China’s Economy: Lots of Room for Further Growth
April 12, 2016

The following is a translation of an interview that Ryuichi Kanayama, Chief Editor of Japan’s Weekly Economist magazine, conducted with Xiang Bing, Founding Dean and Professor of China Business and Globalization at CKGSB.

CKGSB was established in Beijing as the first business school to produce MBA (master of business administration). The school is also well known for teaching Jack Ma, the founder of Alibaba group, China’s biggest E-commerce enterprise. On the occasion of his visit to Japan, I asked Dr. Xiang Bing, the founding dean of the school, about his observations on the present situation, challenges and future prospects of the Chinese economy.

China’s economy seems to be shaky due to end of the country’s demographic dividend, a slowdown in growth, a sharp drop in stock prices, excessive debt and the depreciation of the RMB. What’s your view?

■ Although China is facing various challenges, I am not worried about its long-term prospects. There remains a lot of room for further growth in China. China’s urbanization rate is only about 50% and the tertiary industry accounts for approximately 50% of the total GDP in China. Industries such as petroleum, communications and education are still tightly regulated.

As the urbanization rate increases, the service industry develops to the level of advanced countries and other industries are deregulated, the country’s economy will definitely continue to grow and there will be plenty of opportunity.

Unlike the US which needs new innovations to stimulate economic growth, China can grow even without innovation because of reform dividends such as deregulation. Since its economic reform, China has continued to globalize and is not afraid of globalization. We welcome the accelerated speed of IT and this is China’s strength. Even if the country’s growth rate falls to 6%, the increased amount of GDP is the biggest in the world.

China has not created global brands like Apple and does not have the same soft power that the US has. Do you see this changing?

■ It is a question of time. In the telecommunications industry, there are global enterprises like Huawei, plus other Chinese companies are acquiring global brands, like Dalian Wanda’s takeover of Legendary Entertainment, a major movie producer in the US. The Chinese market is huge. Chinese companies can be the global number one in sales turnover solely by dominating their domestic market, even before they have ventured into overseas markets.

China has achieved significant economic growth, but is it possible for China to contribute in other areas?

■ The rise of the US has created a lot of universal values such as democracy, fairness, constitutional government and other contributions to the world. But China does not need to do the same. There is a Confucian proverb that says, “We should maintain harmony, but not simply follow others.” It is important to respect diversity. I think the universal value that China can create should be something that resolves various problems facing the modern society, including income disparity, global warming and sustainable growth. For that reason, CKGSB encourages students to adopt a global outlook, view long-term prospects over the course of hundreds of years and study the humanities. This is why we have introduced subjects such as history, philosophy and religion into the curricula, a first for global business schools.

Do you have any plans to launch a Japanese-language program?

■ We have now many foreign students and recently established a new Korean-language program. Executives from large enterprises including Samsung and LG Electronics are taking the class. I hope that we will be able to offer programs in Japanese in the near future.

I have close ties with Japan. I visited Japan as a student in 1983 and I was shocked by how advanced society was there. I was studying engineering at that time, and this experience inspired me to start studying management. It is Japan that has changed my life.

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