Top Executives on What to Know Before Investing in Asia

As Asian economies rapidly develop, fueled in part by new policies in China, the region’s top executives are looking to take advantage.

For instance, 3SBio chief executive Jing Lou said his company is poised to benefit from the country’s 2017 “Healthy China” policy, which will provide funding and support to biotechnology companies developing drugs for the nation. Xinjiang Goldwind Science & Technology Co. is similarly aiming to benefit from the country’s push to optimize renewable energy consumption and wind capacity, according to vice president Ma Jinru.

As Wang Tianyi, the new chief executive at Everbright International, advised, investors should “keep an eye on key national policies.”

In addition to Asian policymakers, global demand is also driving the region’s companies, according to top executives. Chi Wai (Ellis) Cheng, CFO at transportation company Kerry Logistics, said businesses like his have become more globalized, creating a need for more sophisticated technology to support them. Below, Cheng and other members of the 2018 All-Asia Executive Team weigh in on the biggest changes impacting their countries and industries, and how investors can best navigate them.

3SBio is the pioneer and leader in the biopharmaceutical industry, with integrated research and development, commercial, manufacturing, and investment platforms.

3SBio faced growth pressures last year and its revenue increased by approximately 33.5 percent. The growth is owed to the dramatic increase from the company’s core products. All four products continued to be market leaders in China in 2017.

Looking ahead, what are your company’s plans for 2018 and 2019? 

Looking forward to the future, 3SBio intends to reinforce its position as a leading biopharmaceutical company in China by leveraging its integrated research and development, commercial, and manufacturing platforms. The group will also focus on developing leading biologics products that enable it to provide a variety of treatment options for patients.

How is 3SBio adapting to cope with industry changes?

3SBio is growing up with the process of regulatory reform in China. In 2017, the policy of “Healthy China” accelerated the development of the biopharmaceutical industry. 3SBio sees the opportunities that innovative drugs are expected to receive more government support, and drugs with proven efficacy and superior clinical benefits at competitive costs are more likely to be covered by reimbursement.

What should foreign investors know before investing in your country?

Biotechnology has revolutionized the pharmaceutical industry by addressing unmet medical needs and offering innovative treatments for a wide array of human diseases. In China, the biotechnology industry enjoys strong government support and has been selected by the State Council of China as a key strategic industry. Strong government support along with increasing physician adoption of biopharmaceuticals has driven strong industry growth in China.

In 2017, the company implemented mixed-ownership reform and introduced leading internet companies like Tencent, Baidu, Jingdong, and Alibaba as its strategic investors. Tapping the resources and capabilities of the strategic investors, the company innovated the business cooperation model and achieved strategic business collaboration. 

In 2017, the company faced challenges brought about by the decline in legacy services, intensified competition, and the implementation of the government’s policy requirement of speed upgrade and tariff reduction. This had prompted the company to accelerate its transformation and development, switch driving forces, and enhance development quality.

Looking ahead, we are embarking on a new historic journey as the mixed-ownership reform allows the company to establish unique differentiated advantages and herald new significant strategic opportunities for the company's development. The company will seize firmly the brand new opportunities brought by global technological and industrial reform and China's economic development model reform.

The company will strive to instill into itself ‘Five New’ –  new DNA, new governance, new operation, new energy, and new ecology.  It will continue to deepen its strategy of focus, innovation and cooperation; vigorously accelerate internet-oriented operation; forcefully push ahead in-depth synergetic business cooperation with strategic investors; speed up improvement in innovative capability; and deepen system and mechanism reforms to raise vibrancy and efficiency, striving to start a new era for its innovative development. 

China’s economic development is entering a new era. New development models emphasizing high-quality development requirements will drive the entire society to improve total factor productivity and vigorously cultivate new energy.

We firmly believe that outstanding corporate culture can enhance an enterprise’s cohesion, in which aligned values are nurtured and shared by members of the organization. This therefore improves the corporate image and branding, and enhances an enterprise’s core competitiveness. 

Talent acquisition is a major challenge for an enterprise that develops rapidly. Everbright International has always believed that talent is a core factor that supports the business development. In order to facilitate its quick business growth, the group has continued to develop and optimize its talent strategy, with an aim of building a team with strong execution and innovation capabilities. Everbright International’s talent pool has also been constantly improved, which helps to strengthen the group’s overall strength in talent management and core competitiveness.

As China has reached the halfway point of its 13th Five-Year Plan, the country continues to emphasize and deepen efforts in environmental management by rolling out a number of influential policies on ecological and environmental management and protection, reinforcing regulations to the environmental protection industry, and moving forward steadily with its vision to build a “beautiful China.” As a result, the environmental protection industry continues to prosper. Under this policy and industry trend, as the leading player and pioneer of the domestic environmental protection industry, Everbright International proactively responds to the country’s call for “lucid waters and lush mountains [as] invaluable assets,” and follows the country’s development strategies, such as the ecological protection along the Yangtze River Economic Belt and the “Belt and Road” initiative.

Given the robust industrial development trend, as an important participant, contributor, and leader in the domestic and international environmental protection industries, Everbright International proactively follows the national strategies and grasps historical development opportunities arising from the industry. While solidifying its existing business and markets, Everbright International also actively explores new business areas in order to improve its business penetration, expand its business chain, and enrich its scope of business.

What should foreign investors know before investing in your country?

Keep an eye on key national policies. Taking the environmental protection industry for instance, investors could explore investment opportunities arising from relevant key national strategies, such as the ecological and environmental protection of the Yangtze River Economic Belt, the construction of the Xiong’an New Area, and the Belt and Road Initiative.

We really listen to our customers and, in financial terms, focus on return-driven operational execution by offering a world-class integrated resort experience. We offer a little bit of everything to everyone at our world class resorts here in Macau across the gamut of dining, retail, hotel entertainment, MICE, and gaming. As a Chinese operator with a long history of successfully doing business in China and Asia, we have a deep understanding of the tastes and preferences of our target customers.

Macau continues to grow by adding new world-class integrated resorts, but also faces increased competition from growing regional markets. We believe in healthy competition which challenges us to elevate our game and be more innovative. It brings out the best in us.

We are excited by the current and future prospects for Macau and Galaxy, specifically. We will continue to drive our existing resorts here in Macau – including Galaxy Macau, Broadway, and StarWorld – in a very competitive environment. We will continue to expand our brand beyond Macau into overseas markets like Japan and the Philippines, among others. 

We remain very confident in the current and long-term prospects for Macau, where the investment thesis has been validated over time. We are very encouraged by the emerging Greater Bay Area including Hong Kong, Macau, and the nine cities of southern Guangdong, where each will play an integral role in the region’s success.

Macau has grown very rapidly over the past decade or so where it has become the largest [gaming] market in the world. During this period, the investment thesis has certainly been validated where the Chinese middle class continues to emerge and demand for tourism leisure and travel continues to grow. The future prospects for Macau remain bright and exciting, and we are very fortunate to help support Macau achieve its goal of becoming a global tourism destination as well as create value for our stakeholders including our shareholders.

Many logistics companies don’t have much infrastructure, but we have a number of warehouses contained on our balance sheet. More importantly, the major difference between us and others is that we are very focused in Asia. 

In the past, logistics meant moving cargo. Today it means very sophisticated systems set up by very complicated IT systems. We have 650 IT people. Today, for any manufacturing process, most of the products will not come from a single factory. The products have components coming from many factories in different countries. That’s a difficult logistics situation.

We will continue to grow. We expect 2018 to be a good year for us because the global demand is turning around. Because of the scale that we have, we are enjoying more of the economies of scale. 

We also change every day. We are a very dynamic company with a lean management structure. We don’t need to go through many layers of approval. We don’t mind trial and error. We feel that once you plant a seed, you may need to wait for three years to harvest. Our express deliver is an example. We started it eight years ago and it didn’t profit for three years. This is something that young companies don’t mind.

China is not a closed market. There are so many big and small corporations running different businesses. They must know the government policies in that particular industry or vertical. They must know what the competitive environment is.

We endeavor to unleash innovation in the semiconductor industry. We try to bring this all into the market as quickly and as impactfully as possible. Our executive leadership has been quite stable, and we have cherished the same values over the years. 

The challenge over the past few years has been our technology leadership. We grew from a small industry into the mainstream. We’re facing large competition. We went from a follower into a leader over the past few years. That has been critical for our survival. 

We are going to ramp up production of our 7-nanometer semiconductor this year. That will be the most advanced technology in the industry. We’re going to bring it into volume manufacturing in 2019. That will open the door for future generations of technology.

Everywhere in our living environment, we’re going to be using semiconductors. It is an exciting time, but it will change people’s lives. For us, of course, our executive team has to be able to understand the technology and develop trends to capture the opportunities.The semiconductor will change along with people’s minds. It will be different than before.

Goldwind has a leading market position, superior wind turbine products and technologies, a well-proven and diversified business model, and leading technological advancement of industrial digitalization. 

The Chinese government published a series of policies in 2017 to optimize renewable energy consumption and wind capacity. The company positively dealt with the challenges posed by the industry and the market, insisted on the improvement of customer experience, considered technological innovation as the driving force, and implemented multiple measures to achieve the company’s profit growth. 

Oriented by customers’ demands and adhering to technology-leading and quality-leading management concepts, Goldwind will expedite information construction and digital transformation to provide assets management service of full life cycle for customers, and continue to improve overall competitiveness of the enterprise to realize the expansion of offshore and overseas market shares.

Firstly, Chinese economy and industrial policies can be regarded as a guide and signal: The foreign investors need to pay more attention to this information. Secondly, they should know Chinese restricted industries for foreign investments and related negative lists. Thirdly, it would be helpful to take advice from professional and senior consultants that have a good knowledge of specific industries. Lastly, show concern for key information of the investment target and try actively to make effective communications with it.