Editor's Note: The ongoing 20th National Congress of the Communist Party of China is widely expected to start a new chapter in the saga of reform and opening-up that energized the Chinese economy over the last four decades and made it the world's second-largest. It also sets the tone for improving the business environment for global firms, big and small, operating in the country. China Daily publishes a series of Q&As with business executives from leading MNCs featuring their outlook for the Chinese economy as well as their hopes for the future prospects of their businesses in China.
Form left: Wan Shiping general manager of Aveva China; Fang Ying president of Ericsson China; Chen Xudong chairman and general manager, IBM Greater China Group; Hou Yang corporate vice-president of Microsoft Corp, chairman and CEO of Microsoft Greater China Region; Frank Meng chairman of Qualcomm China. (PHOTO PROVIDED TO CHINA DAILY)
Q1 Against the backdrop of a much-troubled global economy, how will China's economy likely perform going forward, given that it has already made immense contributions to the tasks of stabilizing both the global supply chain and the world economy?
WAN: If we look at the COVID-19 control measures across the world, we note that China has taken decisive and effective control measures, which is a great contribution to the world in a difficult time when the supply chains in other countries are disrupted. It has not only helped sustain the global supply chain but has also maintained the stability of the Chinese economy. As a foreign business here, we are still optimistic about our growth momentum in China.
FANG: China has long been a key engine driving growth for the global economy. As the country continues to pursue more high-quality growth and development while maintaining its leadership in 5G, new energy and some other sectors, I remain optimistic about how the Chinese economy will develop in the future.
CHEN: Despite the uncertainties, we believe that China is on track for sustainable growth and will continue to play a pivotal role in the global supply chain and world economy.
With its enormous market size, sophisticated industrial chains, high-quality workforce and strong social governance ability, an economic rebound is expected in the second half of this year, as the country continues to roll out measures to shore up domestic demand and open up more market sectors, to name a few, the dual-circulation economic strategy, the 30-60 dual carbon goals and the nationwide drive toward wider adoption of clean-energy vehicles.
HOU: Over the past three years, China has taken its role as one of the world's two leading economies very seriously and has taken extraordinary measures to help overcome the pandemic, taken the lead in resuming production and productivity, and is leading the global economic recovery in part through its strong embrace of digital technology. This adoption and innovation have made significant contributions to stabilizing the global supply chain and alleviating global inflationary pressures.
The China market will continue to play a significant role in Microsoft's global business, and Microsoft will enthusiastically participate in and support China's economic growth, technological innovation and talent development.
MENG: Qualcomm has a long history in China that spans nearly three decades. Over the years, we have worked closely and successfully with entities across the ecosystem in China, including operators, OEMs, automakers, cloud companies and distributors. Through our business model, foundational technologies, and advanced platforms and solutions, we have helped to empower and expand the ecosystem and accelerate innovation globally.
In the coming years, digital technologies such as 5G, IoT, intelligent-connected vehicles, VR/AR and industrial internet will create new space for growth. Qualcomm and Chinese industries will have even bigger opportunities for cooperation ahead and we will keep creating value together.
Q2 China has been deepening its reform and opening-up policy, particularly at the institutional level, so as to ensure equal treatment and an optimized business environment for foreign companies operating in China, and to persuade more of them to invest in China and benefit from the country's thrust on tech and innovation. How do you view China's efforts? How can China intensify such efforts, particularly in the context of any potential external or internal barriers?
WAN: The advancement of technology relies on the wisdom and contributions of people from all countries and regions. As an emerging market with high potential, China has a higher demand for technological improvement and progress than other countries. We are very happy to see that the government provides equal treatment and optimizes the business environment for foreign businesses, and we are committed to joining our Chinese partners in providing better products and services for Chinese businesses. We will leverage local resources for mutual benefits by combining the R&D experiences of foreign companies with local human resources in China.
FANG: China's reform and opening-up is the driving force empowering this country's impressive and extraordinary economic growth. Now that China's reform and opening-up have reached a higher stage of maturity, more courage and efforts are needed to continue economic development and growth. I believe China has the wisdom and the will to do so.
CHEN: China has made remarkable achievements as a result of reform and opening-up, emerging as the world's second-largest economy, creating a vibrant market economy. On digital transformation, China has come a long way over the past four decades, and its digital economy including the IT market is highly dynamic and competitive. We are confident that innovation, trust and collaboration will ensure that we can move through current challenges to a more stable and prosperous future in China and around the world.
HOU: China has continued to adopt policies and optimize investments to enhance the business environment in recent years. Because of this further "opening-up", as well as the resilience and vitality of the Chinese economy, foreign companies have greater opportunities to invest in and start businesses in China, and so the Chinese market has become increasingly appealing. China's ever-improving economic foundation and technological innovation capabilities have enabled it to demonstrate strong resilience and flexibility in the face of risks. In the era of the digital economy, this resilience and potential will be amplified. And the innovation-driven development strategy creates incentives for the transformation and upgrading of enterprises in the second wave of digital transformation, which aligns closely with Microsoft's own strategy in China.
MENG: These years, Qualcomm has benefited from the optimized business environment in China. We are proud of the strong relationships we have built with numerous companies in the country and are committed to ongoing collaborations to help them achieve even greater success at home and abroad in the 5G era.
We are impressed by China's growing efforts to make significant progress in improving its intellectual property system. China's ranking in the WIPO Global Innovation Index continues to rise, reaching 12th place in 2021. The achievements signal a bright future for China's innovation-driven development strategy. Strong and equal IP protection will further enhance foreign companies' long-term confidence to invest in China.
Q3 Innovation has been the bedrock of China's modernization. What new opportunities can you foresee for the world in China's pursuit of innovation-powered high-quality development?
WAN: China's industrial output ranks first in the world, which overtook the United States many years ago. China has a huge and complete supply chain system, backed by the world's largest consumer market, and industrial companies around the world are very optimistic about the prospects and potential of the Chinese market. This does not conflict with China's proposal to have independent property rights in technology. On the contrary, more opportunities for cooperation are available within such an intensive investment environment.
FANG: The pursuit of high-quality development requires advanced technology equipment as well as high-quality products and services. 5G is one such technology. China is playing an important role in global 5G development. This indicates that China will be a key driver behind core demand for 5G and its development of new features. Ericsson aims to enter the leading market with innovative technology and applications, and China is such a market.
CHEN: More Chinese companies are demanding a stronger, smarter and more resilient digital infrastructure as they "go global" and up their game. That is where IBM's technology and consulting expertise can pitch in and help them stay competitive. Globally, I believe that technology has become a fundamental source of competitive advantage. More than ever, technology serves as a catalyst that can help businesses boost productivity, innovation and their ability to scale.
The banking industry provides a good example. After having led the modernization of the global banking systems for decades, IBM's mainframe platform continues to evolve, and delivers critical and cutting-edge innovations that financial businesses need.
HOU: Microsoft has been in China for 30 years. To us, China is one of the world's most innovative and dynamic markets. We plan to continue to responsibly serve in our role as an international technology company helping Chinese innovators elevate their technology solutions on the global stage. We code and build with our established local ecosystem in a dynamic of joint innovation to assist Chinese customers in their digital transformation. In terms of basic research, Microsoft has built five of the most capable R&D centers in China. We also extend cooperation with local governments with dozens of innovation incubators throughout China that are tailored to local economic development needs, serving startup companies, promoting local innovation, and developing local talent.
Both the current state of the innovation environment in China and our continued commitment to the market reflect our confidence in China's economic prospects and technology development potential.
MENG: Through broad partnerships, we sincerely feel that Chinese enterprises have the determination and courage to build themselves into world-class players. In this regard, they are always keen on embracing and adopting new technologies and are able to adapt to change and create win-win partnerships. Chinese companies have actively integrated themselves into the overall landscape of global technological innovation, which created even broader opportunities for collaboration with companies like Qualcomm. Looking ahead, Qualcomm will continue to build on our technology roadmap, delivering to the ecosystem with advanced chip products and technologies, and partnering with industry partners to build an intelligent, connected world.
Q4 What's your take on China's dual carbon goals, which have received a thumbs-up globally? Do you see big business opportunities arising from the country's carbon goals?
WAN: The carbon peaking and carbon neutrality goals are China's serious commitment to the world. China is putting continued efforts into fulfilling its goals. This is what we call a great nation, and it contributes tremendously to the global sustainability initiative. The government has provided huge support for clean energy development, both in terms of policy and financial aid — for example, the hydrogen industry and new energy vehicles. These are great opportunities that industrial software companies need to catch.
FANG: China's dual carbon goals are tremendously inspiring, especially taking in the efforts made and today's achievements. It also indicates further and grander accomplishments, which will undoubtedly benefit society at scale. 5G has enormous potential and promise in sustainable energy management. While the ICT industry accounts for 1.4 percent of global carbon emissions, existing ICT solutions have the potential to enable carbon emission reductions by 15 percent in society as a whole if applied in the right way. As continuous innovation on 5G technology and products reduce the ICT industry's carbon footprint, integrating 5G technology and industries will facilitate carbon reduction across all industry verticals. As a world-leading 5G vendor, Ericsson is willing to participate in and contribute to China's sustainable development.
CHEN: Extreme environmental events, such as the record-breaking heat wave in parts of Europe and Asia, pose an existential challenge to all of us. They demand closer cooperation between governments, companies and communities on sustainable growth.
China's dual carbon goals are important and welcomed, and fuel the need to make traditional industries such as manufacturing less energy-intensive and more digitalized. Companies of all sizes will play a key role in achieving these ambitious goals, be it going green or enabling others to go green.
On sustainability, we are helping China and countries worldwide achieve sustainability goals through a full package of offerings, as well as supply chain and asset management. This aligns with IBM's own goal to achieve net-zero greenhouse gas emissions in our own operations by 2030.
HOU: Microsoft strongly acknowledges the value of China's dual carbon goals and their importance in advancing the cause of sustainable development worldwide. Since Microsoft has committed to becoming carbon-negative by 2030 and to eliminating all historical carbon emissions by 2050, we are aware of the technical challenges involved in shouldering the responsibility of achieving and promoting sustainable development and are committed to making investments in this field using cutting-edge technologies like cloud, AI, IoT and digital twins. We will also work with industrial partners to improve the management of carbon emissions, create solutions and ultimately facilitate China's sustainable development vision.
MENG: China and the world will benefit greatly from a transition to a green, carbon-neutral economy. Like many other companies, Qualcomm believes environmental sustainability will create significant social and economic benefits. We set a goal of net-zero greenhouse gas emissions by 2040. As we explore ways to create a more sustainable and greener future, Qualcomm sees technologies such as 5G playing an essential role. We are working with our partners and customers to reduce emissions footprints, conserve resources and harness the sustainability benefits of 5G globally.
Q5 What's your view on modernization in China that has spawned common prosperity? What does this pursuit mean for foreign businesses?
WAN: Common prosperity is the ultimate demonstration of the people-oriented approach. The sustained prosperity and stability of a country can be achieved only by putting people's wellbeing as the top priority. The same holds true for businesses. Employees are the primary productive force. As a wholly owned foreign business operating in China for nearly 30 years, Aveva has always put employees as the top priority.
FANG: Modernization in China has been a huge success, enabling the country to become the world's second-largest economy while eliminating absolute poverty. For foreign companies, a flourishing, stable Chinese market with strong consumption capacity is the basis for their success in China as well as an integral part of their global business.
CHEN: A key feature of a modern society is consistently improving quality of life.
China's modernization pursuit will contribute to the country's high-quality growth and a high-quality way of life for its people. With "high quality" comes the demand for more open business environments, a freer flow of people and resources, more favorable policies for high-performing and innovative companies and a stronger digital infrastructure for companies and individuals.
This momentum and China's continuing opening-up create new opportunities for Chinese companies and foreign businesses in China alike. IBM has been an active part of the Chinese business landscape for decades, and we will continue to bring value to Chinese clients and partners through our technology and consulting expertise.
HOU: We believe the government's commitment to pursuing a higher standard of living for the Chinese people has advanced common prosperity. And modernization fueled by technological innovation will unquestionably be essential to the continuing success of this vision. For multinational corporations, particularly those in the technology sector, modernization means making technologies more accessible to those in need and more widely used in ways that enhance people's daily lives.
Microsoft will continue its 30-year track record of increasing investment and commitment in the development of areas of common public interest such as education, economy, sustainability and more, as aligned with the company's mission to "empower every person and every organization on the planet to achieve more."
MENG: China's efforts in reducing poverty over the past decades have been a great success. Qualcomm believes that cutting-edge mobile technologies can be used innovatively for social good and help drive human and economic progress in underserved areas. For example, through collaboration between Qualcomm Wireless Reach initiative and the China Foundation for Poverty Alleviation, the "Smart Agriculture" program has installed IoT technology to help local farmers monitor meteorological conditions, water quality, soil conditions and crop pests and increase the efficiency of traditional agricultural cooperatives in three provinces. To date, over 4,700 farmers have benefited from the program.