Challenges To China's Sustainable Growth
There is remarkable growth of economic and financial sectors of China in the last two decades. There is no other country that saw such a remarkable performance of growth and stability of the economy. Growth of Chinese economy provides fodder for study for various academicians to understand viable cause of sustainable growth and stupendous development. Growth story of China relinquishes few interesting myths about unifying local interests with inter-regional aspirations to a single level of accomplished mission. By replacing age –old farming practices with new technological brilliances create provisional room for massive investment throughout world-class infrastructures.
Foreign direct investment (FDI) reaches straight to the masses and generates much-needed interests within local populations. This creates funds within pockets of regional masses. This directly provides mass integration of markets within indigenous communities. China’s policy-makers implements proactive policies in order to prepare generations of different challenges arising out of competitive markets. Most prominent among all these are desperate efforts to abolish the urban-rural divide and harness and encourage innovation through visible structural reforms.
Challenges to Chinese economy from large industrial deficits:
Successful economies of the world strive for excellence in creating enormous industry structures that confounded mass mobilization and adequate conveniences for multinational companies (MNCs). They ignore development of medium-sized industries. These industries are the backbone of any nation. They stay and contribute to growth of consistent economy even during the worst times of deep economic crisis. Most of second-generation of Chinese development concentrate on these industries which would work in creating virtual dashboard of larger industries during excessive economic competitiveness.
Second generation of development stands on the dashboard of high savings, availability of skilled labor and zeal for constant urbanization. Peaceful society combined with modern, harmonious and creative enclaves of the population would provide sufficient medicine for inclusive growth within Chinese society. There are a significant number of negative challenges which are acting as a stumbling block for further development of Chinese society. There are complete social and environmental imbalances among different regions coupled with many challenges posing out from large environmental deficits.
Complete rethinking the role of state and private organizations to provide non-stop development:
There are some organizations that are still critical and suspicious about real level of fiscal sustainability of the Chinese economy. It needs to strengthen the concept of growth and needs to move towards new developmental strategies. At any point of imagination, economic performance of China is by far most impressive in the last 20 years. Constant 10 percentages attendances of gross domestic product (GDP) enable removing mass-scale poverty among a larger segment of Chinese populations. Some thinkers do not believe that such an enormous large-scale development index and remove poverty is a reality. Still, there are many positives which more and more big states are willing to learn from successful economic emergence of China in the global arena.
Growth of the economy comes from enormous development of manufacturing industries. It provides service opportunities to many and brings back to limelight the productive part of the economy. Reform within public enterprises in Chinese administrative circle is long pending. Recalibration of shared resources such as minerals and coals through marked segmentation of distributed ownership could provide maximum interest for most investors in large market areas. This provides lesser barriers to entry and exit for the private sector and promotes enormous competitiveness in dealing with market prices. Commercialization of the banking sector and permit management of interest rates through market segment can perform proper internalization of Chinese markets. Overall rethinking of labor-wage policies and introduction of pension, health and unemployment insurances brings back real development straight to the masses.
Farmer’s rights and interests are important parameters for sustainable economic progress. Further reduction of income opportunities for local government with land-related rights augments opportunities for bondage-free development processes. Most times, during land acquisitions, local government tends to build pressure groups in order to stop developmental measures. Most times, these measures take an ugly turn and produce enormous mass-movement within angry locals. Completely removing powers of the provincial government from land issues will lead to rapid industrialization and building of trust among locals.
All these can be offset through the process of giving much-needed direct benefits to farmers and locals who mostly depend upon lands and nearby jungles for their daily livelihoods. Secondly, there is urgent is to develop enormous research and development industries (R&D) to further facilitate the growth processes. It is pertinent and practical to understand that not the sheer quantities of R&D that matters the most, but the quality of such organization can produce additional stimulation of the growth process within specified boundaries of economic growth and development.
Moving towards the stage of green economy:
In order to increase technological and developmental capacities of individuals, direct link among different colleges and industries relates to the need of the hour. These learning institutions make learned network without any restrictions and foster high-quality talent through much-needed knowledge networks. In a world of stiff competition where margin of profit lies in minuscule segmentation, a better incentive opportunity coupled with a new generation of investments from resource-efficient industries within the range of low-pollutant environments can spur additional investments. These policies can only succeed in an environment, existence of large capital, huge population and a dynamic private sector. The Chinese economy has all these three possibilities to withstand complete and massive change from a stable economy to a modern and advance economy. The next frontier for development of an economy is moving towards the state of the green economy.
Customer relationship management:
Through mass realization of norms of social security, this can reverse rising inequality among different segmentation of the population. There are many areas within the enormous spectrum of the rural population were relatively high social and economic inequalities are the most worrying trends of a developing economy. There should not be any shortcut approach to reverse these trends. Proper and stable availability of adequate public services to the poorest of the poor at affordable pricing, presentation of educational opportunities to every childhood and providing privilege to live a natural life to children as some of few significant contributions to eradicate different classes within societies. Mobilizing additional fiscal resources in generating enormous medical and health facilities and keeping cost of health care at the lowest possible margins can, provide a massive increase of customer relationship management (CRM) to a completely new destination.
There are many business strategies which governments can follow but without a proper and adequate fiscal reform meant for alluring investors as well as welfare of masses, successful transition of an economy from one state to the other is not feasible. One must see all these in terms of classes of international relationships. As one change in the big economy lead to several other changes which correspond differential preferences as well as most possibly interdependence towards the world economy at large. Once a country having extensive economy just like China has, then most of other developing economies looks to them as virtual leaders in world economy. Advocates of free economy always fail to see China as a leader in multilateral trade negotiations at various seating of World trade organization (WTO). Still to date much of Chinese financial sectors is not integrated fully with global financial sectors. This means in order to stay at the top one needs to understand that opening of own financial sectors to world arena is the first and foremost step which big economies will have to comprehend with.
After all these integration of financial institutions, stability of the world economy becomes a true dream. Then, after that big economies must shape and configure for greater passive roles in augmenting economic disparities among poverty stricken states, setting and shaping of global governance agenda, and directing the future course of action of financial status of the world. All these relates with short, medium and long term valuations of policies and proper implementation and guidance of these policies and successful implementation at local, national and regional level will guarantee an economy as big as China to remain at the top for a considerable time.
A complete overhaul of command economy to market oriented populist economy:
Policy holders of China must envisage the fact that most times, all these financial inclusions lead to movement of strong policy convergence. One has to take strong decisions, considering long term perspective by amending adequate safeguarding procedures for complete security from future risks. Many critics believe there are many unique factors behind economic successes of Chinese fiscal state. It is unique and general form of financial decision making that does not hold any ground with this economy. Within the span of the last thirty years, growth of the Chinese economy is phenomenal. From the rural and agricultural economy, it becomes urban and industrial economy. Rapid and mass urbanization, all over takes a huge chunk of grey areas of the Chinese economy to a considerable extent.
A complete overhaul of the command economy to market oriented populist economic lead to complete partnerships of win-win situations for industries as well as Chinese people in general. Within these years, poverty rate reduces drastically from 65 percentages to 10 percentages. It is a miracle ride of success story of economic and such a vertical shift of the economy is never ever imagined and calculated by economic and financial experts worldwide. China is a big country with many states. Though the real growth rate of China is uniform all across every state but it is significant and very much noticeable and this makes the entire spectrum of economic march forward. All these developments are not cosmetic.
When one observes the growth of Chinese economy, the establishment of financial institutions such as, world’s leading top ten banks is now Chinese banks. 32 provinces of China are regarded as the independent economies and their decision-making process is now entirely dependent on the wise administrators of these states. More than 60 Chinese companies are now in global fortune 500 lists. All these growth, goes on to show how a low level economy can sustain and grow towards the top level with considerable investments and winning the hearts of investors through initiation of complete business environments. China is home to world’s second largest highway network and the speed in which it is constructing highways and other roads. Soon it will become number one in road infrastructure. Economy emerges when infrastructure grows and due to extreme growth of infrastructure business grows.
A strong and vibrant economy runs in the platform of strength and that strength comes from different research methodologies from education, science, economics and health. Proper initiation of agricultural reform that deals with adding individuals to whole set up gives proper and exhaustive guidance of creating a vibrant economy. 30 years ago, at the beginning of an economic boom, every household of China is fixed with agricultural production and that production level is guided through extensive research and considerable help from different levels of administration. At the first stage, local governments are encouraged to adopt strong innovative measures at ground level. This leads to completely stronger economic organizations at micro levels of administrations.
Supreme economic measures when China was going through rough patch of economic slowdown:
Slowly, development of the economy becomes a national priority and citizens in general consider this as a national movement and begin to provide real help to boost the economy. China was going into turbulence and it wants rapid economic and social change. Throughout these last three decades growth rate is more than ten percentages consistently are not mean achievements considering the prospect of transitional unemployment, occasional hiccups in economic and natural calamities. Due to proper consideration of traditional and modern monetary policies all along the consumer price index, all over these three decades, remain as low as possible without affecting common masses the brunt of price rise and inflation.
This results in the rise of people’s support for this economic reform. People feel that these changes are not affecting them financially and also they feel they are not left out in the process of economic progress. In the second phase of economic development, China builds strong provincial governments at various local levels of administrations. It empowers them with strong powers to take prudent fiscal decisions to attract investors and big industrial houses all along. Provincial governments are also busy in developing strong research and development teams in order to create robust and continuance research mechanisms to stay always at the top of all business competitiveness.
Decentralization policies begin from the year 1994, which provides a path for provincial governments to take individual decisions without proper consent of the central administration. It empowers decision making process at the ground level and provides exclusive access to stronger decentralization in different policies and administrative decision making processes. Due to vast size of China, it empowers local government to suit their form of economic decision-making process and most of time encourage organizations to take proper and courageous policy decisions. Most of times due to a quick decision-making process success of these decisions become inevitable and slowly one province corresponds with the other in making entire region self –sufficient and stronger. Successful officials get rewarded for creating significant jobs, attracting foreign direct investment (FDI) and developing proper social security plans for organization.
Prominent obstacle for complete development of the fiscal situation of states depends solely on removing regional and provincial barriers existed within specified limits of the provincial government. Most times, disparities in tax structures of these regions contribute severe chaos in financial policy centers. Policy decisions of government are to remove completely provincial state policies and create unison state policies for investors. In this way, most of the firms and industries of the state perform under scale economy which provides deeper integration of disbursement of commodities that assume the product life cycle of products. Slowly, the entire product development, united into an integrated unit, which expands its scope through steady integration into international markets.
Deeper concentration within regional units and provide wider scope of development towards coastal areas of China, brings forward rich dividends in terms of constant monetary acceleration. During economic setbacks, China fights it out with considerable extent from its provincial development index to recover from urgent fall of economic indexes. During last 30 years, barring two years, most of the times, economic growth of China touched over 10 percentages. These trends, surprises many economic experts and must have in the first instances have never ever able to understand these trends and many have doubted these trends but slowly they realize the base of development in which China is standing with.
Structural financial stability with systematic incisiveness provides constant growth of Chinese economy:
China’s continual accelerated growth makes headway for safeguarding external financial instabilities. What about coming 20 years and how China will evolve as an economy in ever changing world economic-environment. Structural financial stability is already in place, and in addition to this more and more systematic incisiveness of bold policy decisions make an entire financial institution a viable option. Different financial factors of nations learn from miracle growth story of Chinese financial structures may replicate these ideas in their home in order to compete and outgrown from the Chinese economy. Boundary disputes with India and Japan, the two biggest neighbors with a strong economic presence are still not solved. Most times, these countries accuse China, of creating its ambitions of expansionism and growth and that creates much anticipated hostilities among different nations.
Japan has already a strong nationalist government with maximum majority can take bolder decisions and could oppose China in terms of financial as well as territorial limits. Boundary disputes with India are long standing and this becomes a major hurdle in creating good relationships with big neighbors. Recently, general election of India saw the growth of a nationalist party with highest most to be empowered for a complete and strong government at the center after 30 years. In the last decade in India, government of that day is constantly being accused of making a state of policy paralysis. Now, with new and powerful government, in India, advent of bold decision making coupled with the powers of ‘make in India’ campaigns which provides much needed route for establishment of India as a marketing and manufacturing hub surely will give China a stricter fight for economic inter-dependence.
China must look to near policy to India:
Higher middle income groups in India provide suitable opportunities for China and other world economies to send and sell huge quality goods to people across all of India. India’s middle classes are earning more and like to spend more on luxury and electronic goods. Widespread perception of Chinese goods in India is always of cheaper and bad quality products. Most times, in the past, instead of seriously taking India, as a strong marketing segment, China used to dump low quality products to Indian markets. China must look to near policy and start the serious business engagement with India so that benefits incurring from such strong economies, would boost its own economies in multiple ways.
This proves that slow, foreign economic and financial decision-making processes always coincide with external affairs. Similarly, general perception in India to China, using Pakistan as a tool to fight indirectly with the Indian establishment. It is perceived within knowledgeable minds of India that Pakistan is the proxy and the real war we are fighting is with China. These might have little truth associated with it but still these notions need to be corrected from China before going for full scale partnerships in commercialization and business opportunities with India.
The next move of China in terms of business and financial opportunities relates with its strong and powerful neighbors such as India and Japan and create one of inter-provincial relationships with them in order to provide and find the best possible non-stop financial service so that prudential relationships among different units makes entire financial state succeed without any symptoms of negativity. It is expected that middle-income-emerging markets such as China and India will continue to be better than developing economies. Developing economies are now reaching a state of inertia from where we can find a state staleness. Whereas, middle-income-emerging markets will continue in their search for research and development and provide the vacant space for advancing economies to adjust their domain as the second phase of industrialization.
So much influence of China is going to be nearer to 2030 into the world economy that. It will provide similar effects of the emergence of past economic powers such as the United Kingdom (UK) in 1870 and the United States (US) in 1945. China is currently the biggest emitter of carbon dioxide gas emission in the world. It increases demands from consumers which need more and more industries to be built to satisfy high customer demand. Large and continuing usages of natural resources probably reduce natural reserves considerably. This inflicts adverse reactions on green house gas effect. Consumers will have greater capacity to expend more and this increases inflation. Reduced natural resources and greater consumer demand highlight the need for greater use of ‘green growth’. Green growth saves the environment and creates alternative methodologies to create and evolve, new technologies to save nature.
Process of globalization is unstoppable. It is not myth but a reality. While professionalism can save the economy in times of dire crisis and depression, but the advent of internationalizing of the domestic market is a clear truth. Rigid rules and regulations are meant for temporary reprisals but most times, these create real obstructionism and provide a sense of negativism among different strata of economic barriers. Next point of acceleration of the economy depends upon productivity growth of services and better logistics management. In the beginning, China completely depended upon creating its state as a manufacturing hub of most of the most valued products and thus succeeding in creation of better revenue management and upscale in job creation. Many multinational companies (MNCs) thronged into China and built their own industries due to favorable working regulations and speed environmental clearances.
In China, most of the houses stayed by their citizens are owned by States. Most of farm lands cultivated by farmers are owned by the state. When project clearances are sought from state, ultimately, it is the rule that manages to get these lands for concerned companies. This creates positive growth for many MNCs which results direct impact of economic growth. After few years of super positive growth, China sees two years of depression and slump and economic experts analyses possible reasons for such slump and find that the next generation of economic improvement is to create in house research and development facility (R & D) and establishment of large network of infrastructures to reduce latent time for logistic management. Speedier logistic management led to retaining comparative advantage and pacify pull of products into different market segments.
Functional trade and non-functional trade:
A better logistics are a boon for industries in times of economic growth. Trade in services is now becoming the fastest growing elements of international trade. Previously considered non functional and non trade services are now fast becoming global and international trade. Due to overdrive with high bandwidth of the internet. It enables the entire route of services a completely new environment where it is now possible to provide traditional services such as education and health at the world level. Most of developed economies are continuing their strive for constant growth by relocating manufacturing and service industries all over the world in order to reduce logistics and latent time in reaching to finished goods for consumers. For example, when a web master creates a website, it's a finished product and he aims to distribute his knowledge to rest of the world and also expects every time visitors reach to his site, then it should be always be available.
If server of website stays in the United States, then, accessing such website from India takes a few seconds longer than people of state accessing contents from states. What are the solutions to this? A single website cannot be simultaneously hosted at two different locations. Content delivery networks (CDN) are third party hosting services with distributed hosting services across all continents. CDN companies locate some of the most visited locations at different continents and continue to run different hosts at these locations all over world. When, webmaster purchases subscription of CDN and connects website with CDN, then website would be distributed through these content deliveries network and in this way users from different locations across the world able to access web from nearby web hosts of these CDN, instead of contacting all the time to central server location of US. Content delivery network gives better logistic management for website. Website runs in information gateways to internet. Different computers with internet connectivity through web browsers reach to website. If those website are nearer to locations of users then website loads quickly.
Here, website can be compared with a single industry and hosting is similar to logistics management. High speed development of infrastructure relates to distribution of content delivery networks of websites. With the advent of cut-throat competitions and deeper economic integration among different regions of the world, it would always be important to consider in creating better infrastructure facilities all across the nation to create safer facilities for investors. In the second generation of reforms in the early nineties of the previous century China opted for, rapid infrastructure development and connects different units into a single manufacturing hub.
Its research and development (R&D) team creates fastest bullet train in the world and connects its north and south and east and west and reduce considerable travel time. Bullet trains considerably reduce heavy burden on airport networks and people easily move from one location to the other with the fastest time removing completely lagging time for logistics. This benefits the economy effectively and creates additional opportunities for travel, health and education segments. Creation of super highway all across China creates additional opportunities for transport from one location to the other easily without any additional delay. China introduces Goods and service tax (GST) all across its regions to reduce double taxation and harassment of corporate in clearance of projects.
China could see India as a potential growth partner in its quest to reach number one in business environment:
Stricter implementation of federal law all over China and harsher punishment for corrupt officials sees glaring examples of the advent of clean administration which indicates positive direction to private industries coming from different regions of the earth. Global mega trends in the economy are open for all developing countries with strong economies such as China and India. It is the wish of investors to reach out to such countries by looking at favorable business opportunities allowed in these countries. Of late, India under the new government is trying day in and out to create a favorable business conditions. Main difficulty of China in the future could be growing influence of India and it needs to be tackled with a friendly manner instead of coercion. This many developing economies are looking back at India as a potential growth partner.
In this world of cut-throat competition and still economic balances, only new business territories will compass extreme growth for such economies to reach number one position. After election of popular government in India a series of successful steps were introduced within the shortest possible of time and from within these periods many obsolete laws have been changed to revive confidence of investors which are in losing trends in the last decades. In coming ten years, it is inevitable that number one position in the economy of the world is a complete competition between China, US and Japan. All these economies reached the stage of maturity and they are in search of such economic fields such as India where they can produce and grow such amassing economic strength in order to advance their surge of the economy from amongst different competitive elements.
China needs to improve quality of products to create long-term business environment:
Main challenges for Chinese multinational companies are to fight it out with other companies from the United States (US) and Japan. US companies are giving stiff ride in terms of technology driven manufacturing products with China. Due to inevitable growth of information network all over India, most people opt for smart phones for information sharing and connecting to different locations. General Chinese companies hold the tag for cheaper products. In the past, through north east route of India, pull of Chinese cheaper products used to be dumped into India and people used it due to less pricing and all these products seemed to be not guaranteed and origination of companies are not been traced. China can expand to poorer countries such as Pakistan and Bangladesh by dumping of cheaper electronic products and other ancillary products but it cannot do the same with India where there is large number of middle class people with high spending capacity.
Confidence building measures between India and China:
Of late, China is continuing to rectify its past mistakes with India through initiation of much consolidation of stronger means through various confidence building measures (CBM) such as pushing real branded Chinese products, creating after sales services all over India, accepting ‘make in India’ by announcing to create manufacturing units throughout different nodal locations have allowed some of renowned Chinese brands to capture most of market segment. China is currently going on the third phase of economic reform which aims to push business interests in big economies like India. It is one such reason for continual potential for large technology catches up.
Innovative marketing and excellent product merchandising is the norm for greater control and proper management of all these financial planning to succeed. Major business houses from abroad look at India’s potential rise of an information network as single faster way to transact and create different forms of logistic management to adhere to established marketing demands. In addition to these favorable policies of the current government is also attracting such vendor to enter and distribute good products and establish serious competitiveness among different consumer’s expectations.
Most of these electronic commerce (e commerce) companies are from India and they sell the business to business (B2B) goods of major Chinese companies to India with the price tag more practical and suitable to Indian customers. Most branded products in smart phone and technological devices are pricing higher than most of the known brand of China. It attracts Indian people as well as they realize that all these products are sold through an electronic commerce marketing segment and this inspires confidence about branded Chinese products. Mostly, India is still constructing major infrastructure facilities all over India. China is the first country to realise potential of greater information technology (IT) infrastructure all over India. With latest launch of a new satellite, there is every possibility of introduction of large scale high speed broad band technology all across India.
Recently, due to complete abolition of third party mediums in business segment of electronic retail marketing, most of middle classes of smaller cities where they do not have complete access to big shopping malls tend to reach towards these areas in order to find complete solace of buying latest brand with cut-throat pricing due to advent of direct marketing. Most of branded products in different countries such as China, America are being sold here with the complete intention of straight business talk between electronic commerce company and industry which presents complete differential pricing from existing standalone retail pricings. It is the new trends of the global market where virtual route such as the internet has completely overtaken manual route of big shopping malls.
Most of branded companies of China are entering into India through these mediums and slowly building newer brand awareness and erasing past misconceptions about cheaper Chinese branded products from the memory banks of Indian customers:
In this electronic commerce, the prime factor is to win back customer’s confidence through the introduction of various measures such as introduction of cash on delivery (COD). Free shipping and other benefits. Provisions of COD measures improve confidence among end consumers. Competitive pricing by direct contract between electronic commerce companies and various brands of different developed countries has made exclusive pricing presentation to some of the bigger brands. Most of Chinese companies have come in contact with Indian companies for logistic management and that reduces flaws in logistics. Most of these companies take responsibilities of these logistics and create exclusive logistics contact with different private couriers.
All these measures go on to show, even in an area of extreme lack of infrastructure facilities there are absolute possibilities of spreading of information network and that creates a path of internet and information on electronic companies to go for a complete overhaul and create new business models. The brilliant ways through which various independent Chinese entrepreneurs put the difficult dynamics of business solutions send a strong message to traditional business communities where most of them have to grind their business through local business lines. Most of these businesses strive for successes through local logistics management and other forms of coordination and correlation within different business communities.
Some Chinese brands sell their products through electronic commerce and streamline the number of cells in order to attend a specified number of business advantages augmented from time to time. In the era of complete business downturn, most of the imports of Chinese industries want remains as it is but the exports become stagnant and this affects growth of economy. Where there is a will be there is a way and growth of Chinese business show cases all these aspects by providing the most innovative solutions. Think about a phone ten times cheaper than Apple phone but in term of durability and usages it is almost at the same rate and rankings of Apple phone.
With Google providing its Android version free for developers, most of Chinese technological brilliance communities opted to make it the most by creating one or more significantly wonderful and developed Android version which is almost the same as that of Apple. It is mostly called as poor man’s Apple phone but it provides identical software environment from that of Apple. Slowly, some Chinese manufacturers have taken the place void by Apple due to high cost of Apple phones and most users from Asia unable to buy it up front. Slowly, these Chinese companies have spread far and wide in different parts of Asia, including India through their better customer service and brilliant cost for money send offs to individuals.
What is Chinese growth model?
In the earlier phases of the Chinese economy where it is mostly dependent upon the concept of export-driven economy where most of these off shore industries of western economies built their warehouses and original equipment manufacturer devices at different part of China. Mostly, due to cheaper labor costs and almost zero redtapism, which makes foreign companies to create better managed situation for creating cheaper manufacturing devices? This helps China economy to grow stronger and becomes better with each passing year it touches the growth scale of ten or above without any such hurdle. Slowly, many other nations learnt from this economic model and provide identical amenities to multinational companies and this makes Chinese economies comparatively slower at the first instance.
Policy makers of China look native this time to understand the potential of large middle classes in the house and try to provide them better amenities through different modern advance technologies. Continuous growth gives potential rise of economy, accumulates a large sum of money within the hinterlands and augments purchasing capacities of individuals. All of these sums of to make it the most and provides additional surplus money for individuals to spend for buying commodities. After sustained growth through export-driven growth index, slowly, Chinese economy moves towards the phenomena of domestically driven economy.
It ushers well for China as they have seen a complete change of life style in earlier decades and now they are pushing all these aspects of making a better and what is understandable a sustained form of living where every individual love to live a modern life. Foreign brands try hard to take the pound of benefits of rising economy of China, but in the mean time with the advent of Chinese indigenous brands, which makes life difficult for most of foreign brands in terms of its pricing and other marketing facilities have created a stipulated marketing drive for most of Chinese brands.
In this era free markets, where no business entities can be suppressed through implementation of national rules, the domestic companies have a complete competitive environment where they face extreme technological and marketing competitiveness for further marketing advancements. In the era of cut-throat competition and aggressive marketing, the sheer differentiation among different industries comes from competitive pricing and better product offerings.
Existence of poverty is major concern for growing economy like China:
In order to attain competitive pricing and better product offerings, Chinese manufacturers sought for in-house development of technological brilliance and find a suitable way to present different viable grounds for different multinational companies (MNCs). A stronger domestic market, Chinese economy presents viable options for foreign direct investment (FDI) of atypical leading brands all over the world. Chinese domestic market provides a viable option for leading industries to enter into its domestic market to provide positive market outlook and manageable domestic platforms to strengthen and augment the global economy. It presents strategic competitive opportunities for different marketing companies to try out their global presence through distinct global competitive agencies.
All these are not rosy days for business enterprises as there are many underdeveloped parts of China where skills of labors are still on lower basis, and most of times, these provides, a difficult terrains of environment where many industries are still facing indifferent unknown challenges which keeps coming at them at certain point of times. Labor costs of China are on the cheaper side but what it matters the most is the skills of such labors. Without better skills; the value of labors goes down considerably and this is the major concern for large labor intensive market of China. Within a few years, there has been considerable importance to developing indigenous growth mechanisms which not only provide a fillip for better ideas and also able to create individual and indigenous labor markets with better skill presentation.
Despite these obstacles the current and the long-term development potential of China is immense with a larger scale implementation of development measures arising out of many welfare measures taken over by China. Economic growth of China is not fully dependent upon foreign direct investment (FDI). Due to better strategic planning of allowing FDIs in manufacturing and development segments where it keeps rising better and more employment sources it continues to provide different levels of sustenance of growth through unique drivers of growth. In 2009, China touched 11% of economic growth and with 5% coming from inland consumption, 4% investments and 2% from exports. This sums up the summary of a steady growth of China which is constantly being backed by continuous domestic consumption. In comparison, though India has favorable domestic markets but in the last decade it saw policy paralyses and a completely unfavorable environment for domestic industries.
Summary of a steady growth of China which is constantly being backed by continuous domestic consumption:
In initial years, many thinks all these are sheer metaphors and cannot be achieved at the first instance, but slowly it fades out and the reality of Chinese economic growth comes to the forefront with strongest possible growth attendance for consecutive years achieved by not a single nation all over world, except China. In the recent years, there has been decline of exports from China, but this does not affect its economy to any marginal extents. Recently, it has seen growth of imports for export processing in order to make up loss of direct exports. Export processing is importing raw materials from outside and adding a small amount of value and then exports it.
It becomes hugely popular and cost-effective solutions for most of inflation-driven plants which desperately need well-prepared raw materials to serve for their plant’s need. It also a kind of dilution from offshore preparations of manufacturing industries which of late have always been in the limelight due to various political compulsions of western governments. Owing to considerable, inflation and all of benefits at different portions of business practices, most of indigenous plants of west and US concentrate more on getting in-house benefits from their citizens. It reduces dependence on foreign soil and also it provides greater transparency and utter opportunities for them to work for the betterment of the natives and in turn it drastically decreases mass benefits but on the contrary it also decreases mass benefits of such plants.
China’s evolution from planned market to market economy:
Now, after successfully, depending on turn of inflation, now they are trying hard to find new destination but most of other foreign lands have been covered by their indigenous productivity or other forms of low cost export processes which significantly taken over by Chinese business firms. That is why even during these times of inflation these companies are still at its best to utilize available resources for their optimum benefits. Similarly, is true of manufacturing industries, which strive upon, welding products which can provide additional benefits.
China is the largest welding producer of the world and it is also seen the largest number of infrastructure development throughout. So, it is opportunities for most of such extraneous infrastructure companies to work within the perimeter of China and utilize in-house export processing to acquire raw materials easily and then at lower cost implements such materials in infrastructure practices. In this approach, most of infrastructure development of China come at low cost and with renowned infrastructure companies in the world. All these measures signify China’s evolution from a planned market to a market economy.
What all these measures signify the emergence and practical implementation of limited management practices in promoting and building a greater economy. Slowly, private sectors are encouraged to engage themselves in government-controlled markets. It brings efficiency, benefits and encourages a more equitable society by sharing equal distribution of benefits from within different segments of the Chinese population. In this way, entire economic outlook of China moves beyond middle income trap, through introduction of medium-term fiscal outlook anchored by a steady rise in domestic consumer demand.
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