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Gregory Hayes, chairman and chief executive officer of United Technologies Corp, believes that globalization will not only increase trade among countries－but will also create global supply chain networks across developed and developing countries.
“As global supply chains expand, it has become more accessible to developing markets, allowing businesses in these countries to participate in the global economy more efficiently and cost effectively,” said Hayes.
There was no free lunch when he was appointed CEO in 2014, as he immediately had to lead his group to reach more growth targets in its businesses－including elevators and escalators, aircraft engines, aerospace systems and climate control and security systems－as well as to further digitalize them to compete with other rivals in the fast-developing digital era.
While China is undergoing an industrial and consumption upgrading boom, along with the Made in China 2025 initiative, the Connecticut-headquartered conglomerate expects the use of digital and connected solutions will play an increasingly important role there.
Hayes spoke to China Daily on UTC’s strategy for business growth and various other aspects. The following are the edited excerpts from the interview:
Do you have any new investment plan or strategies to expand your market presence in China this year?
United Technologies will continue to invest in China. Otis is making a significant investment in Shanghai, where it will build a 220-meter test tower to test the next generation of high-speed elevators. We have brought all our high-rise R&D facilities to China as well.
We will also continue to invest on the commercial side. Carrier－our air conditioning, heating and refrigeration subsidiary will continue to make investments－has an R&D center that is moving into a much larger facility outside Shanghai this year.
On the aerospace side, we are making investments in products that are currently manufactured in the United States but we are moving some of that production here for the local Chinese market.
What is your assessment of the Chinese economy and how will the country’s economic transformation affect your investment strategy?
It is always interesting when people talk about 6.5 percent GDP growth. From the perspective of the US－where we see 2 percent growth－we would love to see 6.5 percent growth. And again, 6.5 percent growth in a $12 trillion economy, means $780 billion of GDP growth. So we say China’s slowing down, but it’s inevitable just because the economy is getting so big.
I think importantly, when you look at where the GDP growth in China is coming from, the services side and consumer spending now represent 50 percent of GDP, and that is probably growing at 10 percent plus.
UTC is not here just for the next five years. We view China as a place where we’ll be doing business for the next 50 to 100 years and beyond and for us the service sectors are going to be equally important as manufacturing growth.