The Business Confucius Institute Annual Lecture featuring Financial Times Associate Editor James Kynge took place at Leeds University Business School on 30 November 2017.
James Kynge is a prize-winning author and journalist who has spent 18 of the past 28 years working in China. Over 130 people gathered at Leeds University Business School to hear his lecture entitled ‘China Shakes the World (Again)’; which revisited the title of his bestselling 2006 book ‘When China Shakes the World’ and considered China’s influence on the global economic agenda today.
Winner of the 2017 Henry Wincott prize for journalism for his coverage of China and its complex relationship with the rest of the world, James is “neither bullish nor bearish”, and aims to describe the situation he sees. Based on what he sees now, his thesis for the lecture was:
So far, the Western view that China’s authoritarian system would prove incompatible with a vibrant and highly diverse economy looks wrong.
The apparent success of China’s “state capitalism” presents a huge puzzle; and James posed the question: “are Western assumptions since World War 2 faulty?”
The lecture he delivered to respond to these big questions drew from his extensive experience working in and writing about China, referring to data as well as anecdotes to illustrate his points.
Chinese business people cited as examples of the innovation that can come out of China included Hua Xia, founder of Eve Enterprise Group; Nan Cunhui, an industry leader in solar power technology, and Luo Fei, one of China’s largest suppliers of baby formula.
A graph showing the huge number of people in China moving above the poverty line and joining the ranks of ‘emerging’, ‘established’, and ‘affluent’ consumers was highlighted as one of the key slides to remember from the lecture. This shift creates a huge market of discretionary consumers in China, and domestic success can be leveraged by Chinese companies to make them into global brands.
James went on to discuss one area where China is ahead: big data and digital technology. Examples included Hangzhou, now a cashless city where even street vendors you to pay them with your phone.
It was unicorns that James claimed proved his thesis beyond any doubt; that is, the unicorns of the venture capital world – startups valued at over 1 billion USD. The graph showed clearly that China, an authoritarian and single-party state, can foster innovative startups.
The numbers are less positive when it comes to debt. China’s debt to GDP ratio is 260% and China uses 4 units of credit to produce 1 unit of GDP. This is clearly not sustainable.
Despite this, China continues to play the long game and invest heavily around the world – most notably with the ‘Belt and Road’ project. “In some countries it has the potential to change that country’s destiny,” said James.
In conclusion, James paid tribute to the nature of human endeavour in China, citing that as the reason for the country’s success.
The lecture was followed by audience questions about reforming the state owned sector; sustainability; investment and regional politics; anti-corruption measures; internal versus external debt; and the effect of China’s domestic environment (e.g. controlled Internet) on its ability to market products globally.