coach their subordinates to be better leaders than they themselves are.

    A3 Our business has rapidly expanded in the past 20 years and will do so for the foreseeable future. The reason is very simple. The consumer market will expand, and we have the superior products and consumer insights. This will enable us to not only continue to grow organically: Inorganic opportunities are often "knocking on our door" to work with us.

    A4 I am very proud to say that Carlsberg gives environmental issues a priority as high as our consumer and customer priorities. We have invested heavily in ensuring that our operations strictly adhere to the EPA regulations, and we provide training at all levels of the organization on environmental and health and safety.

    We continue to strive to be seen as the gold standard in our industry for environmental compliance and management. This is not easy in a country as large as China and with as large a footprint as our operations have in China, but we are committed to this priority.

    A1 For our food industry, which is closely related to manufacturing and farming, the priority is land reform to free up the buying and selling of farmland in order to produce more and better food. That will be very difficult without true land reform.

    Farmers must be empowered to become entrepreneurs.

    I believe Chinese farmers can be small companies. There are too many farmers and small plots of land; they need to be able to consolidate for better productivity.

    A2 Last year, we had another very good year. Although growth was slower than in 2012, we are still growing nicely. There is a clear difference between products having to do with private consumption - such as drinking beverages and cooking at home, which are still growing well and other things, such as gifting and restaurants, which are down. High-end catering and gifting probably will never return to their former high growth.

    This year will be better than last year but still will have the same trend.

    Overall, we are confident because we are focusing on the domestic economy. In 2014, in catering, we are changing to medium-priced restaurants rather than expensive restaurants and focusing on mainstream restaurants.

    We also are focusing more on consumption and less on gifting.

    A3 We have invested close to $500 million every year on new equipment and new machinery in China and will continue to do that in the foreseeable future. We are doing about $7 billion in business, but we still have a lot of room to grow.

    One of the priorities for us is to understand the Chinese consumer and become a model company, which is different from what we have in other countries. China is competitive, fast and innovative. Working with Chinese partners, you cannot manage Chinese entrepreneurs as you can manage foreign ones because they are faster, more flexible and innovative. Nestle's model in China has to be different from anywhere else. We have to put on our Chinese glasses and leave our Western glasses at home.

    A4 The biggest environmental problem has to do not so much with investment or business decisions but with recruitment. We are really struggling to convince people to work and live in Beijing, especially people with children. We certainly don't want to expand our office here. We'd rather expand to other places that are outside of Beijing.

    © Copyright 2017 Invest in Xiangyang
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