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Voices | 'Dual circulation' to boost growth (II) Release date: 2021-01-13

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?

Jon Penrice, president of Dow Asia Pacific

A1: In 2020, the world economy and social order saw great turbulence due to COVID-19. Through prevention and control measures at the early stage of the pandemic, the Chinese economy showed positive signs of recovery.

During the pandemic, China continued to work, diligently serving customers, and providing the market with essential materials necessary for fighting 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 quarter, 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 potentials.

Dow had been in China for 41 years with well-structured manufacturing and service network here. Growing domestic market will further accelerate Dow's growth strategy in this market. Meanwhile, Dow will continue to introduce latest innovations to China. Further opening-up 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 living were essential to ensure the economic and social stability of China. The Chinese government has spent tremendous efforts in helping the small businesses, the unemployed and ensuring the resilience of the supply chain, which all paved the way for the quick economic recovery. Dow has benefited from a series of policies which lessened our burden during the pandemic, for example the reduced social security fee payout rate. All the 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 last year.

A4: China's effective and successful control of the COVID-19 pandemic domestically and restoration of business activities nationwide contributed to its V-shape economic recovery since the later first quarter of last year. We appreciated the support from local governments which enabled Dow China team to quickly resume work and provide many essential supplies that China needed to fight the pandemic and ensure the supply chain stability. 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 workforces in other countries and regions.

A5: China has entered a new development stage with an increased emphasis on high-quality growth which aligns with Dow's focus on innovation and sustainability. With hundreds of millions of Chinese consumers moving into mid-income class, there is a growing demand for high-quality products and solutions that are both innovative and sustainable. Dow has been introducing its world-class products and technologies to China since our first day in China and partnering with local customers and value chain partners to satisfy this demand trend.

A6: China is the largest international market for Dow, which is in the critical period of consumption upgrading, urbanization and sustainable development, and the demand for high value-added materials solutions is therefore increasing.

China is also transforming to play a leading role in many industrial sectors such as transportation, e-commerce, IoT, new energy, etc. All these market trends are in full line with Dow expertise and offering for markets.

We also recognize the growing efforts that the China government is paying on IP protection and business environment improvement with new legislations and regulations.

A7: Each five-year plan provides business community and international companies who operate in China with comprehensive guidance of development strategy and focuses in China. In addition to its emphasis in domestic market development, we are interested in the strategic industries that the plan spotlighted, such as new materials, new energy and high-end 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.

Camus Bertrand, chief executive officer of SUEZ

A1: SUEZ was impacted by the pandemic during the first half of last year. However, in China, we've now largely recovered from this slump, thanks to the Chinese government's quick reaction and effective measures. By leveraging our local advantage, our China team has been supporting the global group to source personal protective equipment for our employees worldwide since the very beginning of the epidemic. 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 such as SUEZ with more opportunities to introduce our global expertise and solutions to support China in reaching its ambitious environmental goals.

We are implementing our group's 10-year global strategic plan - "Shaping SUEZ 2030". We are determined to increase by 50 percent our investment in R&D, innovation and digitalization by 2023, so as to bring more innovative and customized solutions to help China, as well as countries involved in the Belt and Road Initiative to achieve their ambitious environmental goals.

A3: Among these, major interest for SUEZ include endeavor to have carbon dioxide emissions peak before 2030, achieving carbon neutrality before 2060, with nature being central to the solution 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, 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. We are keen to apply our global expertise and technology to the Chinese context, to help local authorities and industrial clients develop innovative solutions for climate change and sustainable resource management.

A5: China is about to embark on the 14th Five-Year Plan, yet 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 such as SUEZ will play an important role in promoting green transformation and driving sustainable, healthy economic development. This also fully mirrors our global strategy toward three priority areas: expanding our footprint in international markets, especially in China; increasing our engagement with industrial customers; and launching more digitally advanced solutions.

A6: In the past decade, China has been continually changing, driving new growth models with new philosophies. Governments at both central and local level have made environment protection part of their development agenda, and they are vigorously promoting a green and circular economy.

SUEZ's development journey in China reflects not only how foreign companies have been driving China's progress toward a circular economy, but also how China's approach to the environment sector has evolved. We see the growing importance the Chinese government attaches to environment protection and the growth opportunities it provides for foreign companies in China. Such trends are bound to endure, well into the future.

A7: 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 opportunities to develop.

The technologies and experience we have within the SUEZ Group are very much aligned to meet all these ambitions and to support China in reaching its growth goals.

By Zheng Xin and Zhong Nan