Intel still confident about China's economy, supply chain
Updated 22:09, 21-Apr-2020
By Zhang Xinyuan

The coronavirus pandemic has not shaken U.S. multinational corporation and technology company Intel's confidence in the Chinese economy; if anything, its confidence in the country's economy has only grown stronger.

"We are very confident even in the current environment. The Chinese economy has been very strong. That represents an opportunity; it gave us and the high tech industry a lot of confidence," Corporate Vice President and President of Intel China Ian Yang told CGTN.

Yang also praised China's response to the coronavirus outbreak that resulted in the varying levels of economic lockdown across China to contain the contagion, saying it was impressive.

"Very quickly, the government published a lot of these control measures, social distancing rules and people stayed home, and the citizens of China really responded very well," Yang said. "That really helped to prevent the virus from further spreading. Many of the measures taken by China are actually being shared around the world."

Citing that China's risk management and mitigation strategy has given Intel a lot of confidence, Yang said the company was "looking for longer-term opportunities in China."

 With the coronavirus pandemic still raging abroad, Intel has come up with ways to adapt to the current situation and help to battle COVID-19. The technology company formulated a new concept, "Intelligence X Effect," which it launched online at the company's 2020 strategy press conference on April 9.

Bullish on Intel's future in China

As a global tech company, Intel's confidence in China is mainly based on the current and prospective scale of the market.

"China is already the world's No. 2 economy, and will probably be No. 1 one day – that gives us a lot of confidence," Yang said.

China is driving the acceleration in the digital economy. The Chinese government recently announced a new one-trillion-yuan project (over 100 billion US dollars) to carry out technological upgrades, which Intel and other tech giants interpret as very encouraging and representative of the abundant growth opportunities in the country.

"The demand for high tech products, especially for the products that Intel and our industry provide in the era of a digital economy, is very critical, and it's very essential," Yang said.

Yang said Intel would continue to collaborate with the local industry and look into opportunities to develop more local products that can meet the local needs better moving forward.

Uproot the supply chain?

Before the pandemic erupted, disrupting supply chains, the Trump administration had been urging American companies to move their supply chains back home to fulfill his promise to "Make America Great Again." 

However, the result of the effort so far has been very modest.

After the coronavirus outbreak, the voices calling for the businesses to return to the U.S. have become even louder, arguing that putting most of their supply chains in China can be risky, in the case of a temporary economic shutdown like this time. 

That's a view Intel, which has been developing in China for 35 years, doesn't share.

Yang stressed that it's very important to be not confused by the short-term challenges, stating instead that companies should look at the Chinese market strategically.

"The infrastructure in China is really good. The industrial chain is complete with a large population of skilled workers. Those are China's core competitiveness, which simply can't be replicated by other countries in a few years," Yang said.

"China's rapid response to the coronavirus outbreak was also very impressive, and China's speed and efficiency when issuing and implementing policies to counter virus outbreak was way better than some countries," he added.

Yang further explained why a globalized supply chain makes the most sense.

"We are a global company. Eighty percent of our businesses are actually outside of the U.S., from both a consumption standpoint as well as a manufacturing supply chain standpoint," he said.

Yang firmly believes that for a tech company, the key to success relies on the competitiveness of the products, and the supply chain is only part of the element.

"The best way to mitigate any type of risk is to continue to innovate the leadership product that you can fulfill the worldwide global needs and a global supply chain that can supply customers around the world," he emphasized.

China's "New Infrastructure Plan"

To counter the economic downturn pressure from the coronavirus outbreak, the Chinese government issued a trillion-yuan "New Infrastructure Plan," which mainly focuses on upgrading the technological infrastructure across the country.

China has been looking for opportunities to move from a large scale, low-cost manufacturing structure economy to more of a value-added economy for years, according to Yang.

"This New Infrastructure Initiative will accelerate the upgrade of the economic structure and stimulate innovation for the whole country, which translates to a lot of opportunities in the high tech industry where Intel and many of our partners play," Yang said, adding that even consumers will benefit from the explosion of data and value-added services that will be created because of the massive amount of data.

Intelligence X

At this year's strategy press conference, Intel brought up a new concept, Intelligence X.

"X means many devices, smart devices, connecting to the internet, generating data," Yang explained.

"We increasingly have a large number of devices that increasingly need to be more intelligent. Devices are now connecting to the internet; that's generating a huge amount of data constantly. The creation of data represents an exponential, growth potential."

The data will become value-added services for users, but a lot of this data needs to be processed on the back end and in the cloud, so the explosion of data is also another factor of X, Yang said.

"So X means potential for growth, but if you don't capture the opportunity to grow, if you respond too slow, too late, then you have a risk of being left behind. So, the X is really representing these few things. At the end of the day, it is really an opportunity for the digital economy at large."

Combating the coronavirus using technology

Seeking to protect its employees and while continuing to conduct business, Intel also strives to contribute to the fight against COVID-19 using the advantage of its technologies.

Amid the virus outbreak, Intel's factories in southwestern Chengdu and the northern port city of Dalian never stopped. "We achieved over 90 percent on-time delivery schedule for our customers, despite the virus outbreak," Yang said. According to him, the factory workers received the best protection throughout the period. 

As a major tech company, Intel's efforts to keep business running amid the virus outbreak have shored up many up- and downstream companies. Later, as the virus started to emerge in other parts of the world, Intel's knowledge in combating the virus in China was applied to its other factories in Malaysia, Ireland and even in the U.S.

Intel also pledged 50 million dollars to the fight against the coronavirus on April 7. Forty million of it will go to the medical community to combat the virus and provide better solutions for online learning for students. The remaining 10 million will be awarded to Intel employees and partners to use in the search for better, more innovative ways to fight the coronavirus.

"We worked with our partner here in China, Lenovo and BGI, to work together to provide high-performance computers to really study the DNA of the coronavirus," Yang said. "Hopefully, we'll have a better understanding of the virus itself to help find the cure and the future medicines that can treat this virus."

"Everyone at Intel, we have a mission. Our job is to create world-changing technology that enriches the lives of every person on earth," Yang said.

Reporter: Zhang Xinyuan

Video editor: Yu Yingtian