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Views and hopes from top executives

(China Daily) Updated: 2012-11-10 09:58

Editor's Note: As the 18th National Congress of the Communist Party of China, which opened on Thursday, continues in Beijing, China Daily asked a number of top executives from international companies to give their impressions of the event and their expectations for the country. We asked five questions, and the answers we were given showed great confidence in China and its business environment under the country's new leadership, set to be elected at the congress.

Views and hopes from top executives

 

Q1: Given that China's economic growth cooled to a three-year low of 7.4 percent year-on-year in the third quarter, do you think the country can maintain relatively fast expansion during the coming decade? And do you think China will continue to be an important growth engine, both for the global economy and for your company?

Q2: As wages and operational costs rise, China's export growth is no longer as robust as it was, and domestic consumption is still not strong enough to generate as much growth. Have these developments prompted your company to either delay or cancel any investment plans in the country? If not, why?

Q3: What are the expectations for your company's performance in China this year and over the next five years, in terms of sales and profits, in manufacturing and services? How do you view the performance of the industry in which your company operates?

Q4: What is your company's greatest concern about doing business in China?

Q5: What measures do you expect from the new leadership to help improve the business environment for your business or your industry?

Peter Sykes

president of The Dow Chemical Co Greater China

Views and hopes from top executives

A1 We believe China will continue to serve as an important engine of growth for Dow and others - but a different kind of engine. As we have mentioned, China is now a transition economy. We believe the double-digit growth we have observed in the region will be replaced by significant but more modest growth over the 12th Five-Year Development Plan period (2011-15).

And, while growth in China is slower than what we have historically seen, we believe it will still outpace the growth of developed economies. This does not change Greater China's position as an important part of Dow's strategy. However, the addition of new capacity to support growth will always be managed to deliver the product supply when needed, as is the case in all other global markets.

A2 There continues to be demand for advanced solutions and products in China, and Dow is well-positioned to deliver these through our exposure to diverse end markets, as well as exposure to resilient and varied growth sectors including packaging, water, automotive, agriculture and electronics.

Dow continues to move ahead with growth initiatives in China, and we continue to carefully evaluate timing of these investments to match market needs. However, the broad direction remains unchanged. Domestic demand in China is closely linked to economic and social reforms, and we hope to see significant progress during the period of the 12th Five-Year Plan (2011-15).

A3 We have seen a significant slowdown in demand in 2012. We do expect a mild improvement in 2013 but think this will be only gradual, and this assumes no further global economic "shocks" which we cannot rule out.

The chemical industry reflects the broad economic base of the country, as we are a key supplier to many key industries - a number of which remain quite challenged. For the chemical industry to achieve its full potential, we need to see a broad-based economic recovery versus one more narrowly driven by government-sponsored infrastructure projects.

A4 We believe the major priority should be a smooth transition of leadership, and a strong commitment to implementation of the 12th Five-Year Plan together with ongoing economic and social reforms.

A5 We believe that the emphasis on driving "quality" of economic growth versus just "quantity" is a key principle which should continue to be emphasized.

The commitment to greater innovation and nurturing value-added industries will benefit Dow and many other multinational businesses to do business in China.

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