Future growth must harness China's growing ranks of urban consumers
- By Kerry Brown
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E-mail Beijing Review, November 18, 2013
Factoring in finance
Finance is a complex sector to develop. The suggestion made at the plenary session was that building a finance sector in China will be incremental, and that the starting point will be centers like Shanghai and Tianjin. Shanghai has already opened a pilot free trade zone, where trading of Chinese currency might become possible. It is also clear that in Shanghai with the international financial center established there in the last decade, there is the framework for a financial sector which will be able to serve the huge domestic market. Finance will be the provider of jobs, and the high-quality growth that this government is aiming for.
An urban China brings challenges, however. Having such a vast group of people move into cities will create sustainability issues. Water provision is one of the key issues, with the water table in major cities like Beijing now at critically low levels. Pollution will also be a massive issue. Shanghai registered 2 million cars for its roads, and still had to build a huge new subway infrastructure, much of it before the Shanghai Expo in 2010. Beijing currently has the second largest subway system in the world after Seoul in South Korea. Even so, with 5 million registered cars, roads are often clogged and car-related pollution high. Cities will have to become spaces for social and architectural innovation, because never before has the pressure on infrastructure and sustainability been so high. The impact of this on people's lifestyles, on their diets, on their relationships with each other, will be profound. In many cities, the majority of people will be newcomers, meaning that a sense of community and shared civic values will be important.
An urban China, as it is outlined through this plenary session, also creates opportunities for the outside world. Seeing Chinese increasingly as potential users of services as consumers who are keen to buy Western goods, and as partners in harnessing the enormous growth potential in China, is clearly sensible. China, as a manufacturing base and an exporter, is likely to be replaced in the decade ahead by China as a customer, a service user, and a market for technology and value-added goods. The plenary session communiqué, with its vision of an urban China and the routes to achieve that, is also a statement that multinational companies need to think of strategies to engage in this process. Research produced in Europe recently has shown that Chinese consumers in cities are information hungry, open minded (there is little of the 'buy-local' mentality that sometimes dominates Western markets. The issue is buying good quality, reliable goods) and price conscious. For companies in the rest of the world to start reaching these new consumers is a fresh challenge.
The author is an op-ed contributor to Beijing Review and executive director of the China Studies Center at the University of Sydney.
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