Teddington Blog

Chinese Business World from the Ground

David Thomas, President of the Australia China SME Association, provides a hands-on view of the Chinese business world, popular views and trends within the economy. It highlights a fantastic opportunity to steer your business to new, broader and richer seas.

  1. President Xi is popular and highly respected

David found that everyone he met expressed their full support for President Xi and everything he is doing to (a) stamp out corruption (b) identify and promote the best people into key roles (‘meritocracy’), and (c) set out a clear and coherent policy and direction to achieve high rates of long term economic growth. David feels he is making bold policy statements for the long term and, now that he has an unlimited term, everyone can see that he has the power, stability and support to implement his strategic plan. The consensus amongst the people he talked to is that there is ‘more freedom and less control’, a stark contradiction to what is reported in the western media.

  1. China’s Greater Bay Area is a major new growth area

One of President Xi’s new initiatives is to establish a Greater Bay Area, linking what is known as the ‘Pearl River Delta’ (mainly the first and second tier cities in Guangdong Province) with Hong Kong and Macau. They are now all linked by a new 50 km bridge-tunnel network due to open soon. Expect to see major new infrastructure links between all the key cities and a business and investment boom created by Government stimulus packages in the new Greater Bay Are.

In addition, Hainan Island has been singled out as a new special economic zone to rival Hong Kong as a new gateway to China. David expects new relaxed regulations will be introduced to make it an attractive launching pad for foreign companies entering the China market.

  1. China will import more from the USA

The recent resolution of the US-China trade war indicates that China has committed to redressing the balance of the current trade deficit between the two countries. This will mean much greater emphasis on importing resources and agricultural products from the US to the detriment of other countries (e.g. Australia and Canada).

  1. One Belt One Road is the focus for outbound investment

David believes that future large scale outbound investment, particularly from State Owned Enterprises, in infrastructure and heavy industry will be directed towards projects located along the One Belt One Road (OBR) route. Countries who are not active and committed partners in this initiative (eg Australia) will see a decline in major infrastructure investment as projects are awarded to the countries who have shown their commitment to OBR.

  1. Major push towards ‘Made in China 2025’ initiative

David met with Mr Xie Hon, the President of the Guangdong SME Association, who he believes will be a key collaborator for David in organising our ACSME Innovation Mission later this year. He reiterated the strong push towards high value manufacturing, innovative technology and the commercialisation of new ideas (particularly in the healthcare, education, energy and environmental sectors) and the allocation of new resources and investment to attract foreign entrepreneurs to China. Mr Xie Hon also made observations about the changes to the make up of his SME membership over the last 5 years, including the emergence of younger, more educated, professional and ambitious Chinese entrepreneurs who are embracing the new regime under President Xi with less corruption, a high respect for IP protection and a system which rewards merit, innovation and hard work, rather than just ‘guanxi’.

 

Stand by to see China’s growth rate soar in the next 5 years!

Source: http://www.davidthomas.asia/blog/china-in-2018-the-view-from-ground-level/