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What’s Next in China? Hear from Two Leading China Commentators
Fran O’Sullivan (Moderator)
- Andrew Browne, Pulitzer Prize China Columnist, Wall Street Journal
- David Mahon, CEO, Beijing-based Chief Executive of Mahon China
Session four provided a change of pace, with an ‘on the couch’ discussion featuring two speakers with deep knowledge of the Chinese economy. Both speakers were cognisant of the challenges facing the world’s second-largest economy: slowing economic growth, and the shift from export- and investment-led growth to domestic consumption.
Andrew Browne of the Wall Street Journal highlighted that the attempt to manage this shift was bringing contradictory goals of the Chinese government to the fore. Specifically, an attempt to drive innovation runs counter to the Communist Party’s desire for control over so much of the country’s culture and economy. David Mahon said the government can and does “get in the way” as a result of this.
The rise of the Chinese middle class is an unstoppable force – 100 million Chinese people travelled out of China last year, and the projection is that it will more than double. That presents enormous opportunity for New Zealand.
Mahon thinks we don’t pay enough attention to the local Chinese market in New Zealand. But he added that changes out of China are so new, and so fast, that we have a reasonable excuse. He thinks there are such great numbers coming from China who will help NZ realise its potential, that issues surrounding the Chinese community, some of which could be perceived as racist, will be quickly overcome.
Although China presents a huge opportunity, Browne warns against large companies putting all their eggs into one basket. That said, if a company wants to be globally competitive it really has no option but to be in China. “If you’re not in China, you’re not keeping up with your competition, and if you’re not number one, two, or three in China, you can’t be number one, two or three in the world.”
From New Zealand’s perspective, David Mahon commented that both political parties are guilty of a failure to diversify the way we do business with China currently. Alongside the need for this diversification, we need to generate trust in the relationship and, said Browne, we simply need to “open the door!”