In late April, I attended a forum “China-U.S. Business Forum: Finance and Innovation” hosted by Guanghua School of Management of Peking University, my alma mater, at the New York Public Library.
The speakers included Jack Rosen, CEO of Rosen Partners; Steven Barnett, Division Chief (China Division, Asia Pacific Department), International Monetary Fund (IMF); Gary Rieschel, Founding Managing Partner, Qiming Venture Partner; Hongbin Cai, Dean of Guanghua School of Management; and other China veterans.
The speakers, both Chinese and American, have been doing business with China or in China for an extensive period of time. For example, Gary Rieschel has moved his family to Shanghai from the U.S. to manage his VC fund Qinming Venture Partner.
The speakers were divided on the prospects for China’s economy and markets. Some of them painted a much more bullish picture than others.
Differences of opinion, needless to say, are typical when a bunch of economists, business people and lawyers sit down to discuss China. Each party may have dramatically different opinions from each other. The reason is that China’s economy or market is not homogeneous, but diversified and full of self-sustained pockets that posses their own ecosystems. Broad-brush conclusions about China often sound ill-informed and naïve. For example, we often hear the comments that Chinese consumers do not consume enough and the China’s government must push a more rapid shift in the country from saving to consumption. However, the Chinese are already large consumers in various areas and the rate of consumption has been growing at a fast pace for years, as evidenced in part by their ranking as the largest purchaser of luxury goods.
Attending the forum validated my belief that while the Chinese economy’s overall rate of growth is slowing, inevitable and arguably healthy, traditional marketplaces are enduring correspondingly painful transitions. Upon a closer look, one sees rapidly growing marketplaces of innovation and entrepreneurship throughout the country. To support the evolution of these new marketplaces, the Chinese government must make more substantial and rapid progress in intellectual property protection and law enforcement and, thereby, ensuring the development of a more trustworthy business environment for both institutions and consumers.
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