Land of Milk and Honey

2018-01-20 13:25:25

Energy, efficiency, security, and sustainability are key concerns for people, governments, and industries around the world. China faces particular challenges as a populous nation going through breakneck development and urbanization.

In recent years, the country has ramped up its environmental protection efforts, as air pollution, climate change, and land exploitation threaten quality of life. From November 2017, 26 cities across the country’s north banned coal, and on Jan. 1 this year, China implemented its first environmental protection tax. 

State support has led to the growth of the sustainability sector. At the same time as some multinationals have witnessed the complexities of doing business in China — with several companies coming under fire this month for upsetting the “the feelings of the Chinese people” — others have profited from close cooperation with government.

Honeywell International Inc, a U.S.-based conglomerate, has performed well in China, with double-digit growth that contributed to more than 20 percent of its global growth. At a press event last month, Sixth Tone spoke to William Yu, Vice President and General Manager of Honeywell Performance Materials and Technologies for the Asia Pacific region, about the company’s role in China’s sustainability drive. This interview has been edited for brevity and clarity.

Sixth Tone: Can you tell us about Honeywell’s environmental projects?

William Yu: Honeywell has pioneered a lot of advanced technology. For example, our advanced burner technology helps refineries and petrochemical plants reduce nitrogen oxide emissions and better control carbon monoxide emissions for greater fuel efficiency. In addition, our advanced flare technology delivers outstanding combustion performance and is certified by the U.S. Environmental Protection Agency. These technologies not only bring tremendous economic benefits to our customers, but also help them meet China’s increasingly stringent environmental regulations.

The Chinese government’s latest standards for industrial pollutant emissions published in 2015 reduced the nitrogen oxide emission limit of industrial furnaces by 33 percent, from 150 milligrams to 100 milligrams per cubic meter. These pollutants are the major causes of the increase in acid rain and surface ozone concentrations and have a direct impact on public health and the environment.

Last year we launched a new burner system designed specifically for the China market, which will help domestic commercial and industrial boilers reduce nitrogen oxide and carbon monoxide emissions and improve energy efficiency.

Sixth Tone: Honeywell has performed really well in the third quarter of 2017. Which sectors fueled the growth?

William Yu: Honeywell operates four business units: Honeywell Aerospace, Home and Building Technologies, Safety and Productivity Solutions, and Honeywell Performance Materials and Technologies. These four businesses all enjoyed double-digit growth in China last year.

Many buildings in China use our products, including thermostats, fire and smoke detectors, and video surveillance. We expanded our headquarters last May, and in the new building, we can see the amount of PM2.5 [fine particulate matter] in the room, the temperature, and the number of employees.

In the energy sector, which I’m most familiar with, I'm proud to say that every refinery in China — actually every refinery in the world — uses our technology.

Sixth Tone: How has Honeywell paid special attention to the Chinese market?

William Yu: Honeywell put its Asia-Pacific headquarters in Shanghai in 2004. We are deeply rooted in China and we have established research and development centers to serve the local community.

For years, we’ve had a strategy which we call “East-for-East” — using China as a base to radiate to other global high-growth areas, because we found that China is facing similar challenges as other emerging countries. So we use technologies and products developed and produced locally in China in other emerging markets.

When our CEO visited China in November 2017, he demanded that we serve developed markets as well as emerging ones — so this is soon becoming not just “E4E” [East-for-East] but “E2R” [East-to-the-Rest-of-the-World].

Sixth Tone: This year will be the 40th anniversary of Deng Xiaoping’s 1978 reform and opening-up policy. What has changed about the Chinese market in the past 40 years?

William Yu: I started working in 1985 after graduating from college. Over the years, I’ve witnessed several changes in China. Regulations have improved — now you can find legal references for everything; there are rules to follow.

Second, the market is expanding, and more importantly, upgrading. China’s GDP exceeded 80 trillion yuan in 2017, which was more than 60 times higher than 30 years ago. In the past, only a very small number of consumers could enjoy our sophisticated technologies and products. Now, China is already has the largest middle-class in the world and will grow rapidly in the future.

Third is talent. When I was in college, only one or two out of 100 high school students could make it to university — now in places like Shanghai and Beijing, there are only one or two out of 100 high school students who don’t go to college. Every year, hundreds of thousands of people complete graduate school and tens of thousands of students get their Ph.D. degree. And it’s not only about education: Young people nowadays are more exposed, knowledgeable, and skilled, which makes it easier for us to recruit talented employees.

(Header image: Employees at an engineering workshop in a Honeywell branch in Suzhou, Jiangsu province, April 25, 2013. Li Junfeng/VCG)