Foreign firms optimistic about rebound

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Workers at the construction site of the second phase of Tesla's Shanghai plant last month. [Photo/China Daily]

Packaging line operations at Lilly's manufacturing site in Suzhou, Jiangsu province, resumed on Feb 10, the first day possible in light of government rules related to the resumption of business after an extended Chinese New Year. The site is operating at full capacity to ensure that patients who use Lilly's medicines can access reliable supplies. To facilitate that, the company has ensured that front-line factory workers have sufficient supplies of face masks.

"Patients are always at the heart of what we do," Julio Gay-Ger, the company's China president and general manager, said. "We would like to work with the healthcare community and contribute our efforts in fighting the outbreak together."

Such optimism and commitment aren't just restricted to US companies. Mauro De Felip, general manager of Ferrero China, the Italian confectionary company, believes the impact of the outbreak will be short term.

"As we are moving from the containment phase to the recovery phase domestically, businesses are gradually returning to normal," he said. "The favorable policies formulated by the government will also help ease the burden and boost the smooth recovery pace of companies' operations."

German chemicals giant Covestro, which generates one-fifth of its revenue in China, has just expanded its regional headquarters in Pudong New Area, Shanghai, as the company remains upbeat about growth in China.

"We regard China as our home market. Our long-term strategy remains intact and it enables us to be resilient in responding to the epidemic," Holly Lei, the company's China president, said.

Companies like skin care giant L'Oreal have witnessed a robust rebound after a short-term tumble. Not only has the French cosmetics giant resumed nearly all its offline retail presence nationwide, its China market sales even bucked the overall gloomy trend, posting year-on-year growth of 6.4 percent.

"Even the epidemic cannot hinder people's pursuit of a beautiful life," said Fabrice Megarbane, president and CEO of L'Oreal China. "On the contrary, people have taken the opportunity to reflect on relationships between individuals, society and the environment, and have formed more positive, rational and responsible consumption attitudes. This definitely provides an even broader space for our business growth."

Despite the current challenges, Eddie Chen, China managing director of Eurazeo, a global investment company, believes that the market will "eventually adjust itself based on the new normal".

"In fact, we have entered a new era for the Sino-European relationship, which has been underestimated historically. Our strategy won't be changed by the short-term impact. We retain our positive views on China for the long run," he said.

For example, Chen cited booming business opportunities in information technology and healthcare, as well as the long-term digitalization and industrialization of all businesses. These latest trends will create new values for better managing portfolio companies in China, he said.

Most executives point to the "In China for China" strategy as a winning recipe to sustain growth, and the coronavirus outbreak actually provides a window of opportunity for testing new practices and improving operational excellence.

For example, Covestro's Lei said she is excited about the growing opportunities in smart infrastructure, including smart city, smart logistics and various internet of things applications, where the company's cutting-edge materials and local partnerships stand to play a role.

"In China, for example, we are working with Southeast University of China (in Nanjing, Jiangsu) on the optimization of radio frequency data transmittance for 5G applications as our polycarbonates are mechanically robust, lightweight, transparent to radio frequencies and suitable for injection molding," she said.

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