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Business / CEO roundtable on new normal

Bayer confident in a healthy growth in China

(chinadaily.com.cn) Updated: 2015-03-13 15:28

Editor's note: With the annual sessions of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference ending with a call to adapt to "new normal", chinadaily.com.cn sat down with global business leaders to get their views on the reform process and lowering of the growth target.

Here are the excerpts of Celina Chew, President of Bayer Greater China Group.

Bayer confident in a healthy growth in China

Celina Chew

What impressed you the most about the annual Government Work Report released during the ongoing two sessions of China's top legislative and advisory bodies in Beijing? What do you think was the most important issue raised by the government in this report compared with the previous sessions?

The part of the Government Work Report that left a deep impression is the clear statement regarding the two "medium-to-highs", namely, despite the slowing down of the Chinese economy and its focus on reform, it can still maintain a "medium-to-high" speed of growth and achieve a "medium-to-high" level of development.

Premier Li Keqiang emphasized that these double engines will drive development in China in the "New Normal", with its focus on encouraging mass entrepreneurship and innovation, as well as increasing access to goods and services in order to maintain and further improve living standards.

Bayer is happy to see the Chinese government's emphasis on innovation and improved livelihood. Innovation is very important to Bayer and has been a key factor in ensuring Bayer's success and sustainability for over 150 years. Innovation will continue to drive future growth at Bayer and help us fulfil our mission to deliver solutions that improve people's lives. With our sharpened focus on our Life Science businesses, Bayer Healthcare and Bayer CropScience, we will continue to strive to innovate in the research-intensive areas of human, animal and plant health. This strategy is very much in line with the Chinese government's aim for a "healthy China". Bayer is ready to contribute our expertise to building a healthy China, and develop innovative products that contribute to a better life.

In the Government Work Report, Premier Li Keqiang said that the nation's economic growth rate would be adjusted to 7 percent. Do you think your company should adjust its development strategy in China?

China's lower economic growth target of around 7% is accompanied by the aim of higher quality growth. The government plans to maintain a balance between steady growth and structural adjustments that will put the Chinese economy on a more sustainable path for the future. These structural adjustments will encourage new growth engines, driven by innovation and technology, and promote opening up. We believe that China's reform plans may bring better business opportunities and we will, of course, adapt our operations accordingly.

As to our overall development strategy in China, Bayer takes a long-term view. Greater China is Bayer's the third largest market, after the USA and Germany. It is the largest single market in the Asia-Pacific region and one of Bayer's key growth drivers. We see huge opportunities to expand our business in China and, at the same time, contributes to a better life for Chinese people. Our commitment to China continues. For example, this year, Bayer Healthcare will invest around EUR100 million to significantly increase the production capacity of its plant in Beijing to ensure that we can meet the demands for our products in the China market. Last year, Bayer acquired Dihon, a local company with excellent brands, so that we can offer consumers a broader range of options in key segments such as OTC dermatology and TCM. We plan to continue to invest in China and develop sustainable solutions for China's needs.

Amid the global economic slowdown, especially in developed economies, and China's economic adjustment, what is your greatest concern about your company's operations in China?

China's growth fundamentals are basically unchanged. China still holds great economic development potential and opportunities in many industries. We are optimistic about our future prospects in China. Bayer first came to China in 1882. We have set down our roots in China. In 2014, Bayer Greater China has more than 15,500 employees, and generated sales of around EUR 4 billion. Our mission "Bayer – Science for a Better Life" means that we aim to deliver products and services that benefit people and improve their quality of life. We also live this mission in China by contributing solutions that address some of China's needs such as medical and healthcare needs, safe and healthy food, and energy efficient solutions. We believe that, with our knowhow and experience, we can contribute to help China achieve its aim for sustainable and profitable growth. We are confident about, and committed to be part of, China's future development.

Which aspect of China's social and economic reforms should be improved in order to enhance the investment environment to attract more foreign companies?

Foreign companies are concerned with having a more transparent regulatory framework, consistent enforcement, more access to the China market and protection of their legitimate rights. With the draft revision of the Foreign Investment Law, China plans to significantly reduce the number of industries which are restricted in terms of foreign investment. Hopefully, this will mean more opportunities for foreign companies. Protection of the legitimate rights of foreign investors is also very important. For example, in order to encourage innovation in China and nurture an R&D-oriented culture, protection of intellectual property rights is very important. In addition, foreign companies would, of course, like to bring their innovative products to the China market and the support of the Chinese government in terms of a clearer regulatory framework and procedures is appreciated.

Do you think your company will develop faster in China than the previous year in terms of growth rate or market penetration?

By aligning our key businesses with some of China's most pressing demands and objectives, we believe are well-positioned to capture further growth opportunities in China. Bayer CropScience has been active for over 60 years in the Chinese agriculture sector and has consistently introduced new technologies to Chinese farmers, ranging from Decis, an insecticide introduced to China in the early 1980s, to recently, Luna Sensation last year. Luna Sensation is a fungicide used in a wide range of vegetables and fruit. These products help Chinese farmers increase production yield and manage their crop, and thereby, achieve better results and a better life. Looking ahead, we plan to launch over 20 new crop protection products in China by 2020.

In the area of healthcare, Bayer HealthCare currently has one of the richest pipelines in the industry and plans to introduce more innovative products in China in the area of oncology, cardiology, women's health, and diagnostic imaging, offering patients a broader range of treatment options.

We are confident that our business in China will continue to experience a healthy growth in the future.

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