Ericcson powers ahead into its second century in China
FROM phones used in the Forbidden City a century ago to the next generation 5G technologies, Ericsson stands at the forefront of the communications revolution in China.
The Swedish company, which has been operating in China for over 100 years, bears witness to the nation’s economic reforms initiated 40 years ago as it opened to the outside world. From there, it was no looking back!
Zhao Juntao, president of Ericsson China, talked with Shanghai Daily about the momentous changes.
As a senior executive of the global tech giant, Zhao praises China for aiming to create a business environment with continuous improvement of fairness and transparency, and he looks to even better times ahead.
Zhao and Ericsson veterans Lars A. Stålberg and Per-Olof Björk are bringing their experiences together in a book to be published later this year. It’s entitled “Ericsson and China: A Lasting Relationship.”
Of course, Ericsson will be participating in the first China International Import Expo to be held in Shanghai in November.
Q: What is the most impressive change you have seen in China in the past 40 years?
A: China has experienced dramatic changes since it adopted the reform and opening up policies. It is a miracle that in only one generation, so large a nation can create such great changes.
What comes first to my mind are the construction of infrastructure, a stronger national economy and gradual adoption of universal health care. In recent years, everywhere you travel, you can see beautiful countryside blossoming in every province. We are confident that China will have an even brighter future.
Q: What about changes in the telecommunications industry?
A: Reform and opening up have brought about dramatic changes in our industry. In the early era of reform, the telecom infrastructure in China lagged far behind the West. There were no more than one million telephones across the whole country, and it was an extremely difficult thing for ordinary people to make a long-distance call.
Ericsson was the first company to introduce digital-exchange telephony into China. It was during the early 1980s in Beijing. At that time, the installation fee for a telephone was as high as 5,000 yuan (US$794), while the average monthly salary for a worker was less than 100 yuan.
Now, 40 years later, mobile phone penetration rate in China is more than 100 percent. China has the most advanced mobile networks with the widest coverage in the world. No matter where you are — be it deep in a valley forest or high on the Qinghai-Tibet Plateau — you have mobile coverage even if you walk for hundreds of kilometers without seeing a soul. There is no other country in this world that can top that.
The communications industry has empowered change. Mobile payments, social media and the sharing economy are all possible because of the superb telecom infrastructure.
It could be said that the telecom industry has been the biggest beneficiary of reform and opening up because it embraced the new policies more quickly than other industries.
Q: Chinese President Xi Jinping has pledged to further push China’s reform and opening up. What are you expecting in the next round of initiatives?
A: We would hope to see a more confident China, providing a business environment that is fair, equal and transparent. No matter if a company is foreign or domestic, all should be seen as builders of a modern and beautiful China.
Q: How do these policies equate to economic growth?
A: The importance of reform and opening up is self-evident. The current Sino-US trade tensions are causing a lot of anxiety.
We are glad to see that despite the current situation, the central government is still firmly committed to reform and opening up.
If we look at the development of technologies, we see that they are constantly moving forward. Today, the division of professions has become more detailed. For any specific sector to improve requires a large amount of input and accumulation. It is no longer possible to try to do everything all by oneself.
On the other hand, in order to truly achieve commercial success, the output of research and development has to go through the acceptance testing by both local and global markets.
This cannot be done without an open environment. We have all learned that lesson the hard way.
Q: What is the most important reform affecting your industry?
A: The biggest change in the telecom industry is the advent of 5G, a true milestone. The previous four generations of communications technology focused on connecting people by sharing voice, data or video. All the powerful social media and application platforms that we have today provide solutions to problems related to people.
Since its birth, the fifth generation of mobile communication, or 5G, has been much dedicated to industry, to connect devices, machines, cars and to solve problems for all kinds of industries.
In fact, the application of machine-to-machine communications in industry is still in its very early stage. Such cross-industry application calls for reforms in existing processes, management and control frameworks. For our industry, the next stage of reform and opening up will bring about a huge impact as we would start to work with areas and industries that we have never come across before.
We will meet a lot of challenges, but also a lot of opportunities. The progress of mobile communications technology has led to the rise of e-commerce, mobile payment and social media such as WeChat in China. Our Internet industry has established a strong position in the world. I think, one important success factor is the government’s seizing opportunity and introducing fair supervisory controls. In the upcoming 5G era, we hope to see continuing astute regulation from the government.
Q: Shanghai is hosting the first China International Import Expo later this year. What role will your company play?
A: We will attend the exhibition as part of the Sweden Pavilion. Details of our participation are still under discussion.
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