China vital engine for global economic growth

Editor's Note: With strong policy support, unremitting technological innovation and industrial upgrading, China's economic recovery continued to gather steam in the third quarter, with its GDP expanding by 4.9 percent from a year earlier, leading to a 5.2-percent year-on-year growth in the first nine months. China Daily presents a series of Q&As with top multinational corporation executives, discussing their perspectives on the Chinese economy and how they will position future business in China.

Q1 Given the complex current global economic and geopolitical situations, how do you position the Chinese market in your overall global business radar? What's your outlook for China's economy and your company's operations in the country for this year and next?

PEI: Although the global situation is complicated with some uncertainties, our confidence in China remains unchanged. As a global pharmaceutical company that entered China in 1994, Astellas had been a witness and beneficiary of the significant changes and opportunities in the Chinese market. In the pharmaceuticals sector, China has been expanding very fast, mostly driven by its large population and spending on healthcare, as well as increased public awareness about health. China has always been a vital market for Astellas' global growth and has now risen to be one of our global strategic markets based on its strong performance and strategic significance. China presents us with market potential, as well as opportunities to promote and accelerate innovation with our global expertise.

WANG: Over the past few years, LinkedIn's B2B business has achieved considerable success in China. Our talent solutions business has grown fivefold in the last eight years, while LinkedIn Marketing Solutions has doubled in size. Amid an ongoing global economic slowdown, we are glad to see that Chinese foreign trade continues to demonstrate its competitive advantages. Exports have become an important engine driving economic growth.

Given the uncertainties in the global business environment, Chinese companies seeking global development are also facing evolving challenges, which pose new requirements for their capabilities and competitive advantages in all dimensions, from global strategy formulation to local organization and talent team building, from brand marketing to operation compliance.

We will continue to have a presence in China and remain committed to helping China-based enterprises achieve their international business goals, tapping into LinkedIn's global professional network of more than 1 billion members across the globe, and through our talent, marketing and learning solutions.

HA: China remains a strategic market, not only for our firm and our clients, but also for the world. Chinese businesses are constantly adapting to change and we've witnessed their efforts to invest overseas and expand into new markets. Mayer Brown continues to serve companies seeking to expand their global footprint by advising them on the legal complexities and opportunities as they map their investment efforts in unfamiliar jurisdictions. We believe there's still strong demand for legal skills like ours, where our experience in cross-border transactions, coupled with a strong understanding of Chinese culture, enables us to act as a bridge for our clients as they navigate the risks.

WONG: Given that 20 percent of the global population is in China, growing and investing in China and the wider Asia-Pacific region are essential if we are to fulfill our purpose of building a safer, cleaner and healthier future for everyone, every day. Our strategy, "Grow in China, accelerate APAC", focuses on China as the core to accelerate our organic and inorganic growth. The opening of our Halma APAC Integrated Production and R&D Center this September is a strong proof point of our strategy and long-term commitment. It will be part of our growth enabler to accelerate innovation, collaboration, partnership and localization.

Q2 Are you confident about the Chinese economy over the long run? How would you rate your confidence in the Chinese economy?

PEI: We have strong confidence in China's economy. With its continued efforts to boost the economy post-COVID-19 and a persistent policy of high-quality development, we believe that China will see more vitality in its economy in the future.

At Astellas, we are committed to turning innovative science into value for patients. The demand for high-value, patient-centric healthcare solutions in those areas is on the rise, mostly driven by a large population and spending on healthcare, as well as increasing public awareness of health. In addition, we see China's strong commitment to innovation, and the innovation and creative potential of the whole society should be unleashed to the greatest extent. Innovation is the backbone of the pharma business. It is very encouraging for Astellas as a global innovator to further accelerate patient-centric innovation in China.

WANG: Today, as the global economy seeks to accelerate its restart, we are delighted to see that China has maintained its leading position. According to the latest data from the National Bureau of Statistics, China's GDP grew by 5.5 percent year-on-year in the first half of this year. As we enter the second half, many international organizations and institutions, including the United Nations, the World Bank and the International Monetary Fund, have raised their expectations for China's overall economic growth in 2023. China continues to be an important growth engine of the global economy.

We are confident in the long-term growth of China's economy. We believe that China's opening-up measures, continuous optimization of the business environment, sci-tech innovation, globalization of local business and other government efforts contribute to its economic growth.

HA: China has experienced exponential growth over the past decade and it is time for the economy to transition beyond manufacturing into a more mature and sustainable model. We are fully confident about China's long-term growth story, given the robust and supportive domestic policies in place and the entrepreneurial spirit and drive of the people. All these factors will continue to propel the economy and help China weather any short-term challenges. Sustainability is one example of positive change, and we have seen ambitious targets for China's transition plan as well as efforts to grow related industries such as electric vehicles, green finance, renewable energy and more.

WONG: At Halma, we build on our strategy for decades, not days. The Asia-Pacific, especially China, is a strategic market and growth engine for Halma for the next decade and beyond. We think that the Chinese market has huge potential and opportunities.

The "Healthy China 2030" plan sets out China's hugely ambitious long-term commitment to solving the challenges brought about by industrialization, urbanization, an aging population and the increasing prevalence of chronic lifestyle diseases. We provide leading technologies and digital solutions in health assessment, therapeutic solutions and life sciences. They can help our customers in China meet rising healthcare demands, tackle preventable diseases, and contribute to improved patient outcomes. In this way, we will live our purpose and build a healthier future for everyone in China.

Q3 China's economic policymakers have assured greater efforts to attract foreign capital, widen market access and ensure a level playing field for both domestic and foreign companies. In this context, what new policy measures do you expect from Chinese authorities in the near future?

PEI: We appreciate the consistent progress regarding the business environment in China. For a global company, a more market-oriented, rules-based and internationalized business environment that will not only bolster the continuity of business operations, but also inject momentum into the pharmaceutical market, is always expected.

As one of the most important emerging pharma markets, China is dynamically transforming toward enhancement of its innovative healthcare system, beyond its size of market growth.

In my opinion, an established reward system for innovation will boost the high-quality development of this industry, push forward an industry upgrade, and ultimately improve the health of the Chinese people. We expect more efforts to expand patient access to innovative drugs, and a continuously improved business environment, which will give us stronger confidence to turn innovation science into value for patients in China at a faster pace.

WANG: China's commitment to high-standard opening-up and an improved business environment for foreign investment has boosted the confidence of MNCs including LinkedIn. We believe in the potential, resilience and long-term sustainability of the Chinese economy.

We are excited that China's government officials have made efforts to strengthen global cooperation and support Chinese enterprises to go global. We look forward to seeing more policies and initiatives that further promote China's opening-up and closer international cooperation.

We will take advantage of the business opportunities arising from these measures and continue to support Chinese companies to take up a significant position in the global market and contribute to China's high-quality development.

HA: It's vital to continue to have the kind of legal structures that can help to promote both inbound and outbound investments and to foster an environment that allows for innovation. We have seen several encouraging signs of such frameworks and expect more to come.

For example, with cooperation increasing within the Guangdong-Hong Kong-Macao Greater Bay Area, mechanisms have been proposed to drive the digital economy and facilitate data transfers to reduce compliance costs for businesses. This can be particularly helpful to Hong Kong companies with a Chinese mainland presence.

In addition, we've also seen an increase in intellectual property rights protection in general, in terms of patent applications, foreign company innovation patents registered and an increase in IP royalty trade. Building trust in such areas will encourage more companies to bring their technological know-how to China and positively drive innovation.

WONG: As the world's second-largest economy, China has demonstrated strong resilience despite the challenging political and business environment. China reaffirmed its commitment to high-level opening-up and emphasized the need to make greater efforts to attract and utilize foreign capital, widen market access, promote the opening-up of the modern services sector, and grant foreign-funded enterprises national treatment at the annual Central Economic Work Conference held in December 2022.

Today, China is one of the world's biggest investors in renewable energy sources. From efforts to keep the sky blue and the water clear, green development is now a key strategic policy for China. By providing technologies that monitor and protect scarce natural resources, we help our customers create a more sustainable future.

Q4 As China continues to pursue high-quality development through a homegrown path to modernization, what is the vision for your company's business in the country over the long run? What business opportunities do you foresee emerging as part of the process of Chinese modernization?

PEI: There has been high-quality development in China's pharmaceutical market, changing from one dominated by generic medicines to one driven by innovation, with strong and beneficial policies of the Chinese government transforming the entire industry.

Astellas sets a strategic focus on the breakthroughs of oncology, innovative drugs and therapies. We have been accelerating the introduction of our innovative drugs and improving access to benefit Chinese patients.

We will continue to focus on market development, industrial upgrades, innovation and creativity, quality, efficiency enhancement, and so on. We will also continue to work with government and local partners to lead the innovation and service upgrade of the Chinese healthcare industry toward the achievement of "Healthy China 2030" and support the high-quality development of the Chinese economy.

WANG: In the context of China's pursuit of further modernization, we believe that globalization has become an increasingly important strategic direction for more and more Chinese companies, which unleashes Linked-In China's business potential.

In 2023, we shifted our local business focus to assisting companies operating in China in finding skilled international talent and marketing their products and services overseas.

Our business mainly focuses on these three areas: LinkedIn Talent Solutions helps Chinese companies create competitive international talent strategies and achieve more efficient talent-hiring; LinkedIn Marketing Solutions supports Chinese enterprises in accurately reaching their target audience in overseas markets and creating a cohesive brand and marketing effect; LinkedIn Learning Solutions helps Chinese companies promptly identify and empower employees with essential skills and respond swiftly to market changes.

According to data from third-party research institutions, there will be approximately 59,000 Chinese go-export companies establishing branch offices in overseas markets with 4.5 million employees by 2024.These companies are our target customers. Thus, we are fully confident in the future development of our business in China.

HA: In terms of opportunities, we've seen many sovereign wealth funds setting up dedicated funds to invest on the Chinese mainland, and we've also heard of interest from Middle Eastern funds looking to invest in high-tech and renewable energy industries. With our networks and connections in the Middle East and the work we've done advising Middle East clientele on their legal presence in China and beyond, we expect further inflows on this front. In the Greater Bay Area, we expect the insurance sector to grow further, given the large population and low penetration rate. Mayer Brown works with nearly 400 insurers and insurance-related entities worldwide and we anticipate a future increase in services, contracts and merger and acquisition activity in the sector.

WONG: We see many new emerging trends and interesting opportunities where Halma's companies could play substantial roles, including safety technologies that power the clean energy transition, eye care, smart wastewater technology and digital health.

These new trends are what we're keen to tap into globally and in China, as they're highly aligned with our purpose of growing a safer, cleaner and healthier future for everyone, every day. I believe that we will see more such opportunities in the China market while it continues to pursue high-quality development, which also explains our strategy here — Invest in China, empower APAC growth.

Q5 Could you share with us one or two of your successful business or personal stories in the process of growing with China?

PEI: We will continue to leverage China's favorable policies, and work with the government and all partners to accelerate our life-changing innovations at a faster pace over the next three to five years. This will enable us to address highly unmet medical needs in China.

WANG: Recent LinkedIn data show that the skill sets for jobs have changed by around 25 percent since 2015, and this number is expected to reach at least 65 percent by 2030 due to the rapid development of new technologies such as AI.

We believe that Al will accelerate workforce learning and increase the importance of skills. According to LinkedIn Data Insight, companies that support upskilling and embrace Al will have the most success in attracting and retaining top talent.

Adopting a skills-first approach to talent management is the best way to expand talent pools, upskill current employees, and build workforce agility. To support this approach, we brought LinkedIn Learning Solutions to the Chinese market in July this year, helping employees of Chinese companies to comprehensively improve in-demand skills.

To help Chinese companies promote the learning and development of AI skills, LinkedIn will open up the top 10 most popular AI-related courses among global companies for free to Chinese enterprise users before Dec 15, 2023.

HA: I started working as a trainee solicitor in the early 1990s when there was an increasing interest in inbound investment in China. I assisted clients in forming numerous cooperative joint ventures and equity joint ventures in various industry sectors. We were one of the pioneers from Hong Kong working with our colleagues on the mainland. We have continued that journey since — from mergers and acquisitions to helping clients navigate the regulatory environment. It is amazing how the growth and development of China's legal and regulatory system have helped to craft my professional journey.

I'm also grateful to be in Hong Kong, which serves as a gateway into the mainland with close links to the Greater Bay Area. I have the privilege to witness all the new developments and be the first on the ground to help clients in capturing the opportunities, both inbound and outbound.

WONG: Since the reform and opening-up, China has experienced the largest and fastest urbanization in world history. Safety is one of the top priorities in both the 14th Five-Year Plan (2021-25) and the 2035 long-term target. Our safety sector brings advanced safety technologies, including fire detection and suppression, people and vehicle flow monitoring, industrial access control and much more. We leverage global technologies across a range of critical industrial and logistics operations for cities in China, enhancing their abilities of urban governance, as well as protecting people and assets at work.

Nancy Wang country manager at LinkedIn China