‘New normal’ offers growth opportunities
Print Edition
CHINA’S ongoing transition to “new normal” with slower but better growth means new investment opportunities from e-commerce to high-end manufacturing, attendees at the Boao Forum for Asia agreed yesterday.
“Aggravated overcapacity would not be an issue if investment was channeled to sectors with capacity shortages,” said Justin Yifu Lin, a former World Bank chief economist.
China is implementing supply-side structural reforms, with a focus on reducing overcapacity, destocking, deleveraging, reducing costs and shoring up weak growth areas. The reform will advance economic restructuring by expanding medium to high-end supply.
“Investing in industrial upgrading and technological innovation would be an entry route for businesses seeking opportunities in China,” he said.
At the sub-forum “Dialogue of Asian Civilizations,” former Pakistani Prime Minister Shaukat Aziz highlighted the cooperation opportunities the Belt and Road initiative had brought to his country and to regions along the routes.
Aziz said trade and investment should also be enhanced via local mechanisms including ASEAN.
Nobel Prize laureate Mo Yan shared his thoughts on how online shopping had made exchanges much faster. He said his daughter had bought him some dates from the Middle East, which arrived just a day after she had placed the order.
“I couldn’t imagine that the dates would be delivered so quickly.”
China will set up more cross-border e-commerce pilot zones to attract businesses, create jobs and nurture new business models that will boost foreign trade and stimulate the economy, the State Council said in January.
E. Allan Gabor, president of the Asia-Pacific region for Merck Biopharma, said he was confident that China, one of the biggest markets for Merck, will offer more opportunities due to the rising middle class.
“In 2016, the Chinese government implemented the two-child policy. This will bring additional demands on the treatment and service level in the hospitals ... we hope to provide better products and services to patients,” Gabor said.
According to Gabor, although the Chinese economy has entered a “new normal” phase, the demands of its 1.3 billion population continue to rise, which is the driving force for economic development.
China, as the largest market for goods such as automobiles, cosmetics, food and large-screen displays, provides numerous business opportunities for global investors, Gabor said.
“China is full of opportunities under the backdrop of ‘new normal,’ ranging from restructuring to urbanization, but investors should be prepared and invest in fields that need upgrading,” said Zhang Shuyu, a researcher with the University of International Business and Economics.
Douglas Oberhelman, chairman and CEO of US construction and mining equipment producer Caterpillar, said China’s ongoing transition to slower but better growth will benefit multi-nationals.
No economy the size of China can sustain double-digit growth, and the transition to 6.5-7 percent growth is “very healthy,” he said.
Speaking of the 13th Five-Year (2016-2020) Plan, Oberhelman said: “What’s contained in that plan is very appropriate for the current times.” China’s pursuit of cleaner air will create business opportunities for Caterpillar, as it can produce a broad range of environment-friendly machines, he said.
Despite the current slowdown, China is still growing twice as fast as the global average, he said, adding that a growth rate of 6.5-7 percent for the next five years will require more investment.
Zhu Min, IMF’s deputy managing director, said in January that China’s economic transformation was not fully understood. He suggested that the Chinese government increase transparency and launch publicity campaigns to let the world know about the changes under way in the country’s economy. Besides, the outside world has to understand the problems China has encountered in the process of its economic transformation.
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