China is an economic power house. Over the past several decades it has emerged from a strict communist regime where some struggled to survive, to the point where it sells a vast range of products worldwide, cheaply and highly competitively. It also offers a huge target market for companies that want to expand, and many companies want a piece of the pie.
However, change has occurred over time since the day that Deng Ziaoping opened up the country to trade. Writing for the World Economic Forum in 2015, Feike Sijbesma suggests that China has gone through four stages of development. During the first stage it is argued that the country was perceived as being a massive market where products could be sold. In the second phase, China began creating products and started selling these competitively on the world stage. In the third stage the company’s manufacturing industry increased in power due to strengthening as a result of Western organisations producing in China, as well as Chinese companies. China is currently considered to be in the fourth stage of modern economic development. During this stage the country is starting to embrace innovation into its manufacturing to offer additional strength to the country.
An interesting change has been taking place. As Sijbesma reports:
“Structural reforms and partial liberalisation are easing China’s reliance on growth through investments and net exports mainly driven by manufacturing.”
The change that has emerged is a model that is focused far more on domestic sales, and the offering of domestic services. The model is also much more innovation focused than ever before in the past. It is reported that this is a sizeable step away from approaches that have been taken in the past. It is a new paradigm that will help the country to continue growing economically, and also to filter wealth to all of its citizens. The changes that are happening now are thought to be likely to have an impact on China for generations to come, and are also likely to help it to succeed in the future.
China is a country that is not without problems. The economy has been growing very rapidly, and while it is explained that this growth has slowed up recently, growth is still rather high. Over the course of the upcoming ten years it is predicted that the economy will double in size. This is based on an expected slower growth rate of seven per cent per year. This growth in the economy presents opportunities for China to deal with some of its longer term problems and needs.
People that could benefit in particular are identified to be in rural areas in the west of the country. These people have not experienced much of a trickle down effect compared to others elsewhere in the country. However, it is not just China and the Chinese that need China’s economic growth. There are many parts of the rest of the world who are argued to be tied into this growth and development.
There needs to be attention paid to certain areas to make sure that economic growth is sustainable, and for stability to be achieved and maintained across the nation. This requires social balance to be brought into the economic growth agenda. Anyone that has been to Beijing will also be well aware of the need to do something about the environment. Urban pollution is a big problem and is related to the use of fossil fuels. It is reported that there is a clear need to find renewable and clean sources that provide a greater level of sustainability for the future. In addition, as more people move off the land and move to the cities, this means that “a small food producer will be lost and a food consumer gained,” and China needs to ensure that it can address this challenge effectively.
It is believed that meeting all these challenges will require a great deal of innovation. The leadership is explained to be already taking steps to encourage sustainability and innovation. The world will be watching how China takes its next step forwards, to see how it consolidates the massive gains it has made and how it really helps all to take advantage of the opportunities that this growth can bring.
Paula Newton is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Paula’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Paula has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Paula has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.