Private sector

Another important point to keep in mind is that the expected growth will come more from the private than the state-owned sector. Indeed, the Chinese government will be providing incentives to the private sector to increase domestic consumption and raise productivity.

While an increasingly privatized Chinese market with greater domestic consumption will be a welcome development for the world economy, it also means that competition in China will intensify. Local market players will therefore have to become more efficient and resourceful.

In fact, initial results from our survey point to the fact that international companies in China perceive local players as their greatest competitors. This is a marked shift from the past, when they viewed international rivals as their greatest threat.

Harnessing the productive potential of technology will be a crucial step. Indeed, for companies to improve internal efficiency, it will be essential for them to implement greater automation — using more automated machinery to produce goods or using better software and IT systems to improve business processes.

In the context of such a competitive Chinese environment, being successful will also mean having the right mix of imported and locally developed products, equipment and IT.

China Integrated Co provides services for the set-up, acquisition and development of businesses in China. The opinions are his own.