Henkel: the new foreign investment law positive for future growth

Q: What do you think of the new Foreign Investment Law that will be adopted this year? 

A: The stated objective of the Foreign Investment Law is to improve market access, IP protection and treatment of foreign investors, thus further opening up the China market and creating a healthier competitive business environment with new opportunities for multinational companies such as Henkel.

As one of our top three markets globally, China’s continuing opening-up as well as its rapidly developing manufacturing sector and growing middle-class are driving demand for Henkel’s products and technologies, enabling us to diversify our portfolio and extend further our reach to customers and consumers.

We are happy to see the Foreign Investment Law being realized this year and look forward to further opening-up and deeper market reforms.

Q: 2019 marks the 70th anniversary of the People’s Republic of China. What about Henkel’s biggest accomplishment thus far?

A: China’s rapid development over the past 40 years has amazed the world, with huge advances in a range of sectors from manufacturing to consumer electronics, and automotive industries. What particularly impresses me now is China’s rise as a leading player in digitalization.

Since entering the market more than 30 years ago, Henkel has grown together with China, building a business of significant size. We have around 5,000 employees at 25 sites across China, delivering advanced solutions to support industrial upgrading. We are recognized as the market leader in the adhesives industry and an innovation leader in the consumer goods industry.

China is one of Henkel’s top three global markets and will continue to be our priority.

Q: How do you look upon China's economic moderation?

A: China is shifting its focus to high-quality growth, which will require further industrial upgrading, innovation and sustainable development. We are confident that our China strategy is aligned to support the government’s economic priorities.

As part of Henkel’s strategy, we are actively shaping our future by increasing investment by around 300 million euros per year (US$340 million) across the globe in products, technologies and innovation, and China will be one of the focused markets. We are driving digital transformation and leveraging Industry 4.0 across the supply chain. China is also prioritizing sustainable growth and Henkel, as a leader in sustainability, is doing its part by rethinking plastics and packaging and leveraging high-performing solutions in strategic emerging industries such as electric vehicles and solar.

Q: China is encouraging high-quality manufacturing and technological innovation. How does Henkel's strategy capitalize on this transition?

A: Chinese companies have greatly contributed to high-quality manufacturing and technological innovation in recent decades. As a recognition of the country’s achievements, last year China gained a Top 20 spot on the Global Innovation Index for the first time ever.

As a company, we see collaboration as fundamental to accelerating innovation. Inside Henkel we encourage knowledge sharing and collaboration across business teams and R&D centers to develop solutions for our customers. Externally, we co-create innovations with customers and through our broad network of experts. We are thrilled to see more and more Chinese partners and customers investing in long-term growth by tapping into the power of innovation, and we look forward to more collaborations and partnerships to drive technological advancement in China.

Q: What do you think of the government’s ongoing efforts to improve administrative environment?

A: In light of the current challenges within the global economy, such measures will significantly streamline working processes, reduce costs and energize the market.

For multinationals like Henkel, further simplifying administrative processes and beneficial tax policies will increase market openness, enabling us to deliver more with lower cost and higher efficiency. Since entering China, the country’s policies and development have played a critical role in our development. Looking forward, we hope to give back by contributing more to China’s industrial upgrading and future growth and prosperity.