Exploring China’s economic direction and the impact on your business
- The influence of China’s Communist Party on privately owned companies is minimal.
- The wealth inequality in China is similar to what it is in the US.
- China is a one party system, that promised economic growth and prosperity for 30 years and they delivered it from 1978 to 2007. This is an economic miracle.
- Between 1952-1978 the factor productivity was 0% which meant the resources were in place but they were unable to drive the economy forward until 1978.
- What led to the economic miracle:
- Demographic dividend.
- Yet, China wouldn’t be anywhere with the global demand.
- Since 2007, China’s economic growth has slowed down.
- Developing countries around the world are catching up with China.
- 5 reasons for China’s economic success:
- Economic development.
- Letting markets play a decisive role.
- Opening up – an open regionalisation.
- Upholding the rule of law.
- Over the past few years, there’s been an unprecedented change in business confidence. So what happened?
- Zero-covid created a perfect economic storm.
- Domestic consumption has decreased.
- China’s population shrank in 2022.
- The plan from China is for innovation and dual circulation. In the past, China was associated with low quality and the plan is to change this perception dramatically.
- The Chinese government don’t want to go back to 10% growth, they want slower, steady growth from now on.
- What can we expect in 2023 and beyond?
- China is saying around 5% GDP growth rate.
- External predictions are 6%.
- This means the economy has stabilised and is not as volatile
- As a board member, you need to ask these questions when doing business with China:
- Do you involve China experts in your corporate strategy process?
- Do you understand the Chinese customer of today and tomorrow?
- Do you really understand the political decision-making process and the people involved?
- What kind of management systems do you have in place to manage China operations?
- How can you ensure you benefit as much as possible from the innovations in China?
- Do you know the risk exposure you’ll have in China? Sales, supply chain?
- What is your view on China? How much do you want to collaborate and in what ways?
China is an ever increasing critical supply chain and sales market for Western businesses. This is not new, yet geopolitical tensions have implications for business growth. Board directors and executives need to know how to manage this market to stay ahead of the competition.
Leave this webinar with a better understanding of the economic situation in China. Use this knowledge to help you and your organisation make better business decisions about working with and in China.
Before joining China Europe International Business School (CEIBS), Robert was Head of Talent Management, Leadership and Organisational Development Europe at Oerlikon AG. Robert has also been Professor of Finance and regularly teaches on the topics of leadership and financial leadership at corporate universities and university executive programmes.
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