'Dual circulation' to boost growth (VI)

A1: Despite the lingering COVID-19 pandemic, we've seen a strong comeback, particularly thanks to the resilience of our business in China – our largest market. That has enabled us to revise up our earnings guidance from earlier last year.

As we continue our journey toward a future of circularity, China will certainly play an increasingly important role as both a huge market and a source of continuous innovation. Business opportunities in China will emerge from innovation, which is always the lifeblood of Covestro.

A2: We believe that the new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other will mean that Covestro can leverage its global expertise and networks, together with its local partnerships and innovation projects in China, to better serve our clients and contribute to the shift toward high-quality economic growth in the country.

Covestro will strive to leverage our leading edges in materials and our open innovation approach to capture opportunities arising from the integration of the two circulation systems and China's further opening-up.

A3: A stable industry value chain and a well-functioning market system, which the Chinese government has pledged to maintain, is extremely important for multinational companies like Covestro. Also, the Chinese government's commitment to supporting foreign investors is helping boost confidence in the entire industry to navigate through challenging periods.

A4: The centralization system in China has worked well to help control the spread of the virus, and its strategy to contain the pandemic before restarting the economy proved to be quite a success. That's why China was the first country to recover, and the China market for multinational companies was also the first to recover.

We greatly appreciated the efforts that China has made to revitalize business activities and aid enterprises -- for example, sending masks to us and giving mask resources to us at the beginning of the COVID-19 pandemic. Later Shanghai granted Covestro preferential natural gas prices as a nonresidential user, while national-level tax relief policies also helped us cut costs. Also, as the country unveiled massive stimulus packages, our customers were back to the recovery track, which in turn helped our business. So the deep V-shaped recovery was not too surprising to us.

A5: As China enters a new development stage, it will place a greater emphasis on growth quality over speed. And the country will step up efforts to improve environmental protection to realize sustainable growth.

Covestro's business strategy and initiatives fit in well with China's agendas in the new development stage. The company will completely align its entire production and product range as well as all areas in the long term to the circular concept.

A6: China's ongoing recovery and sustainable growth will serve as a long-term driver to global economic growth. Covestro is committed to further expanding our business presence and contributing to the nation's economic upgrading and transformation.

This year, we upgraded our regional headquarters in Shanghai's Pudong New Area to oversee multiple functions such as investment, management, operations and R&D. We will further bolster our innovation capability and leverage innovative results in China to serve the global markets.

A7: China is doing its best to optimize the nation's investment and business environment. The country has implemented a new foreign investment law, and has significantly shortened the negative list for foreign investment. Reform and opening-up are further promoted in pilot zones like Pudong in Shanghai as well as Shenzhen and Hainan Island.

China is also stepping up efforts to promote globalization and regional economic integration in a more proactive way. This will create more collaboration opportunities for companies worldwide, including Covestro.

Global companies like Covestro will not only participate in a wide range of fields to contribute to these ambitions, but also benefit from the country's economic resilience and momentum to foster their own business growth and diversification.