China plays an important role in Covestro’sbusiness. Covestros Chief Technology Officer Dr. Klaus Schäfer, chairman of DECHEMA, explains why digitization and climate protection will be more importantforthe company’s future business in China.

? Dr. Schäfer, Covestro is very active in China. What role does China play for your company?

SCHÄFER: Since the start of the 2000s,we have made huge investments in China and are now generating around a fifth of our company’s turnover here. Measured interms of sales, this means that China is our biggest single market.

? You recently announced a cooperation with domestic appliance manufacturer Haier. What are you hoping for from this cooperation?

SCHÄFER: Haier is one of the leading manufacturers of domestic appliances in the world, and we want to further expand our cooperation that goes back decades. In our planned joint digitalization labo-ratory,
we will take advantage of our extensive knowledge of poly-urethane and foaming technologies, while Haier will contribute its expertise in industrial automation and in the analysis of large data volumes.

? With this type of project, which is also with the context of the digitalization strategy of Covestro, will you benefit from the developments in China in this field?

SCHÄFER: Partnerships generally make a lot of sense in many areas, as you can often combine the best of several worlds. One thing we are seeing a lot of in China and other Asian countries is enthusiasm for new technologies. Of course, this ac-ceptance helps us to implement our digi-talization strategy — as well as enabling us to push ahead with new working meth-ods and try out new business models. Our own flagship
store on the platform of online marketplace specialist Alibaba is a good example.

? How do you think that China is going todevelop in the near and medium fu-ture?

SCHÄFER: We expect continued dynamic and positive developments for Covestro in China. In my time as a manager in China,I experienced a particular skill of the Chinese up close: the will to make plans and then rigorously implement them. There is increasing focus on the topic of climate protection — both in industrial processes and in relation to topics like urbanization and e-mobility. We can and plan to profit from these megatrends.

? The BDI recently pointed out that China has now evolved into a competitor and that a strategy is needed so that Europe can meet this competitor on equal terms. Do you see a risk that China is carving out advantages over Germany and Europe through unfairboundary conditions?

SCHÄFER: It is clear that Chinese companies have now reached a respectable size and that they have taken on leading roles in the global competition. We therefore need to have a discussion in Europe about the
exact form a European indus-trial policy should take so that competi-tive conditions are created for industry and disadvantages are avoided. This will be the only way to ensure that European companies can have a leading position in the global marketplace.

? Where do you think that Chinese industry has the most catching up to do?

SCHÄFER: Well, I don’t really feel it is my place to discuss any need to catch up on the part of Chinese industry in general.One project that makes a lot of sense from my point of view is the recently launched
initiative to consolidate many small and decentrally distributed compa-nies in chemistry parks. The aim is to improve environmental protection and ensure better safety.