FOR Joseph Hogan, CEO of Swiss electrical engineering group ABB, partnership could be one of the best strategies to do business in China.
The company, whose products help industries to use energy more efficiently, highly values the Shanghai government's effort to improve sustainability and says an annual meeting with the mayor on the city's future is always helping it figure out how to be supportive and how to direct its funds and investments.
"It's the best partnership we have (with a city) in the world," Hogan said in an interview over the weekend, referring to the International Business Leaders' Advisory Council for the Mayor of Shanghai, which he attended for the fourth time.
He said the company's automation and electrical systems for ship-to-shore cranes, which help save energy compared with diesel cranes, is a good example of cooperation with Shanghai.
ABB, which counts big names like State Grid Corp of China, Sinopec and Baosteel, as its main customers in China, generated sales of US$4.4 billion in the country last year, its largest market.
One area the company sees huge potential in is China's smart grid, which will catapult power transmission into the digital age, securing power supplies and boosting energy conservation. State Grid is at the center of this huge plan.
ABB, which has been looking out for takeover opportunities, prefers partnerships in China rather than purchase companies directly, Hogan said.
Asked if ABB has plans to join the proposed international board on the Shanghai Stock Exchange, he said the company is still looking at it though it's not its current priority. He said the company would have to see whether a Shanghai listing will make sense for ABB going forward but anyway "we feel like we are part of this economy."
ABB last week reported a 2 percent rise in third-quarter net profit and said Europe's debt crisis and inflation pressure in markets such as China are clouding the near-term outlook.
But Hogan said that although inflation remains a concern, China's gross domestic product growth is favorable.