China economy transition

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China economy transition

Post by Admin on Mon Sep 15, 2014 4:09 pm

China is currently at the crossroad of transitioning from a low-cost manufacturing mecca to an innovation-based, high margin economy.  What challenges and opportunities await the world's second largest economy in this transition? Rolling Eyes

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Re: China economy transition

Post by Jessica_Ren(Yan Jin Ren) on Mon Sep 15, 2014 5:59 pm

We should build a social market-oriented innovation environment to encourage independent innovation and intellectual property to devlop high-tech industry.

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Re: China economy transition

Post by Jessica_Ren(Yan Jin Ren) on Mon Sep 15, 2014 6:03 pm

The government management style should transit from a planned economy to a more market economy.

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Re: China economy transition

Post by Jessica_Ren(Yan Jin Ren) on Mon Sep 15, 2014 6:11 pm

With higher intellectual labor-intensive and Multi-level, diversified market resources in China,it wil be very valuable strategic resource for economies in transition, moreover, therei is still considerable room for technical innovation of traditional industries and industrial chain in China to promote this transition.

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Re: China economy transition

Post by Linda Liu on Mon Sep 15, 2014 7:10 pm

Challenges
The economic transformation may increase collapse of those small private owned companies which is small and don’t adapt innovation
Since our Export rely on low-cost labor-intensive industry (low price) for a long time, innovation-based high margin business model may increase the price of product which will lower Export products competitiveness
Opportunities
Create jobs and good for young people who is full of passion and good at learning new knowledge
Promote the Management skill of those Chinese companies who have certain foundation and open minded
Build more outstanding Chinese enterprises ranking in world top 500


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Re: China economy transition

Post by leo chen on Tue Sep 16, 2014 3:05 am

Transition is on the way though may hurt the body itself, but decisive ambition from "top design" creates lots of expectation from both entrepreneurs and executives about to be entrepreneurs.
Despite of reform risks been argued by various partitions, what really matters for business managers is to identify mega trend and follow your core capability with a differentiated business scope.
Mobile internet, Crowed funding, Greentech, Healthcare, High end manufacturing, Tech-innovation etc., the list can be longer as imaged.

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Re: China economy transition

Post by Lily Zhang on Tue Sep 16, 2014 7:29 am

In front of China S Economic Transition, there are three big challenges we should know. First, economic growth can not guarantee fully employment, we still have tremendous employment pressure at the moment. Secondly, the growth rate for fixed-asset investment had been excessively fast in the past years. Meantime, we almost ignoed the R&D investment and innovation on the way. Thirdly, on a macro level money supply is overflow but in microcosm this supply is insufficient as many development enterprises couldn't a credit from banks. However, we should value the opportunities on the other hand. We can build OBM and transfer from a low-cost manufacturing mecca to an innovation-based, high margin economy. We will have more employment opportunities to improve our national power and nation quality and effectively.

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Re: China economy transition

Post by Rony on Tue Sep 16, 2014 12:04 pm

Prime minister Li Keqiang said it's key to realize reducing administrative decentralization for government reform during the economy transition, goverment won't make more decisons instead of market. Truely, in the planned market age in the past, the huge size of econoic growth led by government hided many problems on China economic itself. As we know, the voice from questioning the structure, sustainbility of economic have been heard for long time. So now, it's time to let market to decide the resource distribution, to elimate the blocks from excessive government power, to build a more fair innovation plaform for all kinds of capitals go in, to enourage private enterprises to compete in some areas which were used to be limited


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Re: China economy transition

Post by alar on Wed Sep 24, 2014 11:28 am

First, demographic dividend reduction, high-tech talent, such as engineers dividends, being released; while aging is simultaneously drag the supply and consumption, long-term negative impact on economic growth;
Second,dividend policy release, prolonged conflict right government intervention and market liberalization, leading companies can not develop normally subject to many constraints. Through the development of market liberalization, as well as to combat corruption, can effectively improve market competition environment. We need speed ​​up transformation.
Third,upgrade from low-margin manufacturing industry, emerged from the housing bubble, and now a long-term problem, which would mean the government from relying on investment-led economy to a new economy relies on advanced productive forces driven.
Forth,United States exit QE in October , cancel Considerable time in late December.The rate hike will result in RMB settlement will decline, both in the United States in the current environment of non-international hot money withdrawn from the Chinese market, there will be downward pressure on the domestic market.
Fifth,Interest rate market, we will take the final deposit market, making the overall interest rate to go down, the overall asset pricing at the line, and lower financing costs, positive real economy, especially small and medium enterprises. However, the current liberalization of interest rates, it will make short-term interest rates up, mainly due to loans related to the prevalence of the shadow banking business, banks are more willing to lend funds to large state-owned enterprise's sake

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Re: China economy transition

Post by alar on Wed Sep 24, 2014 11:32 am

Sixth,our awareness of intellectual property protection are strengthened. Issuance of licenses and other media content,such as issues of youku,tudou,kuaibo

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Re: China economy transition

Post by Cai Wei (Nathan Cai) on Thu Sep 25, 2014 1:15 pm

Chellenges:
China will face economic growth slow down during the transitioning.

Opportunities:
Chinese economic structure will be reasonable based on the transitioning.

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Re: China economy transition

Post by Cynthia (Sui Xin) on Thu Oct 09, 2014 7:09 am

Challenges:
From national policy perspective:
1.  It is much lower than other developed countries which the proportion China put innovation and R&D expenses every year out of GDP.
2.  Scientific research evaluation system is still on the way to be improved, not only should we attach importance to the scale of scientific papers and patents, more should attach great essential to the efficiency and quality of output, more attention to the follow-up into productive ability.
3.  The national intellectual property protection law remains to be perfect, in the mean while research and development of innovation often consume a lot of time and money but when it tends to be copied in the innovation incubation which will frustrate the original creator.  
4. Developing high-tech industry will kill large quantity mid-classes work opportunities
From the social resources perspective:
1. Younger talent structure that caused by a large number of enrollment expansion since 1999 is not a high efficiency structure.
2. High-tech brain drain is serious due to the lower quality of the scientific research and innovation software and hardware facilities compared to developed countries.
From the enterprise perspective:
1. R&D funds occupy less proportion of main business income, while the original innovation ability is weak which instead of imitating foreign innovation.
2. Among all effective invention patents in China, there are foreign companies holding patents are more than half and foreign-funded enterprises is accounting for a third.
3. The high-tech industry economic benefit is not optimistic, output, labor productivity, return on sales is on the low side three indicators, which do not have much advantage than traditional industry. There is no strong attraction for capital investment.
Opportunities:
1. The innovation-based, high margin economy will increase efficient use of resources and create more wealth.
2. The transitioning will reduce environmental pollution and resources waste.
3. The high-tech industry booming will create high quality national brands, which could meet domestic demand for high-tech products/service which could no longer absolutely dependent on imported.
4. The transitioning will create high industrial value for China's exports.

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China Economy Transtion

Post by Steve Li(Li Rucheng) on Fri Oct 10, 2014 6:32 pm

As for the ongoing transition,how to come up with the pace for the future need,China could do somethings per:
1.To cultivate the most talent people for the creative designing as well as business innovation which are the precondition for the transition from the low-cost production to high profit industry.It`s overall chanllenge to China government and its education system.
2.To pay more in investment&motivation for the business and products`  innovation.In China,few enterprises would like to invest too much to attempt new things.As business unit,company is supposed to have long term vision rather than short-term interest.
3.As for individuals,we should have new trials to convert or break the previous thinking style.only in this way,can we survive in the future career or in future fierce competition.

Of course,we China have many other problems ,such as pollution,aging,food safety,industrial structure
and so on.

So it is never easy for the China to go ahead with the transition smooth as we expect in future,I`m not pessimistic,but conservative optimistic! bounce

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Re: China economy transition

Post by Joanna(Zhang Xiaojing) on Wed Oct 15, 2014 1:48 pm

A lot of foreign companies in China have found out the low cost is not the advantage of China any more. A lot of companies either relocated their plant into the third line cities or transfer to Africa to low down their labor cost. China is mainly the manufacturing county but not innovating. So under current economic environment, China is facing:
Challenges:
1. Simple manufacturing is losing its advantage, profit proportion is decreasing;
2. Chinese labors are losing their jobs which don’t need brain thinking;
Opportunities:
1. Chinese companies should more focus on innovation but not simple manufacturing, create his own completive mastery; Put more money on research department;
2. Chinese companies should purchase more automatic production lines to release labors, improve the productivity, the same time put new ideas into practice;
3. Chinese education should more focus personnel, dig out the potential from the childhood, more career consultant should analyze the personal development and put him/her on the right place;
Transition must be made from the low cost manufacturing to high level innovation. Chinese should stand up the fight for the economic growth but not dragged by other countries.

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Re: China economy transition

Post by Yuzhen Bai(ERIC) on Thu Oct 16, 2014 10:30 am

In my opinion, China will insist on the economy transformation for market-orientation, and the Chinese government will gradually delegate most approval authority to the local government, even leave the problem to the market to decide. What's more, the density manufacturing economy is not suitable for China for further improving her modernization and automation level, the aim of economy transformation is to free people from the repeated physical labor to the innovation work, to produce more value. Environmental protection spurs on China to transform high value-added economy.

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Re: China economy transition

Post by Yuzhen Bai(ERIC) on Thu Oct 16, 2014 10:33 am

In my opinion, China will insist on the economy transformation for market-orientation, and the Chinese government will gradually delegate most approval authority to the local government, even leave the problem to the market to decide. What's more, the density manufacturing economy is not suitable for China for further improving her modernization and automation level, the aim of economy transformation is to free people from the repeated physical labor to the innovation work, to produce more value. Environmental protection spurs on China to transform to high value-added economy.

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Human pay important role on this topic

Post by Jimmywang(Wang Jiming) on Thu Oct 16, 2014 4:19 pm

In my point of view, economic transition cannot do it without human:
1. pay sufficient efforts to promote anti-corruption, establishing and keep improving legal system for economic field, there are laws to abide by and ensure that the laws are strictly observed;
2. Cultivate, hair stirring economic management talent, give full play to the subjective initiative in the economic field;
3, More open, attract foreign talents, build a benign economic cycle system.

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the road ahead will be long and our climb will be steep

Post by Wu Suling on Thu Oct 16, 2014 6:48 pm

Personally think that China's economic transformation is a complex and lengthy process.

Challenge: The biggest challenge is the demographic dividend reduction. Over the years, the rapid development of China's labor advantage, the engine of economic prosperity. With the baby boom receded population aging intensified. China's low labor cost advantage is weakening, which greatly affected the pattern and pace of economic development. China had to improve economic growth, carry out structural reforms.

Opportunity: As a large-scale economies, strong manufacturing capacity and consumption capacity remains for a new stage of China's development has laid a foundation. Maturing and open market for culture and leisure, retirement health care, high technology, the Internet, the development of energy-saving environmental protection industry has provided a powerful impetus. Science and technology to enhance productivity in agriculture and industry, mining development potential of the tertiary industry.

About Implementation Plan: Transformation and national policy are inextricably linked, different countries for different industry needs policy guidance and support.
1 transition first need to maintain economic shape diversification, and focus on real economic return. Agriculture, manufacturing and financial policies given tilt, helping industrial interior upgrades.
2 to encourage and support the growth of science and technology, environmental protection and other sustainable industries and growth of enterprises.
3 for culture, leisure, tourism, FMCG field, increase the degree of openness. Give full play to the market economy vitality, competitiveness, creativity.
4 on the traditional monopoly industries, and gradually into the market competition mechanism, optimize and improve the efficiency of such enterprises.
5 of emerging industries, such as Internet banking, health pension industry, etc., in good barriers to entry, supervision and management, while developing countries should be given the freedom and opportunity to market to explore.

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Re: China economy transition

Post by Edward(Wang Yunzhi) on Fri Oct 17, 2014 4:59 pm

Nowadays, China is facing with a lot of challenges, some are inside the country while others are outside the country. Let me list them as following:
1. It is clear that the growth rate of ecnomics slows down, which may inpact almost all of the regeins of chinese business.
2. The trend that the growth rate of ecnomics slows down can't be avoid, so it is urgent to find a reasonable growth rate. But what is the 'reasonable growth rate' remains question.
3. There are a lot of problems inside china, among them environment problems and food safety problems are perhaps the biggest two in recent years.
4. China is one of the most unreasonable countries in income distrubution, it will increase internal contradictions inside the country.
5. For some history reason, China still has many territorial issues with Japan, South Korea, India and Taiwan.
6. A lot of children cannot get good education inside China.
7. Talent people in China are more likely to migrate to developed country.
8. As the world economy regional blocs, protectionism is rampant, China's economy is facing fierce competition.
There is also oppotunities in China,just list as following:
1. It is a chance to improve the sense of happiness through Reform and Opening.
2. The Chinese Yuan have the chance to become an international currency.
3. Companies in China have the chance to become an international company like apple.
4. China have the chance to return to the most powerful country in th world.
Of course, to acheieve the oppotunities, China still has a long way to go, the most important thing is that China must keep innovation.

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About Economic Transition

Post by Rivaliang on Tue Oct 21, 2014 4:27 am

By LIANG YAN
During the last 30+ years, China had experienced fast economic development, primary driven by exports, fixed investment and a huge low-cost labor force. However, the old model does not work now when China has become a middle income country. It requires for a higher margin and innovation-driven economy. During the transition, there are opportunities and challenges.
Major Opportunities:
1) The international competiveness, anti-risk capabilities, and comprehensive national strengths of China were enhanced greatly. The government had the confidence to accept a slower but better quality growth rate, which provides a better economic background for restructuring of companies.
2) China’s retail sales look bright in the near future. In the next decade, domestic consumption will boost the economic growth, in addition to the export and fixed investment.
3) With the economic globalization, many Chinese companies have went out of China, and learned to play active roles in the international market. Experiences in a bigger market will further accelerate the process of transition.
Major Challenges:
1) During the process of economic transition, the request for low-end labor forces will be reduced, instead, the request for well educated, creative, and multifunctional talents will be increased. Without reform in current education system, there will appear the situation with high rate of layoff and shortage of talents at the same time.
2) With the disruptive innovation and fast development of some private companies, positions of former monopolies are threatened. For example, China Telecom is threatened by Tencent’s Wechat, and banks are threatened by Alipay. These monopolies could become obstacles in the process of transition, as they will defend their vested interests.
3) Disparities in incomes among people at different levels and between rural and urban citizens are now more severe than most countries in the world. Without effective tacking of this problem, the social stability could be shaken, not less the economic transition.
The task of economic transition is also imminent, and has to be fulfilled within 3-5 years. It needs efforts of all Chinese people and the determination from the government to realize it.

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Re: China economy transition

Post by Zhang Yingying - Laurel on Wed Oct 22, 2014 10:31 am

Since most buddies have contributed their opinions on the topic, here is my little piece:
The rapid growth of economy in the past 30 years benefited from access to the unique resources and support of the unprecedented demographic dividend and reform dividend. But with the disappear and weakening of those elements that support the rapid growth rate and the hazard to energy, land and environment, it is hard to sustain the high-speed development of economy.
China has started stepping into the medium-income nations, which means we lost the advantage of cheap labor force and yet processed the advanced technology. With the gap between the rich and the poor increasing, we will get stuck in the “middle income trap” if we cannot resort to proper solutions.
The most important is the transformation in the pattern of economic growth, which is structure optimization and industrial integration during which process we will encounter the following opportunities and challenges:
Opportunity:
1. The development of strategic emerging industry such as environmental industry, healthcare industry and financial industry
2. Leap-forward development of service industry.
3. Technology innovation: the Mobile internet big data will overturn the business operation and lifestyle
4. The opportunity for the local companies to go abroad
Challenges:
1. The economic development can’t bring the full employment
2. Rapid growth of the investment on fixed asset with less allocation to R&D and lower efficiency of R&D
3. The paradox between low CPI and people’s expectation of high inflation rate.
4. The excess supply of money in macro level and short supply of loan in micro level.
Strategy:
1. From the reform of state-owned enterprises to the reform of government
2. From the reform of commodity market to capital market.
3. The root of reform is to carry out the innovation strategy of the nation.

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Re: China economy transition

Post by Wu Shujun(Helena Wu) on Thu Oct 23, 2014 6:30 am

After almost 30 years fast development, now China economy is at the crossroad of development. For past, surge in spending on investment really stimulated China economy, but it also created greater excess capacity. According to China Economy Analysis, It is almost 50% for investment to spur economy, consuming only 35%. When the materials cost, labor cost, land cost and environment protecting cost all go higher, but with greater excess capacity, it is not possible to transfer relative costs to the selling price of products, which will damage our real economy. So it is really crucial for China government to find workable way to adjust China economy structure.

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Re: China economy transition

Post by Wu Shujun(Helena Wu) on Fri Oct 24, 2014 4:45 am

Jessica_Ren(Yan Jin Ren) wrote:We should build a social market-oriented innovation environment to encourage  independent innovation and intellectual property to devlop high-tech industry.

Jessica, I agree with your point. Nowadays, China is still have multiple opportunities to have one healthy economy , but the precondition is Chinese government must establish reasonable and workable polices to stimulate innovation and protect intellectual property. Especially, With new development models based on Internet and innovation, and with solid netizen base, China is embracing a unique and priceless opportunity to develop products with high value-added. In 2014, Top 10 most innovative companies are all related to internet industry or business model innovation. Among them, several companies are competing with famous companies in the world.

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Re: China economy transition

Post by Leo Yao on Fri Oct 24, 2014 9:38 am

Though China is the transition time, it is not ready to move to innovation based economy, even for the fast growing internet industry, the local companies are coping the business model from silicon valley, others like automobiles, aviation and energy are far more less innovation.
The problem is, since the lobor cost is becoming higher, China, the world factory, has to seed a new develop model for the industry. The Challenge is, contrast to innovation, the umemployment rate in some traditional industry will become higher. The Sate-Owned comanies are still well protected by the government that makes them are not so creative.
The oppertunity is, China has the world biggest market, and with the technology of industry internet and mobile internet, China economy still has a big potential.

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Re: China economy transition

Post by Stella_Huang( Huang Jing) on Mon Oct 27, 2014 5:43 am

On the way of transitioning to innovation-based, high margin economy, China is always accompanied by lots of challenges and opportunities. Based on the Chinese realistic political, economic, social and technological situation, it reflects the two sides from below points in detail.
Challenges:
1. The government and enterprises are mean to invest on R&D so it results in the lacking of creativities which is motive power of innovation industry.
2. China has weak intellectual property system so that the intellectual property right cannot be protected properly in China. This may severely increase the risk of business management and lead to huge loss of enterprises.
Opportunities:
1. The transitioning will promote the development of emerging industries which could highly contribute to the economic growth and increase the employment.
2. This transitioning will push the informatization of enterprises. The more and more complete E-business platform and changing consumers’ payment habit will enlarge the informatization.


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Re: China economy transition

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