What is in Store for China?

Ever since the China’s reformation and renaming as the “People’s Republic of China”, the country has steadily grown into one of the world’s most influential nations and is now a global powerhouse.

In the future, experts expect that China will experience steady economic growth. However, China’s economy will more likely experience a decline in the rate of growth over the next five years. Still, despite a decline in the rate of growth, China’s economy is likely to become the world’s largest by the year 2017.

As more and more companies gravitate towards Asia as their main choice for the placement of their headquarters, offices, production and manufacturing plants, and business expansions, China will likely be the first country to which multinational companies will migrate.

This will likely lead to a major change in the Chinese Culture, evident even now in how the government scrambles to look for ways to handle the clash of cultures and how more and more Chinese have become adamant in fighting for their rights, instead of choosing not to confront any opposition.

With the Chinese government focusing on the satisfaction of Chinese employees and their benefits, the government itself may be the time bomb waiting to explode, with major restructuring expected to happen in the next few years.

The rapid growth fueled by infrastructure, industrial exports, and real estate has to stop, says Beijing. In order to improve the economy, loss-making state-owned enterprises will need to be dismantled, and private enterprise will be expected to provide jobs (even if it means opening the doors to foreign enterprise), particularly in the service sector. All of this will serve to slow down growth.

According to Gordon Orr of global management consulting firm McKinsey & Company, political and economic leaders in China have clear plans and supporting policies that they are sticking to.

One of these policies is the quashing of corruption. This is expected to take a few years, since the acceptance of gifts and kickbacks has become embedded in many businesses, in both the private and public sectors. Another policy is the urbanisation movement: policies surrounding urbanisation have been relaxed, and experts therefore expect a lot of human and economic movement towards smaller cities in the near future.

As a result of privatisation, and also because many job sectors (such as banking and airline ticketing) are being affected by technology, Chinese consumers will feel less financially secure. Government is expected to focus on net job creation, and companies are likely to hire more information technologists to improve competitive position.

Put simply, China is a powerhouse and will remain so in the upcoming years, whilst experiencing major “pseudo-reforms” brought about by the migration of westerners and their assimilation into the Chinese culture and community.