Global execs look to grab business opportunities

Editor's Note: During the two sessions, the annual sittings of China's top legislature and political advisory body, which are being held from March 4 to 13, China Daily is publishing interviews with executives of major foreign enterprises operating in the country. Their views below give a glimpse of both their outlooks for the Chinese economy and their business plans for this year.

Q1 Given the backdrop of a feared global economic recession, threats to global supply chains and the deep impact of the COVID-19 pandemic, what's your outlook for China's economy and your company's operations in China in 2023?

OZAWA: With the significant optimization in China's COVID-19 policies in 2023, the Chinese economy is expected to rebound with great resilience. Canon has confidence in and looks forward to China's economic development this year. At the same time, we are aware that we are still in a world full of volatility, uncertainty, complexity and ambiguity. Therefore, Canon will make all-out efforts to broaden sources of revenue and reduce expenditure. We will not only seize every business opportunity to gain profits, but also review our management costs.

BRINDLE: 2022 was a challenge on many fronts and I am optimistic that we will see a strong turnaround in 2023.The optimization of China's COVID-19 policies should help stabilize and strengthen the economy. In recent years, Novartis has seen strong performance in China, both in terms of drug approvals and business growth, and this year is off to an auspicious start. Just a few days before Chinese New Year, 14 Novartis medicines and indications were included in the national drug reimbursement list and our major breast cancer drug received regulatory approval.

HOU: Microsoft has been optimistic about the growth potential of China for more than 30 years and this belief remains unwavering. There is a lot of digital transformation work left to do, helping enterprises upgrade and digitalize their operations. This is especially critical in key industries such as manufacturing, healthcare, automotive and retail, which are our focus for 2023, where deep industry expertise makes all the difference for our customers' success. Meanwhile, Microsoft 365, which is our communication, collaboration and intelligent productivity platform built around Teams, is increasingly serving as an "organizational digital hub" in a growing number of businesses.

CHENG: After a challenging 2022, the stars are aligning for a much better 2023 for China. This year, just as the US and European economies slow, the world will benefit from a rebounding China. Adding to the momentum is a strong pro-growth shift in economic policy by the new leadership team. At the annual Central Economic Work Conference in December, policymakers pledged to revive domestic demand and support the private sector, a marked shift from recent years. Efforts are also gathering pace to aid the beleaguered housing market that contributes one-quarter of China's GDP. Scrapping quarantine measures for international travelers may rekindle foreign investors' enthusiasm. All this has prompted DBS Group to revise its full-year GDP forecast for China in 2023 to 5.5 percent from 4 percent.

HUNG: Amid global uncertainties, we expect China to become a major driver and stabilizer of global economic recovery with robust and quality growth. We maintain our 2023 China growth forecast at 5.8 percent with consumption being the key driver.

As an international bank deeply rooted in China for 165 years, Standard Chartered Bank has a long-term and steadfast commitment to China. The bank has been growing steadily alongside China's continuous development. We're accelerating in seizing China opportunities with the ambition to double its profit contribution to the group by 2024, compared with 2021.

We will also continue to invest in the Greater Bay Area — a key strategic focus for the bank — to support the dynamic and fast-growing opportunities including the new economy sectors in GBA.

Q2 Which business segment (s) of your company do you expect to see high growth in China this year? What are the new trends and interesting business opportunities in the Chinese market that your company might be keen to tap? How will you align your business strategies with such trends?

OZAWA: With the continuous upgrades in China's industries and consumption, there is a surging demand for overseas high-end manufacturing and high-tech services. Metaverse, 5G, cloud computing, big data and artificial intelligence could be combined with the traditional imaging, medical and semiconductor industries to create new demand. Against such a backdrop, Canon will continue to expand and deepen its industrial cooperation with its Chinese partners.

BRINDLE: We see an unmet and pent-up demand for innovative medicines in China, especially in therapeutic areas like immunology and treatments for breast cancer and cardiovascular disease. For instance, China accounts for nearly one-fourth of new cancer cases globally, with nearly 420,000 breast cancer diagnoses annually. We are prioritizing innovative medicines to address these needs and bringing them to China as fast as we can.

By 2024, we expect more than 90 percent of our clinical development programs in China will be carried out simultaneously with our global timelines. We expect to submit 50 new drug applications in China within five years.

HOU: At the highest level, Microsoft believes that the digital economy will regain traction in China and accelerate again, becoming a primary force driving the country's development. The market environment is shifting in favor of sustainability and digital transformation of entire industries, which companies such as Microsoft can help advance with proven technology solutions and global experience, coupled with vast local and global resources.

We aim to mobilize Microsoft's collaborative industry, academia and R&D capabilities — both in China and around the world — to turn new research discoveries into products and solutions that contribute to driving the digital economy.

CHENG: The Greater Bay Area initiative remains an important part of DBS' strategy and 2023 will also mark the fifth year of implementation of DBS Bank's "GBA strategy". We are confident and thrilled that there will be more opportunities and room for growth for DBS Bank in the GBA, especially since the border reopening.

DBS is also very interested in the development of digital RMB and looks forward to opportunities for digital RMB to "go abroad". DBS is actively seeking suitable digital RMB landing scenarios in the Singapore market and is in discussions with the Monetary Authority of Singapore and relevant authorities in China to pioneer in this area.

HUNG: We see several structural trends in China over the next few years, including the acceleration of global assets shifting toward renminbi assets, shifts in supply chain flows, continued strong growth in wealth creation and the need for offshore diversification, and further domestic and offshore growth of Chinese corporates.

With our unique network strength, local expertise and innovation capabilities, we're committed to bridging and accelerating domestic and international circulation for China, in areas such as RMB internationalization, the Belt and Road Initiative, GBA, the Yangtze River Delta region, capital market opening, cross-border trade, sustainable finance, small and medium-sized enterprises and wealth management.

Q3 China's top policymakers have pledged greater efforts to attract foreign capital, widen market access, promote further opening-up of modern service industries and ensure a level playing field for both domestic and foreign companies. In this context, what measures do you expect this year? Will you draw up new plans for investment, hiring and business expansion in China?

OZAWA: The Chinese economy is very resilient and China is the most important market for Canon. Canon is confident in the Chinese market and we have set the goal of making Canon China No 1 in terms of sales within the whole group by 2035.We also believe that the government can create a better business environment for foreign companies, where we will naturally establish a more comprehensive supply chain from R&D to production and sales in China, and make more investments here.

BRINDLE: China's leaders have made it clear that the door to the outside will only open wider, and continue to advance policies that support and validate this positive direction. With a transparent and predictable business and policy environment, it will entice many multinational companies to formulate long-term investment and development strategies in China. The pharmaceutical industry relies on innovation and the Chinese government is building a pro-innovation environment, including strengthened intellectual property rights protection. This ultimately rewards innovation and encourages Novartis to bring more innovative medicines to the China market.

HOU: We are encouraged to see that, despite the pandemic, China remains focused on providing exceptional opportunities in the digital economy. With this, multinational companies are once again evaluating opportunities to invest in and start businesses in China. Last year, in honor of Microsoft's 30th anniversary in China, we unveiled several cutting-edge initiatives to accelerate the development of our local ecosystem partners. From sustainable business plans to environmental sustainability in both customer solutions and partner operations, these initiatives aim to help China meet its ambitious sustainability goals while also further energizing the China market through innovation in a space with growing and urgent global demand.

CHENG: DBS has been deeply involved in the opening-up of China's financial markets. One of the most recent results is the opening of DBS Securities in 2021. With the continuous expansion of DBS' onshore business platforms, DBS Group is dedicated to providing more comprehensive financial services to our Chinese customers. DBS will continue to actively support Chinese enterprises to go global, especially in response to the Belt and Road Initiative and the Regional Comprehensive Economic Partnership, supporting them in infrastructure construction and project financing in related markets as well as facilitating them to set up headquarters in Singapore to further expand their business network to Southeast Asia.

HUNG: We are optimistic that China will continue to deepen its reform and opening-up at an accelerated pace, supporting the opportunities for which we have been positioned for the past decade.

We are very pleased to receive approval from the China Securities Regulatory Commission in January to set up a securities firm in Beijing, which will further enhance Standard Chartered's position in China's onshore capital markets.

Seizing China opportunities is a strategic priority for Standard Chartered. We have committed a $300m investment in 2022-24 into China-related businesses and capabilities. The investment is well on track to cover areas including digitalization, branch and networks, risk management and compliance, and key business capabilities such as RMB internationalization and wealth management.

Q4 This year marks the 45th anniversary of China's famed reform and opening-up policy. In this context, in which areas do you expect more progress? How is your business likely to benefit?

OZAWA: The year 2023 marks the 45th anniversary of the reform and opening-up policy, as well as the 45th anniversary of the China-Japan Treaty of Peace and Friendship. As one of the first batches of foreign enterprises to enter the Chinese market, Canon has witnessed the whole process of reform and opening-up and benefited greatly from the exploration of various business models. Having held the position of chairman of Canon China for 18 years, I can say that I have personally experienced the process of reform and opening-up to a higher level of openness and my experience is rare even among foreign companies. Therefore, personally, it is hugely rewarding for me to have my career centered in China.

BRINDLE: Novartis has been a beneficiary of China's reform and opening-up. We've received about 90 new drug approvals since 1987, with nearly half taking place after 2017, thanks to a fundamental overhaul in the drug review and approval process. China's forward-looking experimentation with bold pilot programs in the Boao Lecheng International Medical Tourism Pilot Zone in Hainan and the Guangdong-Hong Kong-Macao Greater Bay Area is allowing innovative drugs to be used in designated hospitals prior to nationwide approvals. So far, we've brought six drugs to Boao Lecheng and five to the GBA.

HOU: Microsoft has had the privilege of witnessing and experiencing China's economic prosperity through the reform and opening-up period as one of the early multinational companies investing in a permanent presence here. We consider ourselves extremely fortunate to have the opportunity to contribute to the nation's prosperity. We have resources on the ground to engage locally, and global platforms and technologies to offer the best options for customers operating in China, thanks to early investment and the enduring welcome we receive from the China market. Moving forward, we will continue to help multinational companies expand their business and operations in China and help Chinese companies expand their international opportunities.

CHENG: As the economic and trade relations between China and the Association of Southeast Asian Nations continue to deepen and expand, it is expected that more Chinese enterprises will be able to venture abroad and embrace a larger market. We hope that the digital RMB will have the opportunity to go offshore. DBS is already the largest offshore RMB dealer in Singapore, as well as an active offshore RMB dealer in Hong Kong, and we hope to facilitate the use of RMB as a trade currency in the international market. In addition, we are exploring opportunities for digital RMB to go abroad, such as to Singapore, and to find good scenarios to implement.

HUNG: Standard Chartered is an active participant and beneficiary of China's reform and opening-up. We highly appreciate and actively support China's relevant policies and measures in the fields of opening-up, common prosperity, innovation and green transformation. Our China-related business is a significant contributor to the overall group.

In 2022, we achieved double-digit income growth in China, both onshore and offshore, up 10 percent and 21 percent, respectively. We look forward to leveraging more financial opening-up measures to offer more innovative and high-quality solutions to support our clients in, from and into China.

Q5 As China continues to pursue high-quality development along a Chinese path to modernization, what is your vision for your company's business in the country? What business opportunities do you foresee emerging as part of this process?

OZAWA: China is a country with a large population and great economic development, and the Chinese market is one of the most important markets for Canon. Therefore, Canon China has set the goal and vision to become No 1 in terms of sales within the whole group by 2035. To achieve this goal, we will strive to develop more new businesses, for example, the metaverse, mixed reality, virtual reality, smart office and livestreaming solutions. We will take the lead in innovation to develop more businesses suitable for the Chinese market.

BRINDLE: I believe quality healthcare underpins China's ambitious aims for development. China is likely to continue to increase healthcare spending and support expanding access to innovative and high-quality medicines. Our strategy strongly aligns with this national agenda. We are committed to delivering high-value medicines, driving innovation, expanding access to healthcare and building trust in China. We will continue to accelerate our pace of bringing more cutting-edge treatments to benefit more patients. We anticipate that China will be Novartis's second-largest market by 2024 and central to our global growth strategy for the next 10 years.

HOU: The digital economy is expected to continue to play an important role in China's high-quality development. To seize the opportunities of the digital economy, enterprises must continuously transform their digital capabilities, empower their people, and innovate new products and business models to succeed in a fiercely competitive environment. They must create their own "organizational digital hubs" to build digital command systems for integrated management and to improve productivity. The demand for digital talent will necessarily grow and Microsoft will continue to build platforms and programs to support and cultivate digital talent to serve this need. We will also continue to integrate and promote innovation from Chinese companies working with Microsoft.

CHENG: China is one of the largest green finance markets in the world and the authorities have made substantive progress to classify green activities and develop a clear investment disclosure process. In November, the Monetary Authority of Singapore and the People's Bank of China announced the establishment of the China-Singapore Green Finance Working Group to deepen bilateral green finance cooperation. DBS will leverage its strengths to forge deeper cooperation with Chinese financial institutions to explore areas such as the definition and standards of green and transformational finance, and actively promote the implementation of concrete projects to help further deepen the China-Singapore green collaboration.

HUNG: Innovation, decarbonization and common prosperity rank high on China's agenda and we anticipate China's high-quality development will drive future global economic growth.

China is one of the most important strategic markets for Standard Chartered. With comprehensive licenses and outlets across nearly 30 cities in China, the bank is well-placed and very keen to continuously promote and contribute to China's high-quality development and prosperity.

We focus on three important areas — accelerating green transition, lifting participation and resetting globalization, which is consistent with China's national priorities and commitment.