China's economy is well positioned to maintain good growth and a number of Chinese companies are becoming ready to be leaders instead of followers in high-tech sectors, a U.S. veteran expert on China's industry and economy said.
Handel Jones, founder, chairman and CEO of US-based International Business Strategies, Inc, made the remarks in an interview with Xinhua.
Moving away from the double-digit growth of the most recent decade, the world's second largest economy has been facing notable downward pressure and has entered a stage known as the new normal, characterized by slow, but higher quality growth.
The economy posted 7.4 percent growth in 2014, its weakest since 1990. The annual growth target was lowered to around 7 percent for 2015, arousing concern over the health and momentum of the economy.
"I'm confident that China, based on how things are going on, what the government is doing and what the companies are doing, is well positioned to have good growth in the next ten years," Jones told Xinhua.
As to the fear-mongers who foresee the collapse of China's economy, Jones said, "the Chinese economy has problems, but if you read the U.S. press, you have the impression that the collapse of the economy is ready to be announced."
"I don't see collapse of the Chinese economy, although it has to be careful about a lukewarm global market, overcapacity or risks arising from expanding local debts," Jones, who is paying his 50th visit to China, said.
The author of the best-selling book Chinamerica, he bases his confidence on the "enormous people assets" and an efficient and visionary government.
"China has a broad base of high quality people assets. There is a strong desire to succeed, and they are very motivated and entrepreneurial," Jones said. It is, however, important that they do not become complacent after initial success. There is a national goal as well as personal goals.
Another guarantee for the success of the Chinese economy is the role of the government in making visionary and grand industrial plans, guiding the industries and building the stage for companies to perform, he said.
"China is excellent at managing big projects and the growth of the electronics industry should be regarded as a big project," he added.
With these advantages, there is a high probability for Chinese companies to become leaders rather than followers in some of the most influential high-tech sectors, including 5G, Internet of things, semiconductors and automobiles, he said.
Taking the telecommunications industry as an example, Jones said, "In 4G, China was behind. But in 5G, China will be the number one due to the well-planned development strategy and companies' commitment as well as the role of government in supporting the corporate sector."
Jones deems the Chinese government's plan to build a 100-billion-USD semi-conductor industry as an excellent example where the government is taking initiative and of where government and industries can cooperate on becoming global leaders.
Jones also authors another best seller China's Globalization: How China Can Become No. 1, which offers insight into how China will drive major changes in the global competitive environment over the next decade. Market forces alone are not sufficient to make the big advances required to be No. 1.
While working with several of China's leading high-tech companies, as well as many foreign companies that are leaders in many market segments, Jones has noticed a change from being followers to becoming innovators and planning to be leaders. "This is a significant change in the mindset in China over the past one to two years," he said.
Jones attributed the change to a sharp increase in R&D investment, a boost in managerial levels and enhancement in entrepreneurial skills as well as confidence in being able to compete in global markets.
Despite the bright future for China's companies, there is still a long way to go before they can become clear leaders and innovators. In Jones' eyes, it might take seven to ten or even 20 years, but "China is on a growth path, and the long-term prospects are positive."
To leap ahead of their counterparts in developed countries, Chinese companies have to first change their mindset and focus on quality and profitability instead of market volume and low cost, Jones said.
Some Chinese companies accept or strive to be low-cost copiers and are satisfied with being No. 2. This has to be changed before China can have its own iphones, he said.
"Long-term strategies for winning have to be well-planned, and close collaboration between corporations and the government is critical," Jones added.
