Riding on the ‘smart cities’ plan in China.
Editor’s note: With the annual sessions of the National People’s Congress and theNational Committee of the Chinese People’s Political Consultative Conference endingwith a call to adapt to “new normal”, chinadaily.com.cn sat down with global businessleaders to get their views on the reform process and lowering of the growth target.
Here are the excerpts of Dr. LIN Liangqi, President of AkzoNobel China and ManagingDirector of Decorative Paints China and North Asia of AkzoNobel.
What impressed you most about the annual Government Work Reportreleased during the ongoing two sessions of China’s top legislative andadvisory bodies in Beijing? What do you think is the most importantissue raised by the government in this report compared with theprevious sessions?
We are impressed by the pragmatic and target-driven 2015 annualGovernment Work Report.
We are pleased to see that “smart cities” are included in the Government WorkReport of the Premier. He said that “we will develop smart cities and protect historical andlocal culture.” This is where AkzoNobel’s Human Cities initiative comes into play.
Built around six main pillars – color, heritage, transport, education, sport and leisure, andsustainability – Human Cities highlights the key issues that cities around the world need tofocus on in order to become more resilient and better equipped to cope with the challenges ofthe 21st century.
In China, the speed and magnitude of urbanization is significant, with 68 percent of thepopulation – that’s around a billion people – expected to live in cities by 2030.
AkzoNobel has long been helping communities worldwide to create better environments inwhich to live and work by providing innovative and sustainable solutions and products.Human Cities builds on these activities to establish a strong platform for us to positivelyinfluence the process of urban transformation that’s taking place.
In the Government Work Report, Premier Li Keqiang said that the nation’s economicgrowth rate would be adjusted to 7 percent. Do you think that your company shouldadjust its development strategy in China?
For AkzoNobel, China has always been an important strategic market in our global strategyand contribute to realize our global visions. 7% GDP growth is still one of the fastest growthrates among the global economies. China’s mega trends are huge opportunities forAkzoNobel and we are committed to using our expertise and innovations to support Chinaachieve success in its evolving urbanization process, whilst growing our businessessustainably and responsibly.
As said, the speed and magnitude of urbanization is significant in China. Also, in a bid toimprove people’s livelihood and spur economic growth, China will begin construction of sevenmillion apartments under the affordable housing program in 2015. In terms of consumption, it isestimated that the overall purchasing power parity (PPP) in China is expected to quadruple inthe next 10 years. This will certainly result in great business opportunities in consumer-relatedsectors. As environmental concerns are growing among all parties in the country, solutionswith better performance and sustainable features will be well-received by the local market andcustomers.
We are committed to continuing our investment momentum in China and providing oursustainable and competitive coatings and chemicals solutions to all four end-usersegmentations, Buildings and Infrastructure, Transportation, Consumer Goods and Industrial.
Amid the global economic slowdown, especially in developed economies, and China’seconomic adjustment, what is your greatest concern about your company’s operationsin China?
The ability to keeping pulse of local market development and meeting changingcustomers/consumers’ needs are top priorities of all international companies. The Chinese”new normal” will bring opportunities for all companies, but how to take the lead in capturingthe market share with most competitive solutions, which are outstanding in both performanceand sustainability features, will be key to future growth.
In a bid to provide tailor-made solutions for Chinese customers, we keep on reinforcing ourlocal RD&I capabilities for innovation. In June, our new €6.5 million-investment developmentand application center in Shanghai will be put into use. Meanwhile, we are expanding ourpresence in China by establishing new production facilities in Shanghai, Changzhou, Ningbo,Guangzhou and Chengdu, etc., in order to provide close services to customers.
Also, in a bid to provide the most competitive coatings and chemicals solutions to customers,we are committed to pursuing operational excellence and reducing our business costs by allmeans. We believe, great support from central or local governments on regulatory support,such as reduction of transaction and business cost including tax, or employee retentionpolicies for companies, which are leaders in sustainability, will be very welcomed.
Which aspect of China’s social and economic reforms should be improved in order toenhance the investment environment to attract more foreign companies?
Just as same as all local residents, we are expecting to see improvement in our livingenvironment, with clearer air and cleaner water around us. These are basic requirements thatpeople can work and live in cities safely and happily, and for any company’s sustainablegrowth in China. Of course, this requires everyone’s efforts, from government regulations topeople’s way of living in every day.
Do you think your company will develop faster in China than the previous year in termsof growth rate or market penetration?
AkzoNobel launched a new strategy that focuses on end-user segments, operationalexcellence and sustainability and is summarized by the company’s new vision: Leadingmarket positions delivering leading performance. In China, we are carrying out the strategy infull swing, and pursuing a quality and sustainable growth, rather than just volume growth.