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.

We do not have any problems like hard-landing, and we plan to expand investments in both the existing and the new business. A few reasons make us feel positive.

- The fundamental driving forces will continue to support domestic consumption and investment to a much-needed level;

- The Central Government still holds the key;

- Additional policy options exist, including additional pro-consumption policies, investments in infrastructure and service sectors, and structural tax cut, etc.

The China media industry at an annual growth rate of 15%, and Bertelsmann has been benefiting from China's emerging urban middle class, with its high purchasing power and affinity for all things digital. As of today, over 500 million internet users, 1,000 million mobile users, and an annual retail sales of 200 billion USD via e-commerce, enriches Bertelsmann's investment opportunities in the Internet, mobile services, e-commerce, online advertising and gaming sectors in China. This is especially true in the sectors of digital media and education, where we plan to invest more in future – worldwide, and also in China.

According to the PWC's 2012-2016 Global entertainment and media outlook, China now ranks as the third largest market for entertainment and media worldwide. The number of mobile internet subscribers is expected to reach 2.9 billion by 2016 with 1 billion of those in China alone, with rapid revenue increases on internet advert, film industry and online game market. We also feel that the government gives a lot of supports to media and cultural industries this year.

Bertelsmann already has strong market positions, most of our businesses with number 1 or 2 in their markets. We have enormous reach to hundreds of millions of people every day. 20 years ago we were one of the first Western media companies to begin operating in China. Active in this market for 20 years, we have established long-term relationships and a number of successful businesses. In the Chinese market we have three dimensions of growth, including expanding our existing businesses, expansion via growth platforms with global opportunities and increase both medium and long-term direct investments.

Bertelsmann established its first subsidiaries in China in 1992. Today all four of the Group's divisions have operations in China. For instance, Fremantle Media (RTL Group) has brought internationally successful TV shows such as "Got Talent," "X-Factor", "Hole in the Wall" or "Take me out" to China. Random House sells internationally successful titles in China - in print and e-book versions - and sells the translation rights to its English-, German- and Spanish-language books to Chinese publishers. Gruner + Jahr and its partner Boda jointly publish leading parenting, women's, men's and lifestyle magazines. Arvato, Bertelsmann's largest division in China, has a nationwide logistics network in partnership with international and Chinese corporations, and recently shipped its 100 millionth mobile phone in China.

Since 2008, our Bertelsmann Asia Investments (BAI) has acquired 20 stakes in promising new businesses with predominantly digital business models. BAI currently invests in performance marketing services, digital publishing, social media platforms and e-commerce solutions/CRM and online education. Three investments are already listed on the stock exchange.

Talent could be our most pressing challenge, as it is not easy to attract, develop, and maintain talented employees. We believe that the talented and committed people are vital to the success of Bertelsmann. A business program and career event called "Talent Meet Bertelsmann" was conducted by Bertelsmann China Corporate Center every year. We give opportunities to the campus students to meet Bertelsmann's top executives through various workshops. The selected students could work on life business cases and present their creative business proposals to our senior executives. The winning team will be sent to Germany to compete and exchange ideas with winning teams from other countries. . More importantly, we will offer the best talents internship opportunities at Bertelsmann's various business units in China.

We want to make Bertelsmann a place where ideas and plans become reality and modern forms of partnership can be put into action. We want to be the top destination for creative minds as well as entrepreneurs looking for a partner with whom they can turn their ideas into reality.

China will play an important role in Bertelsmann's future strategy as it has fast-growing market with great prospects, young and ambitious population and true entrepreneurship that we are willing to cooperate and partner with. We expect a more opened and healthy investment environment that could enable us to maximize our innovation and creativity in the Chinese market.

---- Annabelle Yu Long

Chief Executive, Bertelsmann China Corporate Centre

Managing Director, Bertelsmann Asia Investments

In the coming decade, China remains a fast economic growth, though not necessary the fastest market. For the next 5-10 years, China should still be the most important growth engine of the global economy, and also be the same strategic position from our company. This also depends on how fast and how much more of international companies coming to China and advertise in China. It also depends on how fast these MNC develop into the lower tiers markets as well.

The fact of increasing cost and slowing growth does not delay our investment plan in China, as comparing to the rest of the world, China still enjoys a strong position. However the strategic direction and consideration of how to invest in China will change according to the macro-environment change. Shorter term of planning and more flexible options are preferred for such a challenge. While acquisition remains a strategic option of fast growing in China as well.

In long run, we are forecasting a consistent double digit growth each year for the next 5 years, with a ratio of around 1.5 times of the advertising volume growth in China. However, as this is still an investment stage, the growth lies on more the revenue side rather than the profit growth. In 2012, the market really slows down but strategic change for the next few years has been redesigned to keep the performance growth in this market. For example, relocating the division to lower cost tier within China to enhance our cost competitiveness.


For advertising industry, our biggest concern is the sudden advertising regulation, including how it might affect the media like limitation of advertising air time for 2012 or the law that limit the creativity. The other concern is the lack of good local talents such as digital talents in China. We can manage the later area by investing in shipping in WW network talents and fast training of local talents.

For advertising industry, the openness of how the government support the creativity and content innovation, and the willingness to listen to the advertising professionals' need will be crucial for the development of this industry. And the support to upgrade the content industry like what Korean government did very successfully few years ago.

----- Steven Chang

CEO of ZenithOptimedia Greater China

In a recent survey among AmCham's China members, 78 percent of respondents selected China as one of their top three priorities for short-term investment and 20 percent of them consider the Chinese market their top priority. Compared to other parts of the world, China still offers more opportunities even with the country's economy growing at its slowest pace in the past three years.

EMC has strong confidence in China, evidenced by our continued investment in the market. The most recent example is we announced a partnership with Lenovo, representing a powerful opportunity for EMC to significantly expand our presence in China, a vibrant and very important market.

Information technology is undergoing a fundamental transformation that will reshape the industry landscape.

China's dynamic cloud opportunities are some of the world's most exciting and customers are often unencumbered by complex legacy systems, making them more agile and willing to take the leap into the cloud. We believe China will finally step out from the shadow of the United States and lead the world at the cutting edge of cloud computing deployments.

Innovation and technological capacity are fundamental to diversifying and upgrading product lines, and are crucial for the country's global competitiveness, but these capacities are still under-developed in China.

Foreign enterprises in China are looking forward to new reform momentum with the new leadership. Though China's softening growth may affect foreign business in the country, they still see "tremendous opportunities" in China's transition towards more efficient and sustainable growth.

Asia is no longer merely a source of comparative advantage based on low-cost labor, it is quickly becoming a source of competitive advantage based on management innovation. The Chinese government has proven its adeptness at driving economic growth, it would be encouraging to see more measures from the top that will allow innovation to develop and flourish.

----- Denis Yip

Senior Vice President, EMC Corporation

President, EMC Greater China

I think that China still has a great potential to grow even if European Union and US register a substantial slowdown. Whether it's gonna be double-digit growth is hard to predict but I have not doubt that the country can definitely outpace the major economies in moving forward.

Since 2007 Home Credit has already shifted its focus to Asia with China's market being its core footprint in the continent. our core competence, consumer finance to low and middle income citizens, complements very well all policies and measures taken by China's leadership to get domestic consumption boosted through citizens' propensity to spend.

On the contrary. We feel this is the momentum when Home Credit can successfully transfer its know-how and experience from CEE markets to China in order to assist the country's consumer finance to emerge as the industry. Based on successful business strategies from seven other markets Home Credit has tailor-made its business innovative concept to the China's specifics and continue to increase its presence in China.

This approach also includes additional investments into technological-driven back offices, customer service centers and world-class automated credit scoring and risk management technologies based in China. Completing the pilot phase of consumer finance licensed company in Tianjin, Home Credit is ready for national roll-out across provinces to prove that durable goods financing on credit may make the difference for both citizens' living standers and economy stimulation. The Home Credit's shareholders have committed to invest additional $500 million into China's operations provided the national roll-out comes true.

I am convinced that Consumer finance industry is emerging as one of the backbones of the national financial services. we discuss with the regulators to what extent Home Credit should grow to fulfill growing demand from customers as well as expectations of the Government. Home Credit is set to double the size of its business on an annual basis under certain regulatory preconditions: limitless geographic scope of operations within mainland China, enhanced product portfolio and an access to local currency funding base. We are cully prepared to keep growing and I hope it's gonna be the case next year.

Home Credit will continue to double the size of its business on an annual basis. Under the preconditions of extending geographical coverage within mainland China, enhancing product portfolio (which depends on the Regulator's decision) and supposed the easier access to local currency funding base happens, the growth of Home Credit lending can be significantly accelerated. We believe that there should be decision about further rollout made within next year. Actually we are fully prepared for the continuous growth.

Simply to keep the pace with customers demand....

China has already implemented policies aimed on increase in domestic consumption. this is our framework we build upon. I expect new impulses for the regulators on the working level to think together with the companies on how to speed up the implementation phase to get the goals achieved swiftly.

----- Michal Skockl

CEO, Home Credit China

Yes, I really think that China can maintain an economic growth at a rate that is more sustainable in the coming decade.

The government has attached more importance on the quality of the growth and the policy has been working out. Meanwhile, the priority will continue to be given to the consumption-led growth, though China'sGDPgrowth now still heavily rely on investment and export.

China is well positioned to withstand the global economic recession, and that's also true for Nielsen. China is one of the fastest growing markets for Nielsen's global business.

No, we will not delay or cancel any of our investment in China. And we didn't see our client move to other countries.

Instead, we will hire more people, probably increase our headcount by 10 percent next year. Right now, we have around 200 job vacancies available. And we expect to see a double-digit growth in both revenue and profit this year.

As most of our clients, both multinational and domestic ones, are going to continue to increase their investment in China, there is no reason for a slow down for our business growth in China.

And as an English saying goes: a rising tide would lifts all boats. China's fast growing economy provides huge growth room for the entire industry we are in, but we should also not underestimate the challenges.

Our major concern includes wage inflation and talent shortages. The average wage increase this year, I expected, will be above 8 percent, and that for last year is even higher. The growing labor cost, to some extent, will weaken our competitiveness.

Meanwhile, we are looking forward to talents that are not only academically excellent but also innovative and market-ready.


An open and transparent investment environment will help to fuel China's economic growth. And we hope the new leadership will continue to offer an open and welcoming attitude for foreign investors.

----- Yan Xuan

Nielsen Greater China President

By any objective measure, we're the undeniable leader for our industry in China. Our brand is the most connected, and we deliver the innovative products consumers want. We don't take our leadership position for granted - we know we have to earn it every day. And we do. We feel very good about our competitive position in China, and are confident in the enormous potential for our business in this market.

Thirty years ago, we started doing business in China. Today, like then, China defies predictions or timetables. What is certain is China offers more opportunity for NIKE today than it ever has. And we are completely committed to extending our leadership position here.

Some examples of our commitments:

The China Logistics Center in Taicang, Jiangsu province was built in 2011. The Center is Nike's largest distribution center in Asia. We also opened the largest Asia-based Nike Brand Experience Store in Shanghai at this end of September.

In the beginning of this year, we announced plans for the development of a new centralized campus for Nike's employees in Shanghai China. This new centralized campus will support our long-term business growth strategy in China. The nearly 600,000 square foot headquarters will allow Nike to elevate and expand on its facilities and capabilities, while bringing all of its Shanghai-based employees together from its portfolio of NIKE, Inc. Brands into one central campus.

We also signed Memorandum of Understanding (MOU) with Minister of Education in May, a three-year project that aims to change youths' perception of sports, allowing them to utilize its power of positive change in all areas of their lives. To do this, Nike will use its resources to help Chinese youth unlock their potential and ignite their love of sport.

Chinese consumers want clearer choices, more innovation and better services tailored to them.

Theretaillandscape is changing, and we're helping lead that. We're entering a new phase of distribution in China, with an emphasis focus on improving productivity in the Nike mono-brand stores, which is the dominant format in China. We have a head start here by applying the lessons we've learned in our own DTC business. This move is helping elevate how our brands and products are presented, and helping our retail partners improve their logistics and operations.

For consumers, we are delivering stronger assortments, better merchandising and seasonal story-telling that will have a strong category focus. We'll also leverage our Amplify Sport strategy that has been so effective in other markets around the world. These are the keys to expanding capacity and improving productivity for our retail partners, in our own stores and online.

We see much opportunity in China and have had much success here. We feel the market is changing and evolving at a rapid pace and we are confident we have the right strategies and a strong brand to deliver what Chinese consumers expect from Nike. We will of course continue to stay focused on our business fundamentals Brand, Product and Distribution.

----- Craig Cheek

vice president and general manager of NIKE Greater China

The Chinese economy is likely to have another 10-15 years of high growth ahead, on the level around 8 percent. Internationally this is a high growth, and China will in all aspects continue to be the growth engine of the world. The relative slow down seen during 2012 in some sectors is more a reaction to very high growth in earlier years, overall the Chinese economy will continue to develop strongly compared with the rest of the world, and will consequently become even more important for the SKF Group.

The growth the coming years we estimate around 8 percent per year, which is a much higher growth than in the rest of the world. Our investment plans are maintained with more factories being built and our new China Technical Development Center being built up.

SKF is serving over 40 different automotive and industrial segments, and consequently our development is very much a reflection of the general development of the Chinese industry. Some sectors have continued to grow strongly in 2012, others show a less good development. Overall we expect speed to stabilize during the coming months and then SKF will continue to grow with the Chinese industry.

To efficiently equip our customers in China with the SKF knowledge across so many growth industries.


A focus on a stable, continuous overall growth of the Chinese economy.

----- Erik Nelander

SKF China president