China undergoing difficult transformation 'but future still bright'

Employees work on a construction site in Shanghai.
Employees work on a construction site in Shanghai.PHOTO: AFP

China's economic growth might be slowing, but the mood at the seventh FutureChina forum was optimistic. Speakers at the opening sessions yesterday were sanguine about opportunities in China while acknowledging the risks of overcapacity and structural reforms.

The two-day FutureChina Global Forum, which began yesterday, is held at the Shangri-La Hotel.

Deputy Prime Minister Teo Chee Hean, in a bullish opening speech, noted that China's economic development is in a new phase, going beyond being the factory of the world. While he said that China's economic transformation will require "difficult trade-offs", he is confident that the world's second-biggest economy will prosper.

"China has an impressive record of successfully managing reform and structuring the economy. There will be many new opportunities created in new markets and new fields in our growing Asia-Pacific region," said Mr Teo.

He noted that more than 7,500 Chinese companies are registered in Singapore, almost double from five years ago.

Local companies can tap opportunities to work with them, he said, such as providing financial, legal and arbitration services, and collaborating in Third World markets to capitalise on Singapore's 20 implemented free trade agreements.

IMPRESSIVE TRACK RECORD

China has an impressive record of successfully managing reform and structuring the economy. There will be many new opportunities created in new markets and new fields in our growing Asia-Pacific region.

DEPUTY PRIME MINISTER TEO CHEE HEAN

In the opening plenary session moderated by Mr Claude Smadja, former managing director of the World Economic Forum, panellists highlighted pockets of opportunities and growth in China.

Mr Anthony Tan, deputy chief executive of Singapore Press Holdings, noted the "tremendous" growth of China's digital economy.

He said: "Four years ago, I could stand in the streets of Beijing and get a taxi. Now, without a ride-hailing app, I can't. Cash was king in China, but now if I don't have WeChat or Alipay, it's difficult to get around.

"Necessity has made a virtue out of the transformation. Unmet demands have been met by the new economy... and I'm quite optimistic."

He added that China's ageing population could also be an area of opportunity for Singaporean companies, which have strengths in the healthcare sector.

Chinese Ambassador to Singapore Chen Xiaodong told the forum: "Old drivers of growth were losing steam, and new ones are not yet up and coming, but the fundamentals of the Chinese economy remain sound." He also pointed out that China posted 6.7 per cent growth in the last quarter, expanding slightly faster than expected.

Mr Chen said that employment figures are "excellent", highlighting that in the first six months, more than seven million new jobs were created in cities, hitting 71 per cent of China's annual target.

Ms Nina Yang, chief operating officer, Singbridge, Ascendas-Singbridge Group, pointed to some positive urbanisation trends, including increasing government moves to reinforce city clusters, such as the Yangtze River delta cluster that includes first-tier cities like Shanghai and lower-tier ones like Wuhan and Jiaxing. These city clusters will help lower-tier cities to grow, she said.

Ms Yang also said that there are opportunities for companies in lower-tier cities, noting that third- and fourth-tier cities account for 65 per cent of consumer goods sales in China.

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A version of this article appeared in the print edition of The Straits Times on July 19, 2016, with the headline 'China undergoing difficult transformation 'but future still bright''. Print Edition | Subscribe