1. TAKING IT TO THE CITIES
China’s urbanization rate was 53 percent by the end of 2013. Compared to the US or Brazil, which both have an urbanization rate of close to 85 percent, China’s market has far more growth potential than many other major economies.
2. WORLD’S WORKSHOP GOING STRONG
China is already the world’s second largest economy, and, if it continues to grow at 7 percent annually, will also continue to be the most important driver for global economic growth for many years to come. China’s role as the world’s workshop is secure, and it is here where the greatest opportunities for global growth exist.
3. PRIVATIZATION’S POTENTIAL
The prevailing view seems to be that the dividend China can generate from reform has ended, but I beg to differ. An increasing amount of deregulation in industries, including financial services, media, sports, healthcare, and telecoms, can pay dividends for years to come. The US spends about 18 percent of its gross domestic product (GDP) on healthcare; in China, that number is less than 6 percent.
4. AT YOUR SERVICE
China’s service industry accounted for 46 percent of the country’s GDP in 2013, compared to around 80 percent for the US over the corresponding period. Again, that gives China a lot of room to grow as its markets mature.
5. OPEN FOR BUSINESS
Contrary to popular belief, China is very open economically and has embraced globalization. For the past two decades, it has been the second largest market for foreign direct investment – a key indicator of economic openness. China is often characterized as employing export-led growth, but the majority of Chinese exports have come from foreign-invested companies in China: 2012 was the first year in a decade that foreign-invested enterprises contributed less than 50 percent of China’s total exports. China’s economy is not dominated by any specific model, and every major variant of management model has played a significant role in China’s economic progress. This will give China a strategic advantage as the challenges of globalization continue.
6. AGE OF ENROLLMENT
There are more students studying abroad from China than from any other country. These students will return with new ideas and new skills, along with a more global mindset. In addition, greater affluence has led to a new wave of emigration, which has resulted – for the first time – in more Chinese attending the world’s top schools.
7. EAGERNESS TO LEARN
The Chinese people have an incredible curiosity and ability to learn. Whether it is soaking up information from others, or innovating and localizing, I believe China is unique in this regard. China has an open-mindedness about new ideas that does not exist in other countries.
8. SCRAPPY STARTUPS
The entrepreneurial drive of Chinese businesspeople is one of the most important factors in China’s economic success. This drive, typified by e-commerce and mobile internet companies, will continue to keep China at the forefront.
9. MELTING POT OF GOVERNMENT
China has more experience than many other countries with a variety of political and economic systems, including communism, socialism, capitalism, planned economy, and market economy. This will serve China well when faced with uncertainty, as it’s forced to reevaluate and make hard choices.
10. MERITS OF MERITOCRACY
China’s political system is not to everyone’s tastes, but it has some distinct advantages: rule by elites attracts the best, and its extensive executive emphasis, under which candidates must rise up rank by rank, gives China’s leaders essential experience at all levels. They have greater knowledge of all parts of the country, and thus are better informed and more able to represent the people.
11. DEBTOR TO (ALMOST) NONE
Sovereign debt in China accounts for roughly 15 percent of GDP – far lower than in many Western countries – providing more stability for China. In addition, China has the largest foreign exchange reserves in the world.
12. LEGACY OF EQUALITY
Mao Zedong has long since departed, but his influence continues to be felt to this day. In particular, the standardization of the Mandarin language stems from his legacy, as does the liberation of women. In China, women are far more literate, educated, and integrated into society than in many other Asian nations.
13. NUMBERS GAME
The size of China’s population, another of Mao’s legacies, will always be an important factor for Chinese competitiveness. India may surpass China in terms of numbers, but literacy rates – especially for women – do not compare.
14. BACK ON TOP
China is not “rising” so much as it is returning to its historical position in the world order. In the 1820s, about 30 percent of the world’s GDP came from China – equal to the sum of Canada, the US, and Europe. After dipping below 2 percent in 1978, it now stands at around 12 percent, so there is a long way to go to return to its earlier prominence.
15. GOOD FORTUNE
Finally, every dynasty in history that was open has fared very well. If China continues to open – and the government is committed to further reforms – history suggests that more good things will happen to China!