Friday 19th Apr 2019 - Logistics & Supply Chain

China set to be world’s leading economy by 2025

Despite mounting fears over China’s trade surplus and economic stability, a leading group of experts predicts China will become the most successful global economy in the next twenty years. 
According to participants at a recent roundtable discussion hosted by supply chain finance business, China Export Finance, although China is under significant pricing and quality pressures, it will not only continue to compete as a global manufacturer, but potentially outstrip its Western rivals.
Featuring independent experts and representatives from the China-Britain Business Council (CBBC) and Chartered Institute of Purchasing and Supply (CIPS), the debate explored the key social, political and financial issues facing China’s economy. Even in the face of emerging competitive markets, rising costs, quality concerns, inhibiting payment terms and growing calls to tighten currency and trade controls, it found China’s economy is more resilient and less export-reliant than many forecasters currently believe.
Chairing the debate, Karl Alomar, co-founder and CEO of China Export Finance said “China’s economy is not in danger of implosion as many commentators are predicting. China’s key competitive advantage – its vast labour pool – will continue to ensure its global dominance in manufacturing. And, given the time and space to settle and self-regulate, China’s economy and trade levels will rebalance and stabilise.”
Eugene Chang, China business advisor, CBBC added ‘China is fully aware of the tensions caused by its huge trade imbalances and is taking measures, albeit slowly. The rest of the world will simply need to be patient – China has undergone rapid industrialisation and its economy needs time to mature. China will probably be viewed on a balanced playing field in twenty years time; by then it may well dominate the global manufacturing industry.’
Quality control of third party suppliers will be key to ensuring China retains its integrity as a global manufacturer. Roy Ayliffe, director of professional practice, CIPS, claims ‘Investing time with suppliers to ensure the right practices and check-ups are happening is important for any organisation, but is particularly true when sourcing from China. With local advice and the right purchasing and supply chain support, however, doing business with China can be both feasible and profitable.’
‘There are undoubtedly challenges regarding the credit culture and working capital available in China’ added Glyn Powell, director and co-owner of consultancy firm, JMK Special Events, ‘but financial flexibility and support is improving. If access to supply chain finance continues to improve, China will remain a force to be reckoned with in global manufacturing.’

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