Reaping the rewards of a good decision

Emerson opened its new headquarters in Shanghai last month at a time when most multinationals had either withdrawn investment or moved factories elsewhere to take advantage of cheap labor and offset tough economic conditions in China? What are your future investment plans in the country?

We have grown so much in China and we want to consolidate our operations. Our plan is to continue to invest in China, as it is our second-largest market. Even though China's economy is growing slower, it's still faster than most economies around the world. So I'd look at that as an opportunity for companies like Emerson to invest.

What are your strategies in China as you readjust to realties like 'New Normal'?

China's economy is changing and is moving toward less of exports and more of domestic consumption. I think it is going to start changing again as most of the industries are saddled with huge stocks. So the country will look to do a little more of exports again, particularly that of sophisticated products, instead of lower-cost and single products.

As China has changed, we had to alter our strategy here. What we have to do is to supply more sophisticated systems to the Chinese companies, which are trying to export and provide a solution for a power plant or a chemical facility.

How long do you think it will take for China to complete its transition?

I think it could take anywhere from 10 to 20 years. My expectation is that China's economy will continue to grow at 7 percent or 5 percent－it could easily go down to 4 percent－but that's still very healthy economic growth. I think the current leadership is making a lot of changes, and hopefully the next generation of leaders that come along will fine-tune it, making it better. I think it's going to take a couple of more generations of leaders, because it's a very large economy with lots of people and issues they have to deal with. In the long term, I think China will work its way out, and eventually become an economic powerhouse.

What is your biggest achievement as global CEO of Emerson?

The decision to move to Asia in the early 1990s and to convince the previous CEO, a close friend of mine, to make the investments in China is what I am particularly proud of. When I moved to Asia, we had less than $50 million in sales in China, with only a couple of joint ventures. Last year, our sales were $2.5 billion, with lots of employees, factories and investments. Also driving that and developing the leadership that we have here－we do have a few Europeans and a few Americans－but most of the leaders are Asians and developed over time. So I think the change from China being not that important to the company to it being our second-largest market will be one big achievement.

What leadership qualities are important to you as you seek growth opportunities in China?

You have to be very intense and hardworking. Bu you also have to be able to judge people's talent and have good relationship with people and manage very complex issues. So I look for people who possess strategic thinking and have good management skills, especially around chaos and people. If you can do that, you have won half the battle.