March 19, 2024. Beijing – Despite multiple headwinds including demographic change, weak global demand, and an unpredictable international environment, China can still achieve moderate economic growth and offer opportunity for enterprises if it focuses on pragmatic policymaking, emerging technologies, and structural reforms, according to the views shared today at the CEIBS Innovation Forum Beijing. 

The international forum, hosted by CEIBS with support from the European Union Chamber of Commerce in China, the China-Britain Business Council, and Caixin Insight, aimed to provide a balanced and pragmatic look at the country’s economic outlook for enterprises and investors uncertain about its prospects in the wake of the annual Two Sessions meetings, at which the government set a growth target of around 5%.

In a welcome speech, Professor Bala Ramasamy, Professor of Economics, Associate Dean, and Director of the GEMBA Programme at CEIBS, said that “Despite the headwinds that China faces, there is no reason that smart enterprises cannot adapt and continue finding success here.”

He continued to assert that “Moreover, there is an argument to be made that difficult times such as these, in which direct foreign investment is decreasing, for example, are in fact filled with opportunity, and that now could be an excellent time for businesses and entrepreneurs to make a bet on China,” before acknowledging that “if they are going to do this, they must have a realistic outlook and a full picture of the actual state of China’s economy, beyond the headlines.”

Liu Shijin, Deputy Director of the Economic Affairs Committee of the 13th CPPCC National Committee and Former Deputy Director of the Development Research Center of the State Council, then delivered a keynote speech on the theme Structural Reform and Tapping into New Growth Potential: Deepening Stable Growth and Promoting Transformation. He pointed out that China's economic development and steady growth must be based on exploring two specific new growth potentials: “catch up" potential, i.e. the potential to lessen the gap between itself and developed countries, and digital/green potential spawned by new technology, exemplified by the so-called “New Three”: solar cells, lithium batteries, and electric vehicles.

"China’s new technological development has greater market capacity and longer growth opportunities than mature economies,” Mr. Liu said. “It can reduce costs faster through economies of scale, thereby forming new technological and industrial competitive advantages.” These advantages, Mr. Liu claimed, could support another five to ten years of moderate economic growth.

In addition, Mr. Liu stressed that stabilising economic growth would require loose and active monetary policies, while also turning more attention to structural reforms, including increasing per capita income and distinguishing between “survival” consumption (food, clothing, etc.) and development-oriented consumption (healthcare, education, culture, etc.) to expand domestic demand. Mr. Liu also pointed toward equalisation of basic social services, investment in human capital, housing registration reform, integrating rural and urban development, nurturing China’s entrepreneurial spirit, and adjusting classification of companies from the enterprise level to the investment level as potential avenues for pursuing stable growth in China’s economy.

This was followed by a second keynote speech delivered by Professor Xu Bin, Professor of Economics and Finance at CEIBS and Wu Jinglian Chair of Economics, on the theme “Future Perspectives of China’s Economy”.

Professor Xu asserted, “It's clear that, currently, the Chinese economy is in a slump, and facing mounting difficulties both domestically and internationally,” referencing demographic challenges, global headwinds, and slowing growth.

“However,” Professor Xu continued, “the country still has a good chance of climbing out of this slump and continuing on a moderate to high growth path.” Listing the fundamental strengths of China’s economy, Professor Xu noted efficiency derived from a highly competitive culture, entrepreneurship, and pragmatism. He went on to explain his “Door Crack” theory, stating that “in China’s long imperial history, governments have provided only a door-crack space for private endeavors (...) the constant fight against this "door-crack" policy has resulted in strong entrepreneurial spirit and high ability to adapt.” Professor Xu used the “New Three” as examples of industries currently benefiting under this system.

Professor Xu concluded his speech by explaining that a positive outcome for China’s economy is dependent on the vitality of China’s private sector and the pragmatism of its leaders, noting that the indigenous ingenuity of Chinese companies and the country’s entrepreneurial population presented reasons for enterprises to still see opportunity in the country. 

This keynote speech was followed by a panel discussion, hosted by Professor Bala Ramasamy and featuring Mohsen Sabet, COO of VT Industrial Technology and CEIBS GEMBA 2021 alumnus, Zhong Mei, Co-CEO of Kidsland International Holdings Ltd and CEIBS EMBA 2003 alumna, Eric Xie, Executive President of BDR Thermea Group China, Chairman of the European Heating Industry Association China Branch of EUCCC, and CEIBS MBA 972 alumnus, Liu Hengwei, Secretary General of the MNC Forum for Carbon Neutrality (MNC50), and Mandy Zhang, Global CMO of smart Automobile and CEIBS EMBA 2018 alumna. The discussion included open dialogue on topics such as near-term opportunities and challenges for the Chinese economy, geopolitical effects on the business landscape in China, and more.

CEIBS Innovation Forum
The CEIBS Innovation Forum series was launched in 2015 and is committed to promoting the integration of knowledge and practice, while serving the transformation and development of business in China. The series provides insights into current business and economic trends with a focus on topics relevant to urban and regional development. To date, over 50 events have been held in 30 cities around China, where more than 300 speakers have contributed their views.

In 2024, after starting off strong with a first English-language forum in Beijing, the 9th Innovation Forum series will host events in Hong Kong (in English) and Luoyang, Hangzhou, Shijiazhuang, Changsha, Qingdao and Guangzhou (in Chinese).