(Yicai Global) June 26 -- Our world is in transformation and so is China. On one hand, Chinese society is facing post-COVID recovery, an ageing population, slowed economic growth and the pressure of carbon reduction. On the other, China is presented with major opportunities in green growth, technology innovations, as well as a booming digital economy.
These changes are closely interacting with the evolving expectations of the population, including a reassessment of what is worth pursuing in life.
As the country enters a new developmental stage, we wanted to take stock of some of the most important trends in China, which a carefully selected group of experts and thought leaders helped us unpack below.
Toward a new paradigm
“The miracle of China over the past four decades is not the nation’s record-breaking GDP growth, but the unimaginable transformation that has taken place for hundreds of millions of Chinese and their children within a single lifetime,” says Keyu Jin, Tenured Associate Professor in Economics at the London School of Economics. She is also the author of The New China Playbook: Beyond Socialism and Capitalism
Life expectancy increased by nearly 10 years and infant mortality dropped by more than 80%, and more than eight hundred million people have been lifted out of dire poverty over this period.
“The country has reinvented itself as a global power based on a unique political and economic model,” Professor Jin explains.
However, China now is entering a different economic growth phase, one that’s slower but hopefully higher-quality – driven by sustainability high productivity and innovation.
A ‘changing gears’ transition
China’s changing growth pathway is under the radar for experts scanning trends on the horizon. Professor Xiaolan Fu, Founding Director of University of Oxford’s Technology and Management Centre for Development, thinks that the key to China’s economic transition is to be found in innovation.
“Innovation and modernization are likely to be the major engines of the country’s next wave of growth. First, however, the next few years will see a ‘changing gears’ transition period – not least due to the ongoing recovery from COVID-19,” she explains.
“How long this takes will depend on to what extent, and how quickly, China can transform into an innovation-driven economy. The coming transition period will likely precede faster economic growth and maybe a gradual buy-in time for long-term investments.”
From GDP to GEP
As China grows into a transition phase, it’s no longer sufficient to measure societal development by Gross Domestic Product (GDP) only.
“It is high time to develop new evaluation metrics beyond GDP to measure Nature’s contribution to human well-being,” says Ouyang Zhiyun, Former Director General of the Research Center for Eco-Environmental Sciences at the Chinese Academy of Sciences. “It’s important to ensure informed policy-making and better innovation to save the Earth and transit toward sustainable future."
“China has planned more than 30% terrestrial areas for ecological conversation redline to protect biodiversity and vital ecosystem service provision. To ensure these protective measures, ecological compensation mechanisms must be improved, new marketing and financial mechanisms must be established to transfer ecosystem value into economic benefits that benefit local residents.”
“Gross Ecosystem Product (GEP) can provide decision-makers with clear and compelling evidence of the monetary value of ecosystem services. It can also be used as an indicator for evaluating government policy and officials’ performance, as well as assessing land use planning,” he explains.
Guiding changes in food consumption
As China’s economic development undergoes nature-positive transition, the mindset about food consumption is changing as well.
“More sustainable and healthy diets could limit obesity, disease and environmental impact”, says Shenggen Fan, Chair Professor and Dean of the Academy of Global Food Economics and Policy (AGFEP), China Agricultural University (CAU).
“Consumption, in particular dietary habits, is closely intertwined with health and the environment. One study found that over half of all Chinese adults are overweight and obese, and of those slightly more than 16% are obese.
“Consumption of refined cereals, oils, red meat, and highly processed foods has been excessive, while that of whole grains, fruits, vegetables, and seafood has been insufficient,” he explains.
“Sustainable and healthy diets can not only reduce obesity, but also limit chronic disease and cognitive disorders, while reducing greenhouse gases and other harmful emissions and the excessive use of water and land.
“China also has significant market potential for future foods including alternative proteins; the soy products in traditional Chinese diets are referred to as ‘plant meat’, an essential source of protein.”
Social reproduction as a future trend
People in China are not only rethinking how to eat, “many people are rethinking what drives them and what they should prioritize”, observes Biao Xiang, Director of Max Planck Institute for Social Anthropology and author of Self as a Method: Thinking Through China and the World.
“China’s future will increasingly be shaped by ‘social reproduction’. Unlike material production, social reproduction concerns the ways in which people reproduce, maintain, and enhance human life – through interaction, procreation, education, care, entertainment and recreation,” he says.
“We are currently witnessing a shift in terms of what drives the Chinese society. Are long hours of work really worth the effort? Is it wise to maximize one’s savings to buy property in top-tier cities? Should one continue investing in their children’s education unconditionally?
“Human drive – the commitment that pushes us to pursue certain goals – is arguably our most important economic resource. Any shifts in this drive when it comes to social reproduction will therefore have profound impacts on Chinese society.”
Understanding the China context
In the midst of multi-layered transformations, “China readiness for global leaders is an imperative,” Mark J. Greeven remarks. He’s a Chinese-speaking Dutch Professor of Innovation and Strategy and Chief Executive of IMD China and also the author of Pioneers, Hidden Champions, Changemakers, and Underdogs.
According to Greeven, it is critical to deepen understanding of the intricate China context. “Leaders need to explore how to tap into the innovative prowess of Chinese companies. Embracing the wave of innovation from Chinese companies is crucial, as they reinvent technology, products, and management approaches,” he says.
“Cooperation with China on sustainability is essential, given its dominance in cutting-edge energy technology. Multinational corporations must rethink their strategies and risks to navigate the evolving opportunities and challenges in China.
“Lastly, executives must grasp the implications of a young and digitally-native generation that will shape the future of China.”
China at a transforming stage in history
The country is standing at a critical juncture of economic, societal and environmental shifts.
We are also greatly looking forward to more lively discussions on China in the global context, one of the thematic pillars of Annual Meeting of the New Champions in Tianjin from June 27-29.
In addition to the public programme, the member-only virtual programme will give Premium and Pro Digital Members exclusive access to a selection of the sessions from the Annual Meeting of the New Champions.