CKGSB Knowledge - China Business and Economy

Even for a country whose business environment is always so dynamic, the current period is notably vibrant. The Chinese government has declared the new fundamental goal underlying its policies is the attainment of common prosperity, a more even redistribution of wealth across the nation’s population, and this is driving changes in many sectors. Some observers have suggested the policy could inhibit a continuation of the unprecedented growth China has experienced over the past few decades, but others argue, and with merit, that this change is merely a shift from one growth model to another. China’s growth has long been predicated on the idea of “letting some people get rich first”—a notable quote from former leader Deng Xiaoping—but such wealth-led growth was inevitably going to plateau, to some extent leaving behind, in…

Xiang Bing is Professor of China Business and Globalization and the founding Dean of the Cheung Kong Graduate School of Business (CKGSB). All commentaries reflect the personal opinion of the author and are not necessarily the official position of the school and the magazine Since 1979, the market economy and global free competition has created unprecedented economic development and wealth creation. However, this has also led to a massively uneven distribution of income and wealth, and a decline in social mobility, alongside a number of other issues. Regarding the uneven distribution of income, the UN Development Program’s Human Development Report 2019, revealed that in 1980, the average pre-tax income of the top 10% of US citizens was 11 times greater than that of the bottom 40%. By 2017, this gap had become…

Over the past year, several big private companies that play a crucial role in the Chinese economy have been brought to heel by the government in ways that can superficially seem counterintuitive. But for China, growth and development are being de-linked from the wealthy getting wealthier. A massive share listing by Alibaba’s Ant Financial was suddenly canceled in November 2020, and an IPO by China’s biggest ride-hailing company Didi Global in New York turned ugly when the Chinese government announced investigations which slammed the company’s share price. These and other moves were widely viewed as being aimed at pulling back the entrepreneurial and wealthy side of Chinese society, but the opposite is the case—there is a rebalancing of China’s economy in progress to create broader-based prosperity that could keep the growth…

Vaclav Smil, a prominent Czech-Canadian scientist and policy analyst, and author of the book Growth, is credited with having established the idea that modern economies must move away from prioritizing growth while looking to level economic wealth across society. A recent talk from Chinese Premier Li Keqiang that emphasizes the country’s need for steady and stable growth, alongside the ambitious environmental targets that the country has put in place, imply a recognition, by China, of the finite nature of economic and environmental resources. But whether China’s actions and progress align with their spoken promises, and are indeed aimed at reaching something close to degrowth, remains to be seen. Smil coined the term degrowth refers to an economic situation during which the levels of economic wealth produced by a country neither increase nor…

China, as the world’s leading manufacturer, has also consistently been by far-and-away the world’s biggest polluter over the last few decades. Reacting to the environmental tipping points that are getting ever closer, Beijing has set out distinct carbon emissions goals and the country is increasing spending on solutions such as new energy sources. But the response is far from perfect and there is still a long way to go. In this interview, Judith Shapiro, a renowned China environment policy expert and professor at American University, discusses the feasibility of China achieving its new carbon neutrality goals, its role in meeting global climate targets, and the advantages and disadvantages that the Chinese system offers in tackling these issues. Q. How would you characterize the current state of China’s environment compared to other countries,…

A new sight greets delivery workers when opening the delivery trucks at the Guangzhou Huadu Worldwide Transmission factory in southern China, the country’s largest aftermarket supplier of automatic transmissions. What would previously have been raw materials arriving for production are now old gearboxes in various states of disrepair, ready for remanufacture. The company was one of the first to take part in a national “Trade Old for Remanufactured” scheme, encouraging the shift away from raw materials through a 10% discount for customers who trade in their old equipment for remanufactured items. It is one of the many incremental changes in the shift from a linear to circular economic mindset. As China’s mentality changes, companies like Guangzhou Huadu are reconfiguring their processes to help the “factory of the world” reuse old goods instead…