This blog post is a first! As many of you know, I’m very active with outbound Chinese private equity funds and high-quality Western companies seeking investment.
This post was written by my teammate, KC Yoon, and I found it a useful view that busts some myths I’ve heard far too often about China.
Some quick background- I am a Singaporean and used to be a civil servant; and currently have lived in China for the past 8 years. Singapore like China is also a”Government; command-driven” economy…..with smart governance Singapore has managed to do well. Singapore started China’s first industrial park in Suzhou some 20-30 years ago…today Suzhou is generating a GDP the equivalent or more of Singapore! That must surely tell us some key learnings..that China and the Chinese Government can adapt and adapt well.
I believe there are several unique factors and facts which will lay the foundation for a successful transformation of China into a modern global nation.
1. The Chinese Government is more flexible than we think!- the Chinese Leadership & communist party takes its history lessons very seriously and I believe they will want future generations to view the Communist party as having brought the Chinese people from the brink of being conquered by foreign invaders; a decaying Manchurian empire in the 1949 – after the Party’s 100 year rule -by 2049- that China re-emerges as a leading global leader.
2. China is laying a stronger and broader foundation for future growth than we can see!-urbanisation of the remaining 600M rural population; driving these 600M to consume by taking away the traditional need to excessively save for healthcare and education costs- A new healthcare regime is slowly be paved.
3. The Chinese youth are enjoying more freedom than we think! Thanks to internet, spread of weibo/blogging..the younger generation are exposed to global news and events; with internet as their social media- rapidly forming opinions by the millions should they sense any wrong doings or unfair treatments by the elite; by the rich on the ordinary citizen- this is creating a powerful “policing” effect on society.
4. The Chinese people are more entrepreneurial and hungry for consumption that we believe! The Chinese have always been business-minded and through history natural consumers of material goods & services..So much wealth has been created over the past 10 years by this whole generation of entrepreneurs who are now feeding the system by being investors/LPs in VC/PE Funds sprouting and growing strongly throughout China. Already we are witnessing the hunger for luxury goods by these wealthy Chinese.