Telling the truth about SME life today

Is China still an economic superpower?

When we were debating the question at Real Business HQ, we came across a brilliant article by two business brains at Swiss business school IMD: Suzanne Rosselet, deputy director of IMD’s world competitiveness centre; and Winter Nie, professor of operations and service management.

The two women were pitted against each other to debate the question: “Has China reached its glass ceiling in terms of competitiveness?”

Both delivered compelling arguments. We’ve dissected the main nuggets for you here:

YES… China has reached its peak (Suzanne Rosselet):

  1. China ranks 18th (out of 58 countries) for the implementation of government decisions but only 39th for the transparency of its policies. Decisive yes, but transparent, not yet.
  2. Foreign managers are grumbling about rising discrimination and a tougher domestic market. In terms of the freedom that foreign investors have to acquire control in domestic companies, China ranks 56th.
  3. Now that Chinese companies have acquired greater access to foreign technologies, management and technical skills, their foreign partners are no longer so invaluable.
  4. State ownership of enterprises and the advantages accrued by this status (preferential loans, hidden subsidies, etc) distort the competitive arena.
  5. Large Chinese corporations are seen as inefficient by international standards (55th).
  6. New labour laws, stricter environmental regulations and a rising cost of doing business have made foreign companies more wary.
  7. There’s a skills gap. Companies complain about the shortage of competent managers and lack of international experience (ranking last in 58th place).
  8. China still ranks very low for: health and environment (54th), education (46th), energy efficiency (55th) and pollution problems (58th).

NO… China is continuing its rise up the competitiveness ladder (Winter Nie):

  1. More than 400 million people have been lifted out of poverty in China in the past 30 years. China’s rising middle class (50 million and counting) is causing a revolution in consumerism.
  2. China has enjoyed a ten per cent annual growth for the past 30 years.
  3. A recent worldwide examination of 15-year-olds in reading, maths and science puts high-school students from Shanghai far ahead of their competitors.
  4. The US graduates 40,000 engineers a year; China graduates 280,000 per year.
  5. In 2007, China overtook Germany in new patent applications.
  6. Inadequate transportation is a thing of the past. Today, China has more than 7,000km of high-speed railway lines and expects to double its network in the next three years.
  7. The country is tech savvy: the latest Chinese super computer is 40 per cent faster than anything in the US.
  8. Entrepreneurial flair: China has more than ten million SMEs – and that number is growing fast.

Read the full debate.

Who do you agree with” Post your comments below and share your views.



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