What progress has China made in streamlining government functions to raise efficiency?
Endress+Hauser is aware that the Chinese government has vigorously pursued reforms to improve government work efficiency, and unleash the vitality and creativity of the market with its efforts to cut administrative roles in recent years, as well as boost supervision to create competition fairness, convenience and quality to optimize services.
We believe that the combination of free market creation, management and optimization of services is a strategic measure to promote the transformation of government functions at the next level, while highlighting the Chinese government's overall vision of economic development.
According to statistics, the average daily number of newly established enterprises has grown from around 5,000 in 2013 to over 16,000 today. The surge highlights that China's economy is upgrading from labor-intensive work to high-tech manufacturing and a service-driven mode.
How has the ongoing supply-side reform changed the nation's economic growth and your company's business in China?
Under the guidance of the supply-side structural reform, China has made notable breakthroughs including cutting industrial overcapacity, destocking and lowering business costs in the past few years. Some industries have experienced restorative growth, as the reform and ongoing industrial upgrading have brought high-quality development impetus.
In the meantime, we have seen more high-quality companies emerge during this process. They have not only enhanced the level of China's industrial chain, but also pushed the country's financial system to serve the real economy.
From our perspective, we firmly believe that the supply-side structural reform will play a positive role in the healthy development of the Chinese economy. It will encourage international corporations to continue to invest more in China.
What's your view of China's policy on foreign enterprises and foreign investment? How can the country further improve its business environment for foreign investors?
We saw a series of foreign investment promotion policies implemented in China last year, and the environment for foreign investments optimized. These results have strongly stimulated the vitality of the market, making the business environment for foreign investments more open, fair, transparent, legalized, internationalized and also more convenient in China.
These achievements could not have occurred without China's opening-up to the global community and inviting foreign companies to participate in the country's economic development.
We are glad to see new changes aimed at streamlining the approval procedure of foreign investment, such as the system of examination and approval for projects, registration and filing, the shortened negative list and the removal of restrictions in various sectors.
How has innovation changed China's economic development and your company's business in China?
We are aware that China has been steadily moving toward an innovation-focused economy. In many areas such as digital economy, network economy, platform economy and sharing economy, China is already a pioneer.
The nation's rapid innovation has benefited international companies such as Endress+Hauser, because innovation has always been a driving force of our sustainable development and business growth.
China's key innovation trends and challenges around sustainable urbanization, industrial upgrading and economic restructuring provide us with many growth areas. The reality has pushed us to develop and deliver more innovative solutions and related products and services in the country. These will help us address those challenges.
What's your suggestion for China to achieve sustainable economic development?
I think China should focus on two aspects to achieve sound and sustainable economic development. First, the country should strengthen coordination and cooperation in optimizing the policy system, focusing on the key contradictions and adequately grasping the rhythm and strength.
It is necessary to further cut taxes and administrative fees, maintain reasonable capital liquidity and optimize the structure of fiscal expenditure. Second, the government should let the market play a bigger role in eliminating incapable business to stimulate the technological innovation capacity of the manufacturing industry, effectively reduce companies' burden of costs and promote the formation of a strong domestic market.
What measures should be taken if the country wants to further open up to the outside world?
With the Chinese economy shifting from high-speed development to high-quality growth, the country's opening-up has entered a new phase, seeking a larger scale and a deeper level. The fundamental requirement for any business or any investor is transparent regulation and rule of law, as well as addressing monopolies. It is critical to build up a healthy and sustainable business environment to demonstrate opening-up rather than any promotion or incentives.
What's the biggest challenge China faces today and how can the country overcome it?
The challenge confronting China is to ensure sustainable growth and development. China must tighten environmental protection, invest more in education and innovation, reduce local government debt to ease financial pressures, and promote creativity and productivity via greater competition.
What role has your company's business in China played in your global business?
Undoubtedly, the past 20 years in China have played an indispensable role in Endress+Hauser's global business and we have seen dramatic changes from China's early stages of reform and opening-up to the period of quality development.
We have rooted in one of the world's most populous countries - a market that has seen many demands from various industries and the highest degree of diversification for individual needs for more than two decades. Chinese market demand has offered us a broader market platform and enriched our understanding of global business.
Over the past 20 years, we have conducted business activities in China and also moved our production and procurement processes into the country.
What competitive advantages do you have in China and where do you think there is most demand for your products?
Personally, I think culture, technology and innovation are the labels of many multinationals for differentiated competition. This is also the direction that Endress+Hauser has always believed in and continues to invest in. We will deploy more resources and manpower to serve the chemical, oil and gas, metallurgy, building materials, municipal, sewage treatment, life sciences and power generation industries in China in the long run.
Investing in China's manufacturing, research and development facilities, and procurement activities will allow us to clearly grasp the exact needs of the Chinese market, such as product development, technologies and applications suitable for local needs. The Chinese market is vigorous and has great sustainability, and it also contains uncertainties and diversity. I believe this is a challenge as well as an opportunity for all companies.