Global Finance: You once said that the rise of China is an opportunity rather than a threat to other countries. Why is this judged? Ke Cilei: The development experience of Phillips in China led me to this conclusion. Since its establishment of the first joint venture in China in 1985, Philip has invested more than US$3.4 billion in China and achieved a turnover of US$9 billion in 2004. The success of Phillips in China fully demonstrates that China's development and rise can bring about a win-win situation. Today, with the increasing international investment and international trade, globalization is no longer a zero-sum game. That is to say, the income of one country does not mean the loss of another country. All countries benefit from the growing flow of international funds, goods and services. The rise of China is an important part of economic globalization. From this point of view, the recent dialogue between China and India on strengthening bilateral trade and investment is very gratifying. The rapid economic development of many Asian countries shows that it is wrong to describe the impact of China’s rise with the term “end of the worldâ€. China is not only a fast-growing market, but also the real driving force for world economic development. Global Finance: Four years ago, Phillips lost $1 billion, and last year it had $2 billion in profits. How did you do this? Ke Cilei: Since I took office, I have implemented a good integration of the company and implemented the strategy of “One Philips Company†to enhance the internal coordination of the company and the coordination ability of various departments, and at the same time improve the company's response speed to the market and customers. Now, the predictability of company decisions has increased and operational capabilities have improved. This can also be seen from our brand positioning of “sense and simplicityâ€. "Global Finance": Philip's annual research and development funding is about 3 billion US dollars, and the current investment in China is only 40 million euros (1 euro is about 1.3 US dollars), in comparison, this figure is still relatively low. What is the reason? Ke Cilei: When a company enters a new market, there is a process in business development, starting with the transfer of the company's manufacturing industry, then product development, and then patent technology research. Philip's R&D investment in China may be low, but it is suitable for the current situation. Global Finance: Stressing innovation is Philip's consistent policy. What specific measures are there? Ke Cilei: We have an incentive policy called “patent awardâ€, which is to apply for patents for the research and development of engineers and researchers, and finally turn them into products to the market. Global Finance: Philippe in the use of talent How is it done? Ke Cilei: The company implements the “dual track systemâ€. Specifically, it is suitable for engineers who are not suitable for managers. We let him be an engineer. If it is suitable for management, the company will let him be a manager, according to his ability and expertise. Work, not to turn a good engineer into a bad manager. In short, we must give full play to the potential of each employee. "Global Finance": On the EU's anti-dumping against China's color TV, anti-dumping of energy-saving lamps and DVD patent fees for Chinese companies, Philip is the main leader of the incident. What do you think of this? Ke Cilei: This rule is not only for Chinese companies, but also for companies in other countries. I believe that the purchase of intellectual property rights is an inevitable stage in the early stage of China's development. Without its own research and development results, it is only necessary to buy. Since then, Chinese companies have conducted research and development, obtained their own results and patents, and then exchanged these patents with other companies. This is also a learning process. Global Finance: Why does Philippe regard health care as one of its core industries in the future? Ke Cilei: Health care has become one of the major growth points of the global economy, growing at a rate of 5% per year. In the next three years, the growth rate of China's healthcare sector will exceed 10%. China will become the third largest medical equipment market in the world after the United States and Japan. In the next five to seven years, China will even surpass Japan. It’s the second largest medical city in the world. Because of this, health care companies are quickly entering the Chinese market.
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Globalization is no longer a zero-sum game. That is to say, the income of one country does not mean the loss of another country. As one of the most successful foreign-invested companies operating in China, Ke Cilei, President and CEO of Philips, Netherlands, said in an exclusive interview with this reporter: The rise of China is an opportunity. The current important work of other countries and multinational companies is to study how Benefit from the development of China.
September 20, 2018