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):
- 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.
- 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.
- Now that Chinese companies have acquired greater access to foreign technologies, management and technical skills, their foreign partners are no longer so invaluable.
- State ownership of enterprises and the advantages accrued by this status (preferential loans, hidden subsidies, etc) distort the competitive arena.
- Large Chinese corporations are seen as inefficient by international standards (55th).
- New labour laws, stricter environmental regulations and a rising cost of doing business have made foreign companies more wary.
- There’s a skills gap. Companies complain about the shortage of competent managers and lack of international experience (ranking last in 58th place).
- 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):
- 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.
- China has enjoyed a ten per cent annual growth for the past 30 years.
- A recent worldwide examination of 15-year-olds in reading, maths and science puts high-school students from Shanghai far ahead of their competitors.
- The US graduates 40,000 engineers a year; China graduates 280,000 per year.
- In 2007, China overtook Germany in new patent applications.
- 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.
- The country is tech savvy: the latest Chinese super computer is 40 per cent faster than anything in the US.
- 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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