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MNCs plan deeper integration with Chinese market

China Daily Updated: 2022-10-20
From left: George Ye general manager of Edwards Lifesciences Greater China, Hiroshi Hamaguchi chairman and president of Astellas China, Felix Gutsche president and CEO of Boehringer Ingelheim China, Jean-Christophe Pointeau president of Pfizer Global Biopharmaceuticals Business China, Zhang Wei general manager of Merck China Healthcare

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.

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?

YE: For Edwards Lifesciences, China is an important and strategic market. As a global leader in medical technology, we wish to strengthen our ongoing commitment to help the country pursue its Healthy China Initiative by 2030. We recognize the government's efforts to broaden reforms, and we are wholly supportive of those efforts that recognize the value of clinicians and, ultimately, ensure that the investments in healthcare are really being delivered to the care of patients.

HAMAGUCHI: As the world's second-largest economy, China has demonstrated its strong economic resilience over the years, and is also an important driving force for global economic recovery. We remain confident that China will continue to see a resilient, vibrant and stable economy. With China's stable economic fundamentals alongside the increasing need for high-quality innovative solutions in the healthcare industry Astellas is in, we are optimistic about our long-term development in China.

GUTSCHE: Our outlook for the Chinese market over the long run remains unchanged. We have confidence in the vast potential and resilience of the Chinese market. China is not only a popular destination for global investment, but also a stabilizer of the global supply chain amid the COVID-19 pandemic. It is essential for the Chinese economy to maintain stable operations to counter the uncertainties of global economic recovery.

By adhering to the philosophy of cooperation, openness, mutual benefit and win-win scenarios, China is becoming a major promoter of economic globalization. Going forward, we hope to see a robust Chinese economy in the context of further opening-up policies that will facilitate more cross-border business interaction.

POINTEAU: China is the world's second-largest pharmaceutical market and an important market for Pfizer. We believe that China's economy will continue to expand and its investment in health will deepen over the long term. Pfizer remains committed in our efforts to drive key outcomes outlined in the Healthy China Initiative 2030 and will leverage our resources to introduce innovative drugs that benefit Chinese patients. We will do that in two ways: by bringing new medicines from our pipeline to China, and through partnerships with innovative Chinese companies.

ZHANG: China is of huge strategic importance to Merck globally. We've been here for 89 years and have benefited enormously from China's reform and opening-up, witnessing the "China speed "of its development. One thing we've always been amazed by is the resilience and resourcefulness of China's people and economy. Merck has stayed fully focused on our business, responding with agility to all challenges, and persevering in our efforts in China and for China. We remain confident that China will continue to take full advantage of its strengths in the future.

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?

YE: China has been stepping up efforts in its reform and opening-up and optimizing the business environment, which strengthens our confidence in the broad domestic market. We see its authorities have taken numerous measures, such as the China Import and Export Fair (Canton Fair), the China International Import Expo (CIIE), overseas warehouses and cross-border e-commerce, to provide a strategic business environment for foreign companies.

Edwards Lifesciences looks forward to our ongoing participation in the CIIE this year. This is the third consecutive year for us to participate.

HAMAGUCHI: We highly appreciate China's firm determination in furthering reform and opening-up that fosters a favorable business climate for multinational companies like Astellas. Astellas has been a beneficiary of China's reform and opening-up. We have therefore not only accelerated the pace to address unmet medical needs in China with our innovative solutions, but also increased our investment in China with upgraded corporate structure and strategy. China's ramped-up efforts to enhance patient access to innovative drugs and protect intellectual property rights will give us stronger incentives to innovate and turn innovation into value for patients at a faster pace.

GUTSCHE: In recent years, China has taken concrete steps to improve the business environment in different dimensions, which in turn has enhanced China's economic growth. It is expected China will deepen market reform and promote high-level opening-up by continuously shortening the negative list for foreign investment, strengthening the protection of rights and interests of all market players, and ensuring a level playing field. All these would contribute to China's highquality and sustainable economic development goals. From the biopharma industry standpoint, it is expected that China will play an active role in contributing to the improvement of the global governance system to ensure a robust global trade and health agenda.

POINTEAU: Pfizer has confidence in the government's policies and efforts to optimize and attract foreign investment. China is becoming an important source of innovation for Pfizer and the whole world. We have also seen the rapid development of the Chinese domestic innovative biopharma sector in the last few years as an opportunity for MNCs. In recent years, China has issued a series of relevant policies, regulations and guidelines for drug review and approval. It has also made many achievements in optimizing the drug review and approval process, encouraging innovation, improving drug quality, and strengthening drug life cycle management.

ZHANG: We have been both a beneficiary and contributor to the reform and opening-up in China. Our continuous investment means we are highly merged with China's local supply chain and its industrial value chain. We are grateful for the opportunity we have enjoyed over the years to have established sound partnerships with local companies and contribute our technological expertise to China's ongoing development. Looking ahead, we hope China will continue to build on its efforts to improve the stability and predictability of the business environment and ensure fair treatment for MNCs.

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?

YE: Since entering the Chinese market in 2001, Edwards has actively embraced and benefited from China's pursuit of innovation-driven development.

In recent years, the upgrading of China's consumption structure has created a broad space for the development of advanced, high-quality and customized health services. Scientific and technological innovations have provided strong support for improving health levels. As of the end of 2021, the number of people aged over 60 in China had reached 267 million, 18.7 percent of the total population. The gap between supply and demand for care services continues to widen, and the demand for high-quality medical and health services will increase dramatically, in which Edwards can contribute more to address unmet Chinese patients' needs.

HAMAGUCHI: A recent report on global innovation shows that China has become not only an important participant but also a major contributor to international frontier innovation. China's persistence in its innovation-driven strategy has paid off. In our focused areas, we have seen more value-oriented innovation, more possibilities in simultaneous launch of new products between China and the outside world, and more collaborations with rising local innovation power. On a broader level, we see China's pursuit of innovation will continue to boost global pharmaceutical innovation, which will ultimately benefit patients in China and around the world.

GUTSCHE: China positions innovation at the heart of its modernization drive, and is striving to build cutting-edge technologies, spur economic growth, meet the country's critical needs, and improve people's health by implementing an innovation-driven growth strategy.

The strategic focus on innovation also helps global healthcare multinational companies capitalize on the huge potential of China's supersized market. People's urgent need for innovative products, health services and demand for animal health solutions underpin the biggest opportunities for Boehringer Ingelheim in China.

China's thriving innovation ecosystem built over the years has brought great confidence to multinational companies and will continuously encourage us to be "in China, for China and the world".

POINTEAU: The Chinese government continues to strengthen the ecosystem for innovation. The pharmaceutical sector takes a lot of risks in the development of vaccines and medicines. We've seen around the world that the pandemic has had a disproportionate effect on those who lack resources. We are committed to bringing our global resources and network to support the development and commercialization of breakthroughs to meet domestic medical needs. Pfizer China R&D collaborates with leading academic and university institutions in China, and through these collaborations, we continue to advance the development of research and innovative medicines in China.

ZHANG: We applaud China's determined efforts to become self-reliant in pursuit of innovation-powered, high-quality development. Merck has been in China for many years and has a fully-fledged local footprint, which includes one of our four healthcare R&D hubs located in Beijing. It is a key hub in our global network where we develop innovative drugs treating diseases of high prevalence in China. We continue to forge strong strategic partnerships with local pharmaceutical companies. In China's evolving and increasingly innovative healthcare ecosystem, Merck is committed to driving innovation for superior patient outcomes.

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?

YE: China's ambitious goal of net-zero emissions demonstrates responsibility and a desire for a green future.

As we serve patients worldwide, Edwards understands the importance of addressing climate change and is committed to driving a meaningful reduction in our greenhouse gas (GHG) emissions. Edwards also sets a carbon neutrality target globally. As part of our commitment to achieve carbon neutrality by 2030, we plan to transition the majority of our global electricity demand to renewable sources over the course of the next seven years through a variety of methods, including on-site and off-site renewable energy generation.

HAMAGUCHI: The goals demonstrate China's commitment to sustainable development. At Astellas, we recognize that harmony between sustainability and business activities is a prerequisite to our corporate existence. Deepening our engagement in sustainability is one of the strategic goals outlined in our upgraded corporate strategic plan.

As healthcare provider, we mainly focus on the provision of patient access to innovative therapeutics, and our proactive efforts to protect the global environment include climate change response. Astellas China is also taking action. For instance, our digital explorations in engaging healthcare professionals help improve care for patients in a more environmentally friendly way.

GUTSCHE: China's "dual carbon "goals reflect its high emphasis on driving global climate governance as a responsible world citizen. For enterprises, whether we can achieve carbon neutrality will have a profound impact on future success. At present, thanks to a series of favorable policies, China has been fostering a robust ecosystem for developing green innovation technologies and a new generation of business models. We hope to achieve carbon neutrality in all our production sites in China by 2030. In the foreseeable future, we will strive to promote green manufacturing and invest 100 euro ($98.1) per metric ton of CO2 to reduce carbon emissions and contribute to China's carbon neutrality goal.

POINTEAU: China offers huge business opportunities in the process of achieving carbon peaking and carbon neutrality goals. Advancing sustainable economic development is one of the key issues of global concern, and Pfizer is actively addressing climate change and pursuing a sustainable development path that supports and prioritizes our ESG (environmental, social and governance) related programs and commitments to long-term value creation, sustainability, and patient-first business models. Pfizer's plants in China are resource-efficient and environmentally friendly, promoting an eco-civilized corporate development model.

ZHANG: We operate in over 60 countries worldwide, and are extensively involved in the carbon neutrality cause. Regarding China's own net-zero goals, we are confident in the government's willingness, commitment and ability to achieve them.

For our part, we have certain advantages when it comes to eco-friendly technology and best practices in our manufacturing sites, which we are always happy to share with local governments and partners. Take our Nantong site as an example. By establishing continuous improvement processes, we have been able to ensure sustainable energy usage.

Q5 What's your view on modernization in China that has spawned common prosperity? What does this pursuit mean for foreign businesses?

YE: We recognize that China is making efforts to pursue common prosperity. To increase people's access to high-quality medical services, the country has formulated relevant policies and systems to provide a strong guarantee for channeling more advanced medical resources from developed regions to rural areas. At Edwards, we are proud to collaborate with China's leading clinicians and researchers to contribute to developing young physicians who can treat and cure more patients across the country. For example, we have introduced Edwards Academy for the purpose of partnering with clinicians to advance the education of cardiac surgeons in China, and ultimately improve the quality of life for patients.

We believe our innovative products and technologies can address the larger and growing patient populations in China and contribute to achieving widespread happiness by improving patient outcomes and enhancing lives.

HAMAGUCHI: From my perspective, health is the essence of people's well-being, prosperity and happiness, which inspires pharmaceutical companies like Astellas to be more patient-centric. Astellas is on a mission to turn innovative science into value for patients. "Patient centricity" is basically a guiding principle for action throughout the drug life cycle. We will continue to improve patient access to and affordability of our innovative drugs to help more people live healthy lives, contributing to the Healthy China Initiative 2030 and China's goal to achieve common prosperity.

GUTSCHE: One important aspect of common prosperity lies in promoting better health for humans, animals and the environment. Ensuring equal and affordable access to quality medical care for 1.4 billion Chinese people is a challenging social-economic topic, but it also offers emerging opportunities for the entire healthcare industry, including multinational companies, while we prioritize patient and public benefit, and practice social responsibility.

Boehringer Ingelheim has also been taking concrete actions in China to reduce development gaps between urban and rural areas and support rural vitalization. For example, we provide professional training for rural veterinarians and aid the recovery of animal husbandry in disaster-stricken areas, in order to improve public health service capacity and drive high-quality development.

POINTEAU: Pfizer is committed to supporting China's development paradigm to bring about a modernized and innovative approach whereby foreign enterprises strive for breakthroughs and contributions in scientific and technological innovation together with Chinese enterprises.

We are working with all sectors of the community to improve the quality of China's healthcare industry, and to improve the accessibility and affordability of quality healthcare services for its patients.

ZHANG: From the perspective of our healthcare business, there are intrinsic connections between our mission and the Chinese government's commitment to improving people's health and quality of life. We have significantly transformed our business to meet new needs and adapt to the new dynamics of this market. We have also continued to introduce new innovative medicines and therapeutic solutions to healthcare professionals and developed more affordable and accessible ways to benefit more patients throughout China.

We look forward to continuing to invest in China, which, among other benefits, will create job opportunities, as well as play an important role in the continued evolution of China's healthcare system.