Attended an interesting discussion on China’s strengths and weaknesses – the panellists were Victor Gao, Co-Chairman of China Daiwa Capital Markets Hong Kong and Executive Director of the Beijing Private Equity Association and Dr. Keyu Jin, Assistant Professor of Economics at the LSE.
Perhaps no one was surprised when Mr. Gao said that China will become a world power much earlier than everybody thinks, even as early as 2016. The fastest growing economy of the world is aware that to achieve an annual growth rate of 8%, they need to create 10 million jobs. However, to become a world power, China needs to do what the US and the UK did, create a financial hub like New York or London and internationalise their currency. China’s economy continues to create more millionaires resulting in an ever growing disparity in wealth distribution. But Dr. Jin thinks that concerns about a social uprising are unfounded; even the poor Chinese know that a rising tide lifts all boats and so growth will benefit both the rich and the poor.
The panelists commented on how the entire world is so interested in ‘having a piece of that (China) cake’ but, in their view it was easier said than done. They emphasised the importance of ‘cultural immersion’, establishing a good local network and learning the language. The question on China’s weaknesses raised a few eyebrows since the areas mentioned by Mr. Gao were helicopters and nuclear power. China has showed an interest in buying helicopters from an European manufacturer but that has been turned down. However, for the Chinese this will become an opportunity to emerge as the largest helicopter manufacturer in the world in a few years. So never say NO to a Chinese!