French company Schneider Electric is one of the global leaders in the field of energy management and automation. It entered China in 1987, and the country has become its second-largest market. Yin Zheng, president of Schneider Electric China, told CGTN about the impact brought by COVID-19 pandemic, the moving of the global supply chain, and China's competitiveness as an investment destination.
Schneider Electric has 23 plants and eight distribution centers across China. It was hit badly at the beginning during the lockdown. As the situation has been stabilized, it is picking up at a fast pace.
Yin said that its supply chain was not quite affected thanks to a globally co-work system, localized operation with its suppliers, and the smart supply chain system's efficiency.
The company is already above 100 percent of normal capacity. As Schneider Electric's businesses in other parts of the world are heavily impacted by the pandemic, its Chinese plants are becoming a reserve to support other regions.
Moving of the global supply chain after the pandemic
The pandemic has caused massive disruption to the global supply chain of manufacturers, due to the travel restrictions and lockdowns across the world. Some speculated that it might cause several manufacturers to move their supply chains out of China.
Schneider Electric China in Wuhan. /Schneider Electric
Yin said that the pandemic impacted the manufacturing industries in a great manner, and would cause a lot of companies to rethink and redesign the supply chain, making it more agile and robust.
"If the supply chain has a very long distance, it is always more vulnerable, as this time with this crisis. Probably you would have a lot of thinking of how to make your supply chain shorter, more reductant, so that you will have a much better responsiveness to customer needs, and also to avoid disruption," he explained. "Certain things will come into China in a much bigger way, and certain things will go out."
However, the supply chain is always a competition between companies' strengths, with or without this pandemic's impact. There are other things that need to take into account.
For instance, whether the company uses the digital to make the supply chain more efficient in China, whether it is more sustainable and greener, so its manufacturing will meet the society and the county's goals. These are also factors for companies to decide where to put their supply chain.
China still an attractive investment destination
China is the second-largest economy in the world, and already No. 1 by manufacturing activity, as well as the biggest international trader. However, China not only attracts the company by the size of its economy but also as the origin of many innovations.
Schneider Electric has 23 plants and 8 distribution centers in China. /Schneider Electric
Research & Development is an important part of its localization strategy. It set up the China R&D Center in 1999 and now has three R&D centers nationwide with over 1,400 R&D engineers. Today, China has become one of the three key R&D bases of Schneider Electric worldwide, along with France and the United States.
The support from the Chinese government and the Chinese people's solidarity during the fight against the coronavirus also boosted Yin's confidence to keep investment here. "This part of the environment, as a whole, we work together and hand in hand, that's very fundamental and very attractive", he said.
'New Infrastructure' projects
China is launching a "New Infrastructure Construction" campaign to offset the economic impact of the coronavirus pandemic and boost sustainable growth. In Yin's opinion, the campaign is about how society moves from the traditional way that leverages the new technology, making the infrastructure more efficient and productive and more sustainable.
Yin said there would be a huge amount of investment into new energy, more distributed energy usage that we would get into a more green and electrical future, and to make the society and planet more sustainable. These are the technologies behind this new Infrastructure construction.
He said that China still needs much better roads, intercity trains, harbors, and airports to make the economy much more vibrant and dynamic. "Putting all these things together, that would be a very unique opportunity in China as it going forward to be more productive and efficient", said Yin.