This year marks the 30th anniversary of China's reform and opening up to the outside world. Siemens has been active in China since its first presence here as early as 1872, and has witnessed the rapid growth of China's economy since 1978.

In a recent interview with Beijing Review reporters Chen Ran and Matthias Mersch, Richard Hausmann, President and CEO of Siemens Ltd., China, shared his views on the changes that transpired in this country as well as his current team's prospects.

Beijing Review: How do you view the reform and opening-up policy? Did Siemens see any investment potential in China in 1978?

Richard Hausmann: China now is not only a market of products to the outside world, but also a country of the source of production, research and development, as well as innovation. The policy is a significantly wise decision that not only helped Siemens and China, but also the whole world. It is the key success factor for the country's economy; it was absolutely the right decision for the country. We can see the fruit of the decision for many years to come.

Siemens is probably one of the few international companies that has witnessed these 30 years in China. In December 1978 and January 1979, we signed the first two Memoranda of Understanding with China's former Ministry of Machine-Building Industry. That was the basis of our engagement in China. This is a clear example of what Siemens all about.

Siemens at that time, 30 years ago, actually was not clear about what would happen. It was rather a risky decision to go into and engage a company in China. It was a sign of innovation, entrepreneurship and also an international approach. The early engagement, supporting the reform and opening-up policy, was a major milestone for Siemens globally as well.

Do you see any changes in terms of investment environment and competition? Will this have an impact on your development strategy?

The overall investment climate in China, for an international company, is constantly improving. I'm not saying that it's easier to form a joint venture company or even to buy companies; this may not be the case. But by and large, the transparency of the business environment, the improving intellectual property rights (IPR) protection, as well as clearer regulations on the labor law and so forth, are helping to improve the investment environment.

The competitive situation has also changed. On the one hand, more and more multinational companies are coming here; on the other hand, a lot of very innovative local companies are now on the rise. It's a very fruitful and stimulating atmosphere, which we are enjoying very much.

Our business, as early as in the 1980s, was mostly about bringing new and advanced technologies such as infrastructure-telephone systems and power generation-into the country. Over the last 30 years, however, this has changed significantly, and so have we. We brought the products into a selling market, and we are now, with more than 90 operating companies and factories, actively doing not only production but also research and development, as well as designing our own products for the Chinese market and export. We moved from a state-owned partnership model into a full value-scale business. We had already-since I started here three and a half years ago-pushed into what we called industry, healthcare and energy. The goal is very clear-Siemens will become faster and more efficient, even more customer-oriented and transparent.

From that point of view, I would say that Siemens China was probably on the forefront of new organization, even in the past. There might be some minor adaptations also coming up in the future. But overall, we feel strongly that this new organization setup with the three sectors makes leadership clearer, which in return will also strengthen our business here in China.

In your opinion, has it become harder or easier for Siemens to do business in China?

Being the first international company in the country, it was easier. Now everybody (all of our competitors) is coming because they realize the opportunities here; a lot of local competitors are growing. The overall market, as I said, is getting more competitive. But competition is a great thing; otherwise we would not have developed into what we are now.

At the same time, with our readjustment over the last 10 years and focus on infrastructure technologies like the transportation system, energy generation system and healthcare, as well as innovative products, I think we've had very good success, and from that point of view, I don't think it becomes difficult, but certainly more competitive to do business here. Last year, for example, we reached 60.7 billion yuan ($8 billion) in business, which I think is a very positive number. We set a goal to reach 100 billion yuan ($14 billion) in 2010, and we are optimistic about that.

We strongly believe that we have all of our focus fields now, highly competitive product lines and solution lines, and we will be successful.

Would you change some of the company's strategies in the Chinese market if you were given a chance to start over?

Looking back, that's always easy to say. We would probably have done things faster-forming joint venture companies faster, and maybe risking more. Certainly there were some temporary setbacks such as political issues or SARS. But overall, say in the last 30 years, we have grown well. In recent years, we are moving faster from a business point of view.

Siemens feels very much at home here in China, especially in Beijing. We feel very strongly to be an integrated part of the society. More than 99 percent of all Siemens employees (about 50,000) in China are Chinese, so we believe strongly that we are in the way of a Chinese company.

Maybe one particular thing ready to change is the development of the people. There is a war for talent, and we are in that war here in China. We have to stay competitive. If I had the possibility of going 10 years back and being responsible for the company, I would send more Chinese people to Germany for more exchanges; there would be a larger managerial set of people available today. Right now, we have a training center in Beijing and other parts of the world as well. We are doing everything possible in terms of re-coaching by sending our new staff back and forth and doing special programs to develop them. One day, my position will be localized. That's our goal.

Do you see any space for improvement with regard to the Chinese Government?

The government plays a very important role in investment in terms of setting overall boundary conditions.

As I said earlier, many things such as the anti-monopoly law, the new labor law and so forth, are on the right track. Although the IPR situation is improving, we still believe that there is quite some way to go, especially for Siemens as an innovation technology company that heavily relies on invention and patent. We support very much the efforts of the government to improve the situation not only in big cities, but also in provincial areas.

Sometimes we would love to see a clearer definition of laws and regulations. The new labor law, for instance. We are still waiting for the final detailed regulations. There was little efficiency, so it could be speeded up a bit. We are expecting governmental directions, and we believe that the direction is the right one because of the reform and opening-up policy.

Another thing we expect is an equal-level playing field, so that there's no bias toward so-called "foreign companies," with regard to tenders or other matters. In some cases, it still seems impossible.

Profile of Richard Hausmann Born in 1960, he studied physics at Regensburg University and the State University of New York, where he obtained his doctorate. He joined Siemens Medical Engineering Group in June 1988, and assumed his current position as President and CEO of Siemens Ltd., China, on January 1, 2005.