China Business, Culture and Politics – Outlook 2015 – Keep An Eye On Alibaba, Xiaomi, WeChat, Consumers + Xi
In 2014 the Chinese economy surpassed the American economy as the world’s largest (as measured by purchasing power parity) Alibaba went public and established itself as perhaps the largest and most important e-commerce and technology company in the world, “China’s Super Consumers” changed the face of China and the world with their massive spending power and President Xi established a muscular China presence on the world stage.
2015 promises to be an even more interesting, active and world changing year for China. Businesses and governments around the world have largely accepted that China’s re-emergence as a global power is permanent and the smart ones are adjusting policies, products and prognoses for the future accordingly.
While it remains difficult to be to specific in predictions about where the Chinese economy, culture and body politics are headed in the coming year, we can use what we learned in 2014, what the Chinese government has signaled and how China has gone global in the past year to discern some broad trends and events that will be important for business, financial and political leaders around the world as they engage with China in 2015. The following are some high level key trends to plan for.
- THE PLAN – The development and gradual release of the 13th 5 Year Plan, China’s road map for its economy and society for 2015-2020 may be the biggest story for 2015. If you want to know what environment your company, your brand, your product and your investments will be operating in, then you must get an expert to interpret the plan and guide your strategy accordingly. Where the Chinese government wants to go will determine where you will go.
- THE PEOPLE GOING GLOBAL– The year will see the continuation and growth of investment by Chinese citizens in global real estate, education, healthcare and small businesses. Well off Chinese will continue to fuel growth and change the face of foreign markets as they seek to diversify their portfolios, stay healthy and give their kids bi-national educations and upbringings. The “China Global Demographic” will become ever more visible and important.
- CHINA INC. GOING GLOBAL – Chinese companies, both private and State-owned will increase investment in global markets. Expect to see heavy action in Mergers and Acquisitions in food + beverage, technology, healthcare, e-commerce, consumer products and natural resources. 2015 will also see a more robust effort to build Chinese brands on a global basis.
- TRAVEL – Chinese travel is booming and is not only changing the face of the travel, tourism and business travel industries but in some cases is making or breaking companies and destinations. The numbers were already growing faster than expected (100 million outbound travelers in 2014) but the 10 Year VISA agreement between China and the US will speed things up even more.
- CONSUMPTION AND SERVICES – The Chinese government from the top down and the people from the bottom up will continue to push for reforms that will allow the FIRE (finance, insurance, real estate) and healthcare services industries to grow, and China’s consumer portion of GDP will continue to grow. The 12th 5 year plan made it clear that China’s future depends on service and consumer GDP growth. Plan accordingly.
- ALIBABA – The e-commerce giant will continue to be the most important e-commerce and technology company in China and will start on its path to becoming one of, if not the most, important e-commerce and technology companies in the world. Look for major investments in overseas tech companies, supply chain infrastructure in China and platforms to help foreign companies of all sizes and shapes to reach Chinese consumers. E-commerce will continue to grow in all aspects in China as well as mobile technology that facilitates it.
- ENTERTAINMENT, MOBILE TECH AND SOCIAL MEDIA – The Chinese versions of all three of these sectors are now the largest in the world. They also all intersect with commerce in ways not seen in the the rest of the world. If you are seeking to sell products, make investments, and build companies in China, you almost cannot go wrong in entering or expanding your business in these categories.
- POLITICS –Look for a very active year on the world stage with major geopolitical maneuvering. President Xi and the new regime have spent the customary first two years of their administration working behind the scenes (with the typical conservative approach to politics, the economy and foreign relations) working on internal and external policies and plans, figuring out who holds what power and when and where new policies will be deployed. The new year will see the fruits of these efforts deployed and they will have major impacts on business relations with the rest of the world.
I wish you all a Happy New Year full of health, happiness and prosperity.
Learn how Chinese Consumers will change the world in 2015 – “China’s Super Consumers”
Learn how Alibaba will change global e-commerce in 2015 – “The Alibaba Effect”
Article originally by Michael Zakkour, Contributor at Forbes.com
To see the original report, click here.