Biz leaders share plans for next 5 years

Joe Kaeser, president and CEO of Siemens AG

A1 The Chinese economy has entered its new normal economic growth, shifting gears from its previous high growth rate to a moderate rate.

The so-called "supply-side reforms" under the new normal call for optimizing the current economic structure and strengthening innovation to create a more sustainable economic development with higher efficiency and lower costs.

Siemens perfectly fits into the national agenda of quality in growth with its market expertise and innovative solutions. It is also highly efficient and productive in various industries along the value chains of electrification, automation and digitalization.

We see opportunities in intelligent manufacturing, clean energy, urbanization and infrastructure, affordable healthcare and going global with Chinese companies.

A2 Regarding commodity prices, we are seeing decreasing growth and a structural transition in China's economy to a much smaller increase in demand for commodities as previously expected. This will result in structural overcapacities in China and increasing exports of aluminum and steel. Prices for global steel and other metals have come under pressure.

Siemens purchasing volume accounts for approximately 20 percent of raw materials and energy.

We are able to take advantage of both in and out of China. But compared to the slump in commodities prices, the depreciation in the renminbi has had less of an effect. When the market turns, we will be able to secure current price levels by hedging and with long-term contracts.

A3 With over 140 years of history in China, Siemens is already an integral part of the society and economy of the country. China is already the second-largest overseas market for Siemens. Siemens China has maintained solid growth over the past years.

Looking into the next five years, guided by the company's Vision 2020, we will continue building strong partnerships with customers in China. China will continue to be a pivotal market that contributes to the global growth of our company.

A4 China's economic restructuring is essentially a "structural upgrading", and its policy measures, including encouraging scientific and technological innovations, developing a real economy and improving livelihoods, will bring about long-lasting benefits for the country. That was evident in the Business Confidence Survey 2015 by the German Chamber of Commerce that reported China's economic reforms are generally seen as positive.

For Siemens in China, sustainability and innovation will continue to be the key factors for success. Last year Siemens announced the plan to achieve a net-zero carbon footprint by 2030. In China, Siemens' environmental technologies have helped its customers achieve higher energy efficiency. They have also down on customers' emissions in transportation, building, power generation, transmission and distribution.

Siemens will invest around 4.8 billion euros ($5.4 billion) in research and development globally. In China, our company is establishing the Siemens China Innovation Center, which will conduct research in new digitalization solutions for both the Chinese and international markets.