China's Growth in a Tumultuous Global Environment
Wits Business hosted Kobus van der Wath on Tuesday, October 27 for the public to gain a more in depth view on China in a global context.
Kobus opened his presentation with a quote by R.D.Laing, 'We live in a moment of history where change is so speeded up that we begin to see the present only when it is already disappearing.' In this regard, Kobus went on to explain how rapidly China is growing and in what areas. He highlighted that following 30 years of unprecedented economic growth and reform, the world has finally come around to the realisation that China's transformation might be a sustainable phenomenon. Internal political affairs, nations' global competitiveness and financial and trade flows, are increasingly being viewed in the light of what the China factor will do to the total equation.
Van der Wath explained that the China story is only unfolding. This is so because the Middle Kingdom's ride over the past two to three decades forms only a small part of its long history-and there still may be a significant rise in China's global influence. So much so, that China could fundamentally transform not only itself, but the rest of the world. Key to this would be China's ability to grow sustainably and at acceptable levels, successfully manage its own socio-politics, and further integrate itself with the rest of the world. It must also cope with the many risks that it faces, most notably in the social, political and economic arenas. What is certain though is that China is important and its prominence will only rise.
In terms of international trade, 90% of China's total international trade value is concentrated in 10 provinces. These coastal areas also have the highest GDP, GDP per capita, retail sales, fixed asset investment, FDI, and personal income. Kobus encouraged investment in China and Chinese investment in Africa if both parties have the necessary capacity to engage in investment. He encourages knowledge sharing and exchange of best business practice.
On a global scale, according to Kobus, China is set to become the world's second largest economy in 2010/2011. It took China 10 years to move from the 10th largest economy in the world in 1991 to the 3rd largest economy in 2007. In 2008, America stood as the largest economy, Japan as the second, and China as the third.
With high rise of local manufacture, a limited amount of import and borrowing, China's growth is undoubtedly a noteworthy factor. In this regard, Chinese CEO's have changed their mindsets together with the public-policy makers to keep up with current trends. To enhance further relations with China, Kobus poses the following questions: Is China irrelevant to you? and/or Is China a potential competitor to you?
Once these questions are answered, the aim is to:
- Sell resources, value added manufactures, services, technology and best practices to China.
- Make China a long term, but strategic part of your supply chain with China sourcing.
- Compete or and/or partner and/or co-invest with new emerging corporate giants.
In conclusion, Kobus encouraged the following practice as a response to the rising 'new world':
- Develop a strategy.
- Begin Implementing it (your strategy is only as good as your implementation) and.
- Know your people-internally and externally.
