The greatest socioeconomic transformation of our time began 30 years ago, when Deng Xiaoping started the slow and painful process of bringing China into the global fold. To say that China has changed since then is a huge understatement — because everything has changed.
In China itself, rapid industrial development has coincided with mass urbanization to lift hundreds of millions out of poverty. Until recently, annual GDP growth was consistently around 11%, a pace that saw the size of the economy double every seven years. But the impact of that phenomenal growth has transcended China’s borders. Not only did it create the seemingly insatiable demand for stuff that drove the recent commodity boom, it also transformed the way the world does business. The story of China’s opening up coincides with the development of modern globalization. China is, for lack of a better phrase, globalization’s poster child.
If that’s the case, then today it is striding into a confident adulthood. If anything, the U.S.-led financial crisis and the global recession that is its progeny have only accelerated the shift of economic power eastward.
China is, of course, not immune to a worldwide slowdown, as several of the stories in this special report make clear. But its response — a US$586-billion stimulus package announced Nov. 9 — is significant not just because of its size, but also because of its direction: inward. China, whose GDP will continue to grow next year, is focused on developing its domestic economy rather than financially supporting its biggest customers. When the dust settles on the global downturn, the era of China the manufacturer might have given way to a new era — of China the market.
Are Canadian businesses ready? They had better be.