China's energy sector energizes Emerson

Zhao Dadong, the general manager of Emerson China. [Photo provided to chinadaily.com.cn]

Editor's note: The first quarter of 2015 is the beginning of China's "new normal" economy, meaning the nation is moving toward a slower, but more sustainable growth rate.

During the first three months, China's economic growth fell to a six-year low of 7 percent, buffeted by sharp declines in industrial production and real estate construction. Meanwhile, fixed-asset investment growth dipped to a historic low of 13.5 percent, compared with the average of 15.7 percent last year.

In March, China's industrial output growth dropped to a post-crisis low of 5.6 percent, down from 6.8 percent in the first two months of the year and from 7.9 percent in December. Year-on-year retail sales growth in March slowed to 10.2 percent, the lowest level since March 2006, compared with 10.7 percent in the first two months.

China Daily asked a cross-section of senior executives from a variety of multinational companies with operations in China to offer their thoughts on the "new normal" economy and their plans in the near future.

The answers from Zhao Dadong, the general manager of Emerson China. The US-based Emerson Electric Co is a leading global industrial technology and equipment maker.

Q 1) Although the GDP growth rate has fallen to 7 percent in the first quarter from 7.3 percent in the fourth quarter last year, the dip has not surprised the market. Some analysts have said the drop in growth rate is good for structural adjustment and transformation. What's your view?

As China is trying to rebalance, deleverage and de-capacity, a slowdown in GDP growth should be expected, but these actions are necessary for a more sustainable growth. We are also seeing the government taking various measures to maintain growth, which creates opportunities for companies like us.

Under the "new normal," companies have to examine their processes, product profiles and business models, and adjust their strategy so they are more efficient and competitive. We're seeing growing interest in China Manufacturing 2025 or Industry 4.0 and the digital revolution in manufacturing and business. Both the "new normal" and "China Manufacturing 2025" provide opportunities. For example, our process management business focuses efficiency so the need for more efficiency and connectivity throughout industrial plants or to remote sites is good for us.

Q 2) In March Premier Li Keqiang announced a growth target of "around 7 percent" for 2015. Do you think the target is achievable, especially when both the global and domestic economy aren't picking up as fast as they should?

Achieving a growth rate of around 7 percent will be challenging considering the economic headwinds globally. Our own expectation is that China's growth rate will be modest but steady. China's continued focus on infrastructure development and a consumer-centric economy will be positive components for growth.

Q 3) What are your biggest concerns regarding the economy?

We're still optimistic about China. China has been Emerson's second-largest market after the US since 2002. We have confidence in China's ability to further its reforms and build up a more efficient and healthier growth model. The key now is for companies to adapt and get even smarter about developing their competitive advantage. In our case, we have an "in China, for China" strategy that translates into ongoing investment and product and technology development specifically for the market so we meet the needs of our Chinese customers.