How foreign businesses such as Mercedes-Benz Group AG look at the Chinese market amid economic challenges? The company’s chairman Ola Kallenius shares his views with China Daily.
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NewsTranscript
00:00 Amid the mountain protectionism, China remains committed to expanding opening up.
00:14 The Chinese government has recently removed all the restrictions on foreign investment
00:20 access in the manufacturing sector.
00:23 How foreign businesses view this policy change and how they look at the Chinese market?
00:28 In an interview with China Daily, Ola Klainos, Chairman of the Board of Management of Mercedes-Benz,
00:35 shares his views with us.
00:37 China has a large automobile market in terms of both demand and supply, and Mercedes-Benz
00:44 is a significant player in the Chinese auto market.
00:48 How is China being positioned in Mercedes-Benz's global strategy?
00:53 China is the biggest car market in the world.
00:56 And for a globally leading company like Mercedes-Benz, naturally China is also our biggest market.
01:03 So over the many years we have grown and we have a strong position here.
01:06 A lot of Mercedes-Benz fans, loyal customer base, but we want to set ourselves up for
01:12 growth into the future.
01:13 So it's much more than just the market.
01:17 We have a large production base here.
01:20 Most of the Mercedeses that we sell in China are made in China.
01:23 We have been continuously expanding our R&D activities, opened up a new bigger R&D center
01:29 here in Beijing two years ago.
01:31 And we're also expanding our supply base and our tech partners.
01:34 So it's a 360 degree strategy for Mercedes-Benz in China.
01:40 Internally, sometimes we call it a home away from home.
01:44 The European Commission has initiated anti-subsidy probe on imports of electric vehicles from
01:50 China.
01:52 So do you think the move is necessary?
01:56 What's your take on this?
01:57 As far as Mercedes-Benz is concerned, and we as the inventors of the automobile, we
02:02 were one of the first companies more than 100 years ago to go internationally into the
02:06 markets.
02:08 And I think that has been the success story ever since.
02:11 Opening up markets, taking down trade barriers, making competition free and open for all players.
02:20 So my sincere hope is that as we discuss how a WTO-based trade order is developed further,
02:29 that we don't take the route towards more protectionism.
02:32 Because that will not lead to economic growth.
02:35 It will not create wealth.
02:37 So we very, very clearly advocate for, please reduce trade barriers.
02:45 Don't seek for ways to increase trade barriers.
02:49 Have a level playing field for all competitors around the world.
02:54 And don't retract into an inward-looking focus.
02:59 And that's my hope for this as well.
03:03 China and the EU remain each other's major trading partner.
03:07 However, the European Commission unveiled a de-risking strategy to reduce the so-called
03:13 risks associated with excessive dependence on China.
03:17 So how do you think such a policy of de-risking or decoupling will affect businesses of European
03:24 companies like Mercedes-Benz?
03:25 In fact, the choice that we are making for Mercedes-Benz in China and for China is we're
03:32 going to increase our investments in China because we believe in the long-term prospects
03:36 of this market.
03:38 We also believe in the innovation ecosystem that you find here.
03:43 So as I just mentioned before, we're increasing our R&D activities in China for China, but
03:49 also for the world.
03:51 So our business strategy is to increase our footprint in China.
03:56 The China-EU summit will take place in the near future.
04:00 If you got a chance to meet the leaders from both sides, what would you say to the policymakers?
04:07 Focus on win-win.
04:08 Focus on the things that we can do together.
04:11 There will be differences always in some matters between major powers and major economic
04:16 regions.
04:17 But look at what the recipe for success was over the last 30 years as we have had a WTO-driven
04:24 opening up of markets.
04:26 Look at the success story of China opening up.
04:28 And I could see some comments this week from the president that China will continue to
04:33 open up.
04:34 I think that is the only way forward because capital and investment will seek opportunity.
04:41 And if you open your markets and you make your markets more attractive to investment,
04:45 you will attract more capital and you will then create jobs and economic growth.
04:51 The Chinese government remains committed to opening up.
04:56 President Xi Jinping announced at the third Belt and Road Forum for International Cooperation
05:01 that China will remove all restrictions on foreign investment access in the manufacturing
05:07 sector.
05:08 How do you view this change?
05:11 Is it good news for foreign businesses?
05:13 I think it's good news for any company.
05:16 I think it's also good news for China.
05:19 Any one entrepreneurial unit, any one company that seeks to expand their business, invest
05:26 capital, they will look at the circumstances in the economic regions.
05:31 What's the risk?
05:32 What's the return?
05:33 If you start removing barriers, you lower the risk and you increase the chance for return.
05:40 So that particular move by China to open up even more, I think it's a smart move.
05:46 And I believe it could lead to more foreign direct investment and perhaps also more opportunity
05:51 for us at Mercedes-Benz.
05:53 Do you have any plans for the expansion or further investment in China?
05:59 We have a very strong relationship with our joint venture partner here in Beijing, BIKE.
06:05 And speaking to them, we are now looking at next generation technologies.
06:09 So what are the next generation electric vehicles that we have in development?
06:14 What supply base do we need to use to make sure that we have the best technology for
06:19 Mercedes customers going forward?
06:22 How do we develop the digital offering in the car?
06:26 So yes, on a broad range of activities, we are expanding and investing into the future.
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