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Voices | 'Dual circulation' to boost growth (I) Release date: 2021-01-12

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 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 has the China operations been in your overall performance last year?

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 chain?

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: How does China fit into your overall business strategy in the coming years? What role do you expect China to play in driving the world economy?

Q7: 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?

Kamran Vossoughi, president and CEO of Michelin China

A1: For Michelin, the Chinese market has always been an important growth engine, and it has become particularly important during the pandemic. Michelin China's business has gone through three stages: a short-term downturn, rapid recovery and sustainable growth last year.

There are several major reasons behind it: Our business has proven to be quite resilient. From the main business tires, we are gradually moving toward connected services and solutions, high-tech materials, hydrogen mobility, and Michelin experience business. We are also embracing digitalization to cope with the ever-changing market and seize more opportunities.

We are full of confidence in 2021 and beyond.

A2: Foreign companies are important players in dual circulation. Deeply rooted in China for more than 30 years, Michelin has established deep connections with the Chinese market, the mobility industry stakeholders and Chinese consumers. Michelin is an international brand, but we are Chinese company in China, serving the Chinese market, satisfying consumers' rapidly evolving demands with high-quality product and service. Foreign companies are also great beneficiaries of the dual circulation. Promoting external circulation means that China will further open up and optimize the business environment.

A3: We have deepest feelings about "safeguarding the operations of market entities". The vitality of market entities is the foundation of entire economy. The government's efforts have ensured the stability of the industrial chain and supply chain, 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. From the first sign of the pandemic, we focused our actions on two absolute priorities: to protect the health and safety of every Michelin employee and to ensure business continuity, which are in line with the country's direction. Thanks to a stable and safe external environment, Michelin was able to restart production at factories in China on February 10 and resume business growth in April last year.

The stability of China's economy can boost confidence. Michelin China proactively explores new businesses, searches for new partners and detects new opportunities. And it has been recruiting talents to prepare for a high-quality and high-speed development.

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 view of development has moved from quantity to quality, which places new requirements for companies on keeping pace with such transformation. Michelin will endeavor to bring science-based and technology-focused products and services to Chinese market.

Reform and innovation are the fundamental driving force. We believe that there will be more reforms and opening-up policies that will encourage and protect innovation. Michelin is delighted to see this new development trend, and will strive more for innovation.

A6: China focuses on high-quality development and innovation, which fits Michelin's strategy well. Michelin has been in the China market for three decades, and we are upbeat about our growth here in the next three and many more decades. We are committed to contributing to China's high-quality growth in the coming decades, as we leverage our expertise and innovation capabilities to further promote sustainable mobility in this country. We are also committed to minimizing our impact to environment with our carbon neutral strategy.

A7: In the 14th Five-Year Plan (2021-25) and 2035 long-term development goals, I have repeatedly seen the word: "people". People are regarded as the most important criterion for the success of development. For example, development is for the people, development depends on the people, and the fruits of development are shared by the people, with the aim to promote common prosperity.

As part of our sustainable strategy, everything Michelin does must meet "three inseparable criteria — people, profit and planet". We share the same philosophy. Our development is by people and for people.

I'm also touched by the key direction – the 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.

Benedikt Sobotka, CEO of Eurasian Resources Group

A1: Our longstanding and strategic relationship with China as well as our presence in the country is core to ERG's business. China makes up about 25 percent of our sales, which include ferrochrome, cobalt, copper, alumina and iron ore products.

Despite the COVID-19 pandemic and its disruptive effects on the international supply chain, our business in China continues to post strong results, which have helped further reinforce ERG's financial performance. For example, our iron ore shipments to China reached 3.6 million tons from January to September last year, setting a new record. For the same period last year, a total of around 1.9 million in iron ore shipments was recorded.

We are committed to further developing our relationship with China and exploring new avenues of growth going forward, supporting the country's transition to a low-carbon economy.

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, which has brought great support to our project development overseas. The internal circulation side focuses on improving manufacturing, developing the transition to a service-based economy and promoting new infrastructure projects, which entail significant demand for our products such as ferrochrome, iron ore and cobalt. Therefore, 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: As an international metals and mining company, ERG engages in mineral products sales and project cooperation in China. Among the "Six Safeguards and Six Priorities", ensuring and promoting stability in foreign investment, international trade, supply chain and other fields has further created an attractive and reliable business environment. 2020 was a challenging year. The rapid resumption of our operations in China and the progress of ERG's trade and cooperation cannot be 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. As the world's second largest economy, China plays a critical role in promoting and safeguarding global economic development. With a burgeoning consumer market, China is not only in a position to drive global growth but also promote regional supply chains.

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 roll-out of new infrastructure is also driving the rapid development of related industries in China. ERG is confident that our extensive portfolio and strategic assets will strongly support the transformation and development of related sectors and infrastructure.

A6: China has been a longstanding and strategically important market for ERG. China is a global leader in many areas, and is certainly one of our core markets. China's vast manufacturing base provides a growing market and long-term opportunities for the mining and metals sector. China has been reiterating and strengthening its support for opening-up. From financial support to project construction and cooperation, it provides very promising avenues for us to promote our business. We believe that China's tremendous market potential and vibrant industries will continue to positively influence the world economy.

A7: 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 develop industries including new energy vehicles, along with new infrastructure projects and construction, including 5G and EV charging stations. These will all further drive our sales of copper, cobalt and other products to the country.

China has also highlighted its intention to build an increasingly open economy and promote high-quality development in the context of the Belt and Road Initiative. This specifically includes further relaxing access to foreign investment, facilitating trade and investment, and ramping up support for Belt and Road projects. We look forward to continuing to leverage our extensive portfolio to help the country achieve its development goals.

By Zheng Xin and Zhong Nan