Leaders of some of the most influential global companies in the world agreed Friday in Chengdu, capital of Southwest China's Sichuan Province, that China would be the most competitive emerging market for them in the next decade, despite short-term volatility.
Swiss pharmaceutical giant Novartis AG has made a long-term commitment to emerging markets, and it is building a $1 billion research facility in Shanghai, its biggest one in China, as a part of its global drug research network, Joseph Jimenez, the company's CEO, told the Fortune Global Forum in Chengdu on Friday.
"It seems absurd to talk about China growth at 8 percent versus 7.7 percent. It doesn't matter," Jimenez said.
"What matters is that over the next 10 years there's going to be substantial growth (in China)," he noted.
International institutions and foreign investment banks have recently taken a softer stance for their expectations of the Chinese economy.
In late May, the IMF revised down its forecast on this year's Chinese economic growth to 7.75 percent from an 8 percent prediction earlier in 2013.
The causes of the current slowdown are not from China itself, but from its customers overseas, John Faraci, chairman of New York-listed paper and packaging producer International Paper Co, told the same event.
As China is rebalancing toward a more consumer-based economy, the economy will continue to grow rapidly, panelists at the forum said.
"A 7 percent growth in China now is a bigger quantum than 12 percent was 10 years ago," said Peter Sands, group chief executive of the British bank Standard Chartered PLC.
As people consume more when they get richer, Sands expects sectors such as healthcare and financial services will get a boost.
The globe has just been through the most volatile financial crisis since the Second World War, "which was actually a Western financial crisis … and the emerging markets, on the whole, weathered it far better than the West," Sands said.
During his visit to the company's packaging operation in Chengdu this week, Faraci found that while its export volume was down by 15 to 20 percent year-on-year, domestic sales growth has buttressed its overall growth at about 7 percent year-on-year.
As the Chinese consumer market is fast emerging, International Paper has followed its customers, mostly foreign consumer goods companies, to gear more of its paper packaging output toward the Chinese domestic market, which accounts for half of its sales volume now, according to its chairman.
The Chinese government has also been facilitating the upgrade of the country's industries by advancing the protection of intellectual property rights, said Jimenez.
"In China, it's become easier to get a patent and also to defend a patent. That hasn't been the case in India," at least in the pharmaceutical industry, Jimenez said.
That's why Novartis has been investing heavily in research and development in China, because Jimenez said he believes that the protection China offers can give it the necessary exclusivity for it to recoup its high-risk investment in drug development.
India has been strong in IT services, but as China is also churning out an increasing number of qualified talents in IT service and engineering, ANZ Bank is moving some of its research and development to China, "actually very much here in Chengdu," Michael Smith, CEO of the Australia-based ANZ Bank, told the forum.
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