Adapting to customers' needs is important

Advisory and tax capabilities have increasingly been key focus areas in Deloitte's business

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.

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

Remarkable, unprecedented and transformative.

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

What China has accomplished over the past 40 years is remarkable. Improving the lives of 1.3 billion people in the way that China has, I do not think it is anything that has been seen in human history before.

We have seen Chinese companies and businesses grow and thrive. I am proud of Deloitte's contribution to that, and we want to help our clients get to the next level.

What's the biggest challenge China faces today and how can the country overcome it?

I believe that to deepen reform and meet environmental challenges are the two biggest challenges China faces. The country is looking to further reform the market and the economy in order to sustain growth－and rightly so.

Growth over the past 40 years has been fueled by globalization and an export-oriented mindset. China is very important to the global economy, but shifting toward higher reliance on domestic consumption is going to be vital as well.

How has your company benefited from the country's reform and opening-up?

Deloitte has been in China for 100 years. We just celebrated our 100th anniversary in 2017. The past 40 years have been momentous, certainly in China, but also in terms of our results.

Deloitte, as a global professional services firm, has done its small part in contributing to China's momentous growth and certainly benefits from it. We have seen Chinese companies and businesses grow and thrive.

What measures are needed if China wants to deepen reforms?

I think opening up the domestic market is going to be important, meaning making the domestic market more transparent and more accessible to global brands. Certainly, putting incentives in place for Chinese companies to be more consumer-oriented is going to be important, because that is where the growth will come from.

What is your advice for multinational companies that are starting to tap the Chinese market?

The Chinese market offers huge opportunities. Serving 1.3 billion people is a tremendous opportunity for any global enterprise or brand. But, they need to realize Chinese consumers are very discerning. They move at their own pace and you cannot impose global expectations on China.

Localization will be critically important for global brands, without losing some of the value they have. So adapting to local customers and local needs is going to be incredibly important.

Our practice here is very localized. We have 16,000 people, we are growing at double-digit rates, and I expect that in the next five years we will be twice the size we are today in China.

What are the most significant trends in Chinese companies' M&A practices globally?

Today, Chinese firms are not only selling products and services, but also becoming truly global brands and entities, and M&A has become a very important part of that.

They will need to go out and acquire assets globally. ChemChina acquiring Syngenta AG is a very good example. We will see Syngenta-type transactions increasing, with more Chinese companies becoming global entities and big global players. We will also see smaller unicorns getting involved. So, M&A is going to be a very important part of the growth story for Chinese companies.

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

China traditionally has been called the manufacturing hub of the world, and manufacturing is certainly going to be important to China, but the country is rapidly becoming a technological hub. Many technological leaders, such as Alibaba, Tencent and SenseTime, have originated in China.

What are the biggest changes you have witnessed in Chinese companies going global?

Chinese companies－not only private enterprises, but also State-owned enterprises－are looking to become global leaders. Increasingly, it is about taking Chinese companies and bringing in expertise not just to efficiently serve the domestic market, but to go beyond that and to help them become true leaders.

Our Chinese clients keep asking how to make their products world-leading. That is a shift in mindset, with Chinese companies increasingly becoming true global players and leaders. It is a tremendous opportunity for firms like Deloitte. We are not only helping global brands to come to China, but also taking Chinese companies and helping them to take their rightful place as global leaders.

What's the plan for Deloitte in China in the coming five to 10 years?

One of our strategies is to tilt toward Asia and toward China, because it is the right thing to do. We certainly will remain a world-class audit firm, but our advisory and tax capabilities have increasingly been key focus areas in our business. In China, that is where a lot of our growth is coming from.

We are also increasingly using technology to solve difficult issues. Deloitte has core capabilities not only from an advisory standpoint. We are also able to implement and orchestrate the ecosystem around particular areas, such as smart manufacturing and the future of work. That is where we are focusing and will be making big investments.

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

Big data is going to be huge in China, I believe. Every time I come here, and I come many times a year, I spend a lot of time with clients. Recently, I spoke to a very large tech company. The opportunity for AI-based customization is huge in China. However, the company said it is currently a challenge to organize data. Once data gets organized－and it will－the potential is going to be enormous

CV

Name: Punit Renjen

Age: 57

Nationality: American

Career:

2015-present: Deloitte Global CEO

2011-15: Chairman, Deloitte LLP (US member firm)

2009-11: CEO, Deloitte US Consulting LLP

1987: Joined Deloitte

Education: Master's degree in management, Willamette University, United States

Family:

Married with one child