Predicting China’s future is hard given its size, history and complexity of population, but it’s easy to share an opinion about the country—anybody can come in and say something about China, whether it’s news media or self-styled pundits. The cost of entry for having a view on China is so low that basically anybody can have one. The ongoing topic is the Chinese economy: bulls and bears have been arguing non-stop about the state of the economy. Damien Ma, Fellow of the Think Tank at the Chicago-based Paulson Institute, talks about how find the true signal in the noise, and discusses the less relevant factors one should dismiss.
Under the banner industrial policy “Made in China 2025”, China seeks to replace the advanced foreign manufactured goods that it has long relied upon with domestically-produced goods. But the effort is spooking the foreign business community, and the plan may not address China’s most genuine needs. Precise details of the implementation of the grand policy are only now beginning to emerge. For Chinese companies, the real long-term impact of the plan is at best unclear. But for foreign companies, although there will be business opportunities in the short-term, the plan as a whole presents big challenges to their future in China.
After Chinese President Xi Jinping took a strong stand in support of globalization, a clear line was drawn between him and US President Donald Trump. But China and the US are not swapping roles, said Martin Wolf, the chief economics commentator at the Financial Times and a long-time observer of the Chinese economy. Wolf suggested that China, despite its rapid growth and maturing economy, remains a developing country and will not take on the mantle that the US has in the post-war era. “People don’t know what the true nature of the so-called ‘Trumponomics’ is,” said Wolf in his interview with us.
Foreign Direct Investment has been an incredibly important catalyst for China’s economic development, bringing in the capital, technology and know-how that made China the world’s factory. But China is no longer so fresh and attractive to foreign investors as return on assets is falling. FDI to China increased 3.9% on the year to RMB 731.8 billion in the first 11 months of 2016—the 2015 expansion was 5.6%. Besides, increasing labor costs have become a heavy burden to foreign enterprises, especially manufacturers, who can cut costs by moving to Southeast Asia.
Chinese companies have been on a buying spree around the globe over the past two years. 2016 witnessed a record level of Chinese outbound mergers and acquisitions (M&A) activity, with 932 deals worth over $220 billion taking place, an increase of 246% compared to 2015, according to PwC China. However, the surge in outbound investments has brought concerns from both Chinese authorities and recipient countries; the latter are becoming more cautious regarding the presence of Chinese capital in large-scale deals in key industries. Affected by such concerns and tighter government scrutiny, the number of M&A deals might not be as numerous in 2017 as in 2016, but the trend will not stop.
Traditional offices are disappearing—some are being redesigned to be beautiful spaces that employees actually want to come to work in and meanwhile, humbler versions of the Silicon Valley spaces are increasingly popular too. This year, about 1 million people will work in a co-working space. In ten years, that number will top 1 billion. The co-working idea reflects the trend that companies keep trying to move more of their balance sheet from fixed to variable costs, and the supply of office-less workers keeps rising. So which vision of the future will win out—the palace or the co-working hive?
Fulfilling his campaign promise, US President Donald Trump took the United States out of the Trans-Pacific Partnership (TPP). With that failure, the spotlight has now fallen on the Regional Comprehensive Economic Partnership (RCEP), a proposed trade deal among 16 countries in the Asia Pacific region which is widely seen as a Chinese initiative and a way of pushing back against US influence in Asia. However, compared to TCC, the RCEP has a much narrower scope and labor, environment, IP, competition policy, issues screaming for attention will not be significantly discussed. Meanwhile, TPP is not completely down without the US: Strong incentives for the TPP or a “TPP-lite” will remain.
Management was never easy—“like herding cats,” as the old joke puts it—but in the old days, the cats were at least in the same alley. Today, management may be more challenging still, as executives must lead an ever-changing stream of employees and independent contractors—who may or may not be in the same building or even in the same city—as they navigate through an ever-changing technological landscape, and deliver on objectives that may also shift. So what are the positive and negative aspects of working remotely? How is the employee mindset and the management style of employers affected?
“Innovation” is difficult, yet the word itself is so overly used that the meaning of it has become hollow. Some people consider being “innovative” as being “lucky.” Yet for Clay Christensen, a business professor at Harvard, innovation is about finding the “jobs that need to be done” in our lives. In this interview with CKGSB Knowledge, he argues that companies should not take the task as akin to gambling. Instead, companies should adopt a more focused, process-oriented approach of finding the “jobs” that customers need to do in their lives, and then create products that make those jobs easier.
Do you like to work in a café like Starbucks or do you prefer staying in your cubical at the office? Today, fewer people are working in traditional offices, as most administrative work is either being automated or outsourced to cheaper markets, reducing the need for the in-house typing pools and IT services that once took up a lot of room. Young professionals, instead of being assigned to a desk, like to choose where they sit and work. The ideal place should be comfortable, with an open, cozy coffee-shop style. A boss-less office space is becoming increasingly popular.