China Business Blog and Podcast

Despite slower growth than previous years, China’s economy is still expected to provide half of the world’s economic growth in 2009

NEWS STATEMENT FROM TECHNOMIC ASIA:

China’s government has just announced its fourth-quarter GDP at a paltry 6.8 percent, leading to a full-year GDP growth in 2008 of 9 percent, down from 13 percent growth in 2007. This marks the first time since 2002 that China’s GDP growth was below 10 percent. Sound like doom and gloom?

Conversely, the United Nations Development Program still predicts that, despite this slowdown, China will contribute more than 50 percent of the world’s total economic growth in 2009. Rather than become preoccupied with slowing growth in China, managers and investors should focus on the unique and plentiful growth opportunities for their companies, according to consultants at Technomic Asia, a Shanghai-based firm that helps Western companies develop China business growth strategies.

“If companies looking to do business in China focus on macro numbers, they’re missing the point,” said Steven Ganster, Technomic Asia’s managing director. “What does GDP mean to a company anyway? If the government says the economy will grow 8 percent in 2009 then you can bet it will; whether they need to plow $1-2 trillion into infrastructure, or even ship millions of refrigerators and small motorcycles into the countryside at huge subsidies in order to keep factories working.”

Management needs to get underneath these macro statistics and look at their specific market segments, Ganster added.

“We have a client in building products where the construction sector is expected to remain flat at best in the year ahead,” he said, “but their strongest product line helps make buildings more energy-efficient, and that’s a huge growth opportunity right now in China.”

Over the years, measurements and predictions of China’s economic conditions have been all over the map. More important than aiming strategies based on these illusory targets, companies should focus on more directly controllable and meaningful insights, according to Kent Kedl, general manager of Technomic Asia.

“Despite the supposedly dire circumstances in China, we’re going to see more big winners here in the year ahead. They’ll be the companies that put aside these macro numbers and dive deep into the specifics of their particular products, customers and channels,” Kedl said. “To succeed, a business has to go to where the action is, and in today’s global economy, that’s still China.”

(Official news release here)

This entry was posted on Friday, January 23rd, 2009 at 11:38 am and is filed under Technomic Asia news, economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.