Sustainability at the heart of Schneider's strategy

Editor's Note: This year marks the 40th anniversary of China's reform and opening-up. China Daily interviewed top executives of well-known multinational companies for their views on the country's socioeconomic development.

European energy company partners with Chinese industrial enterprises to improve quality and efficiency

Please use three words to describe China's changes in the past 40 years.

Innovation, transformation and sustainability.

What are the biggest achievements in China since the introduction of the reform and opening-up policy 40 years ago?

China has experienced rapid economic and social development in the past 40 years. Since opening its doors to the world, China has created a unique model for the development of its market economy and established a dynamic business environment. As the world's second-largest economy, China has played an increasingly important role in the world and made great contributions to global growth.

Meanwhile, China has entered into the development stage of a middle-income country. Having grown up in China, I have personally witnessed the great improvements in people's living standards that have taken place over many years.

With the Internet Plus action plan, the booming digital economy is reshaping traditional sectors. This digital transformation has occurred across almost every major industry, setting an example for the rest of the world, and is demonstrating how innovation both fuels economic growth as well as changes people's lives.

While China's economy is moving towards a new phase of high-quality growth, its manufacturing sector also faces a transition from "Made in China" to "Smart Manufacturing in China". The fast-developing manufacturing industry is moving up the value chain. Through their active adoption of advanced technologies, China's manufacturers keep exploring the potential of digitization.

We have long taken the word "green" to describe our view on China's development. During this transformation, China is pursuing more sustainable development, not only in terms of its economy, but also from an environmental perspective.

How has your company benefited from the reform and opening-up policy?

In 1987, we established our first joint venture factory in Tianjin. At that time, it was only a small factory with fewer than 100 people. After 30 years, we have established a strong foothold in the Chinese market with 26,000 employees, three research and development centers, 26 factories and 40 regional offices across the country.

Schneider Electric is an active participant in and contributor to China's economic and social development. We have benefited significantly from China's reform and opening-up, and the country's accession to the World Trade Organization also brought a lot of opportunities for us. China is the second-largest market globally for Schneider Electric.

We have experienced different development stages of "sales in China", "made in China" and "research and development in China". We are growing with local companies. Jean-Pascal Tricoire, Schneider Electric's chairman and CEO, and many of our executive committee members are based in Hong Kong, enabling us to respond quickly to any changes happening here.

We are now pushing for two strategic transformations as a "leader of digitization" and an "expert of industry application". We are working closely with our local partners to explore the potential of digitization, thereby realizing industrial transformation and upgrading. Furthermore, many companies face a transition from a pure capital expenditure model to one that also involves operational expenditure.

Has competition intensified between your company and Chinese companies?

Digitization is reshaping almost every industry. The emergence of the internet of things is blurring the traditional boundaries that previously separated different industries. Internet companies can now step into the industrial sector. Industrial automation manufacturers can work with IT companies to develop digital solutions.

In the broader ecosystem, we are working closely with local companies with expertise in different industries and segments. Our EcoStruxure is an internet of things-enabled, plug-and-play, open and interoperable architecture and platform. We are connecting more customers, technology companies, developers and service partners into the innovation ecosystem. Our local partners include Alibaba Cloud and China Unicom.

We are also seizing more business opportunities with our partners in promising areas. For example, we have established a joint venture with CITIC Asset Management to establish a joint venture－Beijing CITIC-Schneider Smart Building Tech Ltd－to expand the market for smart buildings and comprehensive energy services.

How do you view China's role in the world today?

China is an important player in the global system. It is not only the largest single contributor to global growth, accounting for more than 30 percent of the world's economic growth, but also an active participant in global affairs. Facing the challenge of global climate change, China has committed to reducing its carbon intensity by 60 to 65 percent from 2005 levels by 2030, peaking its carbon emissions by 2030. The country is implementing a variety of measures to meet these goals.

The Belt and Road Initiative is pursuing the shared prosperity of countries along the route and has achieved fruitful results in the past five years. Schneider Electric has been pulling together our global resources－including our products, solutions, services, and experiences－to help our Chinese customers to tap into overseas markets.

We are dedicated to building a dynamic and strong ecosystem to connect players from different stages of the value chain to push for more in-depth cooperation and to drive green and innovative development in the Belt and Road-related economies.

Could China's experiences and practices be used to solve global problems?

Through the joint efforts of mass entrepreneurship and innovation, and the Internet Plus action plan, China has one of the most dynamic digital investment and startup ecosystems in the world. The rapidly expanding digital economy has become the new driver of China's economic growth.

At Schneider Electric, we have a commitment: "China for Global". This stands for introducing best practices from China to other emerging and mature markets, including specific business models, partnership systems, channel systems and talent development systems.

We think that China's insights and practices for developing its digital economy, including the government's guidelines to encourage market players' innovation, can be taken as a good reference for the rest of the world.

To facilitate innovation, we are creating a venture capital fund in China, focused on the fields of smart manufacturing, digital, artificial intelligence, and the internet of things to support the growth of startups.

What measures are needed if China wants to deepen reforms?

China is further liberalizing and facilitating trade and investment. We expect more opportunities to be created from green development, smart manufacturing, the Internet Plus strategy and the Belt and Road Initiative.

Sustainability is at the heart of Schneider Electric's strategy. We focus on how to apply digital solutions for energy conservation and emission reductions to help cities to develop in a greener way. We will continue our environmentally friendly circular economy approach in China. Second, we have a strong commitment to helping Chinese industrial enterprises improve their quality and efficiency.

Digitization is powered by electric energy and IT consumption is growing rapidly. With the deepening of Internet Plus, more data centers will be built, which will be a good opportunity for our IT business.

We will partner with Chinese companies to seize more opportunities along the Belt and Road routes. Opportunities can also be expected to result from China's coordinated regional development, such as its development plans for the Beijing-Tianjin-Hebei region and the Guangdong-Hong Kong-Macao Greater Bay Area.

What will be the country's calling card in the coming years?

Innovation, higher efficiency and quality, and sustainability.

Ongoing supply side reform is driving higher-quality development. The country will focus more on achieving quality and efficient growth rather than aiming for speed alone. Innovation will play a more important role in both the upgrading of traditional industries and the development of emerging and high-tech industries.

We are also expecting a more sustainable development model in China as the country is promoting the concept of innovative, coordinated, green, open and shared development to accelerate the implementation of the 2030 Agenda for Sustainable Development.