Foreign firm execs keen on China's AI boom

Q4 Driving domestic consumption is one of the top priorities for China to spur economic growth this year. How do you see China's potential to drive a consumption-led impetus for the economy? How will that affect your company's profitability this year?

HU: Following the earlier expansion of trade-in programs to cover more consumer goods in January, we think the program size may be more than doubled to over 300 billion yuan ($41.4 billion) this year. The government may also propose to "properly "increase pension payout levels for retired employees and urban-rural households, and increase the subsidy standard for basic social insurance. These much-anticipated measures could gradually help underpin household confidence and unleash consumption potential over the long run.

RATHNINDE: China's increasing demand for high-quality, sustainable products and services, and its expansive middle-income group present good opportunities for economic growth. The growing emphasis on technological innovation and industrial upgrading has also spurred the emergence of innovative industries that bring new dynamics to the global market such as EVs, smart devices and efficient commercial building controls. These trends align closely with Johnson Controls' expertise and offerings. Our vertical market solutions for commercial buildings, semiconductors and electronics, modern agriculture and new energy are well-positioned to meet the evolving needs of these industries. We are excited to be positioned for growth given the potential for new demand from these verticals and ongoing cooperation with the local market.

XIE: With a large population, growing middle-income group, increasing urbanization and rising disposable incomes, China has significant potential to drive a consumption-led boost to the economy. Last year, China launched large-scale equipment upgrade and consumer goods trade-in programs, yielding fruitful results. In 2024, over 37 million consumers purchased more than 62 million eligible home appliances, and more than 6.8 million vehicles were traded in for new ones. Increasing domestic consumption, particularly of home appliances and vehicles, will boost demand for steel, subsequently raising the need for raw materials, including iron ore. Notably, over 60 percent of consumers chose new energy vehicles, further driving demand for battery materials like nickel and copper. These trends are highly favorable for Vale.

XU: Consumption will also drive the growth of the aviation industry. Income growth, more statutory holidays, changes in consumption habits such as more emphasis on experience, and expansion of route networks will stimulate the public's demand for air travel. China's civil aviation passenger traffic reached 730 million last year, a new high. China has the largest aviation population in the world. We are confident in the prospects of China's civil aviation market. Airbus predicts that the average number of flights per capita in China will increase from 0.5 in 2023 to 1.7 in 2043. As the market grows, China's fleet size will triple in the next 20 years, requiring more than 9,500 new passenger and freighter aircraft and 500 converted freighters. Airbus will support the high-quality development of Chinese airlines with highly efficient new generation aircraft.