Editor's Note: These interviews with CEOs of major foreign firms gauge their outlook for the Chinese economy, their operations in China and their business plans for 2024 and beyond, in the wake of the momentous resolution adopted at the third plenary session of the 20th Communist Party of China Central Committee in mid-July.
Q1: The third plenary session of the 20th Communist Party of China Central Committee in mid-July has rolled out the reform and opening-up roadmap for the Chinese economy in the coming years. What are your major takeaways from the plenum? What are the biggest opportunities you spot in China's new measures to deepen reform and further open up its economy? How do you plan to capitalize on these opportunities in your specific industry?
LI: China's economy is transitioning from high-speed development to high-quality development, and the third plenary session of the 20th Communist Party of China Central Committee said China will improve the mechanisms supporting the development of innovative drugs. With pricing and payment reforms widely anticipated, we believe that, driven by favorable policies, China will continue to unleash the market potential of innovative drugs. Currently, Cytiva provides comprehensive end-to-end solutions for producing antibodies, mRNA drugs, viral vectors, cell therapies, small nucleic acid drugs and other novel therapies. Through localizing innovation, commercial operations, and supply chain and manufacturing, we hope to further accelerate our response to the development needs of local biopharmaceutical companies, helping more Chinese innovative drugs enter global markets.
L. WANG: AstraZeneca sees significant market and policy opportunities in China's new opening-up measures. With the increased opening-up of the medical field, AstraZeneca will be able to participate more deeply in the Chinese market. In addition, the government's active support for foreign-funded biopharmaceutical projects has provided AstraZeneca with more policy preferences and convenient conditions.
AstraZeneca will seize these opportunities to promote the research and development and launch of innovative drugs, and deepen cooperation with local companies and scientific research institutions to jointly promote the development of China's biopharmaceutical industry. Moving forward, as a localized multinational company, we are thrilled to embrace innovation in China and foster East and West combined innovations to benefit patients in China and worldwide.
N. WANG: China's new, more sophisticated open economic system promises an enhanced business environment for both domestic and foreign firms. This should enable foreign enterprises to better navigate and adapt to the Chinese market, facilitating the localization of their products and services.
As China continues to pursue high-level opening-up and refine its business environment, LinkedIn is committed to increasing its investment in the country over the next decade. We aim to collaborate with Chinese enterprises in navigating the challenges and opportunities presented by globalization, and supporting their pursuit of higher-quality growth in the global marketplace through building a cooperative partner ecosystem that strives for win-win outcomes.
ZHAO: We are very much impressed by China's ambition, determination and action manifested by China's new measures to deepen reform and further expand high-level opening-up, which reassures MNCs' investment for long-term development in China, including Astellas.
Our vision is to turn innovative science into value for patients. When we saw China's emphasis on improving people's quality of life, pursuit of innovation, and priority on policy and governance support for strategic industries like biomedicine, I would like to say we share the same priorities and purpose with China. Astellas will continue to invest in and evolve with China, to help improve quality of life for Chinese patients with our global leading innovations. Meanwhile, we will strengthen ties with stakeholders to accelerate what we do, to promote high-quality development of the healthcare industry in China for Chinese people's well-being.
Q2: In your view, how will the reform and opening-up measures rolled out at the plenum help strengthen the Chinese economy and bolster its prospects of achieving modernization? Do you think China's new reform and opening-up blueprint will make fresh contributions to the global economy? If yes, how?
LI: The third plenary session of the 20th Communist Party of China Central Committee vowed to steadily expand institutional opening-up in the future, aiming to foster a first-rate business environment that is market-oriented, law-based, and internationalized as well as protect the rights and interests of foreign investors in accordance with the law. This undoubtedly brings confidence to foreign enterprises like Cytiva. We will firmly establish our presence in China, promote the high-quality development of the Chinese biopharmaceutical industry, and further inject momentum into the development of the global economy.
L. WANG: The reform and opening-up measures will shape the future pathway of both the Chinese and the world economy in a positive way. We're pleased to see that openness and collaboration have been given priority in the government's agenda, which will promote international collaboration and cooperation in many aspects.
In addition, there have been frequent mentions of technology and innovation, especially with regard to technological breakthroughs, industrial transformation, and the development of high quality productive forces. Technology and innovation play pivotal roles in the pharmaceutical industry and will lead to the creation of new molecules, medicines, models, and more, further enhancing China's competitiveness in global markets, including the pharmaceutical industry, and ultimately benefiting the unmet needs of patients in China and beyond.
N. WANG: The reform and opening-up measures will attract an increasing number of foreign companies and capital into the Chinese market. While promoting the global flow of technology and resources, these measures will also help China achieve its unique path to modernization. China's comprehensive advantages for attracting foreign investment remain prominent, including its super-large market scale, well-established supply chain, advanced infrastructure and abundant human resources. These factors continue to offer immense development opportunities, making China a market that demands great attention from foreign companies like LinkedIn. LinkedIn believes that by enhancing economic resilience, promoting technological innovation and pursuing sustainable development, China is not only driving its own progress, but also injecting strong momentum into global economic growth.
ZHAO: China's approach to promoting reform and opening-up is holistic and comprehensive. It will help establish a solid infrastructure to strengthen the Chinese economy — the world's second largest — and to achieve Chinese modernization.
Taking the healthcare industry as an example, we have seen ongoing modernization happening in China's drug regulatory framework and innovation ecosystem, harmonizing with international standards. Since coming to China 30 years ago, Astellas has witnessed huge changes in the country because of the reform and opening-up.
With China's unwavering pursuit of innovation as stated at the plenum, we expect a more favorable environment for pharmaceutical innovation to thrive, bringing more vigor and vitality to the dynamic and huge healthcare market in China. The strategic industry has the potential to play an increasingly significant role as a key contributor to the growth of the overall Chinese economy, and to the global economy when China's door opens wider.
Q3: How do you view China's new reform initiatives aimed at fostering new quality productive forces, such as those to encourage industrial upgrade and technological innovation? Do you see these as opportunities or challenges for foreign enterprises, and why?
LI: Biopharma itself is representative of new quality productive forces, and the upgrade of the industry toward better standardization and digitalization aligns with the government's goal of promoting high-quality growth of the domestic economy.
The new reform initiatives will inject huge momentum into the biopharmaceutical industry. At the same time, technological innovation is key to building new quality productive forces, presenting significant opportunities for Cytiva.
L. WANG: I take these as opportunities for the pharmaceutical industry. First, innovative research and development are the core driving forces of the biopharmaceutical industry. Therefore, AstraZeneca continues to accelerate the research and development of innovative drugs and promote innovative results to benefit the world. Remarkably, over the past 12 months, AstraZeneca has entered into global licensing cooperation agreements with nine innovative Chinese pharmaceutical companies worth more than $6.5 billion.
Second, innovative full disease management solutions will benefit more patients in China and around the world. AstraZeneca actively promotes innovations in integrated diagnosis and treatment models, which have been implemented in thousands of hospitals in China and some of these solutions even "go global".
N. WANG: China's vigorous pursuit of "new quality productive forces "aims to foster an innovation-driven economic growth model centered on technological advancement. We view this not only as a signal of China's readiness to face the challenges of globalization and technological revolution with greater openness, inclusivity and innovation, but also as a reflection of its forward-thinking approach to the impending transformation of the labor market, presenting opportunities for foreign enterprises, including LinkedIn.
LinkedIn has observed that the Chinese government has taken a series of measures to promote the healthy development of the labor market. For instance, driving industrial upgrading and structural adjustments to create more employment opportunities is a key means to realize new quality productive forces.
ZHAO: Science and technology innovation is a driving engine for new quality productive forces. I believe, with the new reform initiatives, China will nurture an even more pro-innovation environment, further unleashing its innovation potential.
The last decade has seen a constantly improving policy environment, dedication to innovation, and investment in healthcare talent in China, which has led to innovation and industrial upgrade. We are also a beneficiary and a participant from the evolving environment. One example is that Astellas China achieved a couple of "firsts" in the history of the company over the course of one year.
I believe the momentum of upgrades and innovation will continue with China's strategy to drive new quality productive forces. We see opportunities here. We will be more than happy to play our part with our strengths to contribute to the development of new quality productive forces in China while delivering on our commitment to Chinese patients.
Q4: While China is expanding opening-up, some are concerned that geopolitical tensions, rising protectionism and global supply chain adjustments may weaken China's attractiveness to foreign companies. What's your take? How important will China be for your global business in the coming decade? What more opening-up measures can China take to offset the impact of the complex external environment?
LI: China is the world's second-largest pharmaceutical market and our second-largest market as well. With decades dedicated to the Chinese market, Cytiva takes accelerating localization in China as one of our key global strategies. Through localization of innovation, commercial operations, and supply chain and manufacturing, we aim to empower Chinese enterprises as their best partner to reduce costs, increase efficiency, and innovate comprehensively.
The conference emphasized the need to foster a fairer and more dynamic business environment and improve the property right protection system, and we firmly believe in this. We look forward to the continuous improvement of the business environment, which will further boost international confidence in the Chinese economy, ushering in the next wave of high-quality development in the Chinese economy.
L. WANG: The Chinese market is of high potential and rapidly growing in the past many years with its robust manufacturing capabilities, comprehensive supply chain, and stable policy environment. We have firm and long-term confidence in the market as well as in its manufacturing and innovation capability. China is now AstraZeneca's second-largest market, and it is a key engine for our future success. As a localized multinational company, AstraZeneca has been truly rooted in China for over 30 years and our presence in China covers R&D, manufacturing and production, and commercialization. We have firm confidence in the Chinese market, its economic development, manufacturing and innovation capability.
N. WANG: China's deepening reforms and expanding opening-up promise to create broader opportunities worldwide. These reform measures are pivotal not only in addressing global challenges, but also in ensuring China's continued high-quality development — a dual impact that could reshape economic dynamics both domestically and internationally. China has always been one of the most promising markets for LinkedIn. We have utilized unique business model and industry-leading big data and AI technologies to help witness countless homegrown and innovative Chinese companies venture overseas, becoming a significant presence in the global market.
ZHAO: We have seen a series of new measures and initiatives aimed at creating an institutional environment that is transparent, stable and predictable against the backdrop of global headwinds, which is appealing to foreign companies. In addition, the vast market with high unmet medical needs in underserved and serious diseases, and the country's commitment to innovation are also boosters of confidence for MNCs like Astellas.
China is one of Astellas' five global markets, ranking among the top three out of the fifteen prioritized markets for Astellas globally. We're committed to delivering innovation that makes a difference to the people of China and the healthcare systems that support them.
Q5: The plenary session has stressed that reform tasks laid out at the meeting shall be completed by the time the People's Republic of China celebrates its 80th anniversary in 2029. How do you expect the new reform and opening-up measures to transform the Chinese economy in the coming five years? What strategies will your company adopt to align with the expected transformation? Looking ahead, in the second half of 2024, what are your expectations for the Chinese economy? How do you think your company will fare in this evolving landscape?
LI: The continuous emphasis on innovation and opening-up will bring more opportunities for Chinese innovative drugs to speed up their journey to the market and benefit patients not only in China, but around the globe. In line with our parent company Danaher's innovation strategy in China, we will continue our efforts to expand collaborations with all stakeholders in the biopharma industry, from discovery to commercial manufacturing and delivery of new drugs. Cytiva is happy to support more Chinese drugs in reaching the global market.
Meanwhile, I look forward to the digital transformation of our industry. We have launched many tools and solutions and an online service center, which enable smart manufacturing and services for our customers here in China. Going forward, we will continue to focus on customer needs, striving to develop more flexible and convenient solutions to advance and accelerate therapeutics.
L. WANG: China has demonstrated its potential to lead globally across various technological platforms.
Therefore, we have continuously increased our investment in China over the past two years, including $700 million to build a manufacturing and supply site in Qingdao, Shandong province, an additional investment of $475 million to build a small molecule factory in Wuxi, Jiangsu province, as well as announcing Shanghai as our fifth global strategic site, illustrating our long-term commitment in China.
N. WANG: We recognize and appreciate the Chinese government's positive attitude and firm resolve toward opening-up. These measures, we believe, will spur technological innovation and industrial upgrading, continually invigorating China's market dynamism and driving sustained, stable economic growth. This, in turn, is likely to offer broader development opportunities for foreign enterprises. China represents one of LinkedIn's fastest-growing markets globally, reinforcing our commitment to increased investment in the country. We aim to leverage our unique strengths in connecting top-tier global talent with professional opportunities, coupled with our first-hand data insights.
ZHAO: Given China's resilient economic performance in the first half of the year, alongside the new measures introduced to boost the economy, we are optimistic about the Chinese economy in the second half. With the implementation of the new reform and opening-up measures, we expect more breakthrough innovations coming from emerging or strategic industries such as healthcare in the next five years, which will inject new growth impetus into the country's economy.
We will continue to accelerate and evolve together with China with a patient-centric mindset, making our innovations more accessible for Chinese patients.
