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Factors fuelling the Chinese economy

Five facts foreign companies should know when considering doing business in China // Tip 2

3 factors driving high level investment in China:

  • China spends a lot on transport: its original 2018 budget has been raised by 10 billion dollars, partly to mitigate the potential impact of the US’ trade embargoes introduced in 2018. It’s the plan to increase the pace of construction of logistics hubs, roads into rural areas and inland waterways. Transport efficiency has a direct impact on productivity: the investments should also boost the economy.

  • The workforce, totalled 788 million in 2017, is increasingly skilled and diverse. There is a recent trend towards better educated younger people, who focus on service sector and technology jobs. It will improve labour flow into some of the country’s key growth sectors soon.

  • Productivity rises, but the rate of growth has been slowing. China is not unique in this respect: productivity growth has been sluggish in OECD countries since the global financial crisis of 2007/8. Although this could be a problem for China in the medium to long-term, there are solutions. Not the least, the ongoing development of an education system aligned to the needs of the economy.

Tomorrow, we’ll tell you more about the legal commitments for doing business in China!

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