“Despite the recovery in developed economies, growth will continue to be low relative to historic levels. The only way to survive in this economic landscape is to expand the domestic market” said CKGSB Professor Li Wei, during his interview with Chosun Ilbo.
When asked why China should focus on its domestic market even though it’s the world’s leading export market, Professor Li explained that “the era of export-driven economy is over. Cheap labor and rent in China are no longer valid. Instead, 1.3 billion Chinese consumers’ thirst for consumption is why the Chinese government should revise its growth strategy to focus on the domestic market.”
Professor Li stressed that Chinese leaders are becoming increasingly aware that China cannot rely solely on its export market to grow. At the third plenary session in November 2013, the Chinese government decided to prioritize its domestic market expansion.
Lastly, Professor Li forecasted that internet, IT, renewable energy, auto and home appliances would be promising domestic industries going forward. China is currently the biggest auto market, with smaller, developing cities driving this growth.
For Korean companies, Professor Li targeted the food and beauty sectors (those that Korea has been highly reputed for historically) as promising areas of growth. For example, given the large inflow of Chinese customers into the Korea health and plastic surgery business, these respective industries represent attractive businesses to introduce into the Chinese market.