China is rapidly becoming a major industrial competitor in high tech and growth sectors. Its economic success and related industrial policies have received a high degree of attention, especially in light of its capacity to challenge the leading position of advanced economies in several fields.
China aims, through the 'Made in China 2025' strategy, to become a world leader in key industrial sectors. In these sectors, it strives to strengthen its domestic innovation capacity, to reduce its reliance on foreign technologies while moving up in global value chains.
Over the last few months, COVID-19 has spread across the world, uniting humanity in a shared experience that has highlighted the vulnerability of our societies. As the first country to grapple with the crisis, China has been on the frontlines both of post-COVID-19 economic recovery, and of the societal changes the pandemic has precipitated.
For global technology executives, following developments on the trade front can be gut wrenching. Until very recently, the technology industry was, for the most part, left out of the tit-for-tat tariff increases announced by Washington and Beijing. But suddenly, the tech industry finds itself at the center of an escalating trade war.
The relationship between China and the world now is changing. The McKinsey Global Institute’s (MGI) new China-World Exposure Index shows that the world’s relative exposure to China has increased, while China’s to the world has fallen. Accompanying this shifting exposure are the signs of stresses in the relationship. Trade disputes are making daily headlines, new rules are emerging to evaluate technology flows, protectionism is on the rise, and geopolitical tensions are becoming more heated. The way ahead is uncertain.
Pundits have been buzzing in recent months about the slowdown of China’s economic juggernaut. There is evident cooling of GDP growth, especially since the middle of last year, and sales of cars and smartphones have been dropping steeply. Some high-profile companies are flashing warnings of plunging sales and some even of job cuts.
Despite the turmoil brewing over an unfolding trade war, China remains a critical proving ground for multinational corporations. Ten years ago, for Western multinationals entering or expanding in China, the main question was “Is China different?” Most eventually answered “yes.” Rather than treating China as any other market, companies began to shift strategies and allow their Chinese operations to do whatever it took to win.
As of early 2018, a new elevated railway in Hanoi is giving commuters a smoother journey into the city. The 13.5 kilometer (8.4 mile) line, which snakes across the Vietnamese capital’s shimmering West Lake, is one element of a much larger rail project that will connect the landlocked Yunnan Province in China directly to the northern Vietnamese port city of Hai Phong, providing access to markets in Southeast Asia and beyond.
