Gestion de la diff

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Zhan Su, Université Laval Quebec and Canadian
firms faced with an emerging China Presentation
at the CÉRIUMs Summer School China Risen How it
changes and changes us
2
Quebec and Canadian firms faced with an emerging
China
Dr. Zhan SU Professor of international
management and business strategy Director of
GÉRAC (Research Group on Contemporary
Asia) Université Laval July 2006
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China is attracting attention from the whole world

• Chinese burden (Brown, 1994)
• Chinese illusion (Segal, 1999 )
• Chinese manipulation (Rawski, 2001)
• Bankruptcy of China (Chang, 2001 )
• Chinese miracle (..., 2002 )
• Chinese opportunity (, 2003 )
• Chinese threat (, 2003 )
• Chinese jungle (, 2005 )
• Chinese shocks (Brown, 2005 )

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• Part 1
• China as a world factory myth or reality?
• Part 2
• Trade relationships between Canada/Quebec and
  China a win/lose, lose/lose, or win/win
  relationship?
• Part 3
• Quebec and Canadian firms faced with an emerging
  China what position and which strategies to
  take?

5
Fundamental characteristics of China

• - An emerging key economic player
• - A developing country
• Still more than 100 million people living in
  poverty
• Current GDP / capita is equal to South Korea in
  1982 and Japan in 1961. They need another 25
  years to reach the current GDP / capita in Japan.
  
• - A country in transition
• One thing China is not lacking today are
  PROBLEMS. But, as long as there is growth

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The rise of Chinese economy is an undeniable fact

• Growth 9.4 from 1978 to 2005, from 147 billion
  US to 2,240 billion 4th biggest
• GDP per capita from 340 US to more than 1,700
  US in 2005 China quickly surpassed India
• Poverty reduction from 500 million to less than
  100 million a record
• International trade from 20 billion US in 1978
  to 1,422 billion in 2005 from less than 1 of
  world trade to 6 currently 3rd biggest
• Foreign currency reserves from 0.17 billion US
  in 1978 to 854 billion in February 2006 1st
  place

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• Part 1
• China as a world factory
• myth or reality?

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Exceptional growth of exportations
China 1200 Malaysia 600 Mexico
600 Brazil 300
Source WTO
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China, a world factory

• 90 of DVDs
• 75 of toys
• 70 of tractors
• 65 of sports goods
• 60 of bicycles
• 58 of telephones
• 50 of cameras
• 45 of watches and clocks
• 40 of screens
• 40 of micro-waves
• 36 of television sets
• 30 of air-conditionners
• 20 of refrigerators

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Made in China myths (1)

• - China does not have a dominant place in world
  manufacturing industry.
• Although China is currently the first producer of
  more than one hundred products, it realizes only
  5 of the world industrial production, far behind
  the United States (20), Japan (15) and Germany.
• China is particularly weak in industrial goods
  production where the added value is much more
  important (a share of 30 in the Chinese
  manufacturing industries against 42 in the
  United States, 44 in Japan and 46 in Germany).
• Currently, China does not have the necessary
  technological level to become a world
  manufacturing center, because it is very
  dependent on advanced technologies coming from
  abroad, and this, in most of its industries.

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Made in China myths (2)

• - Products made in China are the result of a
  globally organized production system
• China is not the main master of the made in
  China products. China currently counts
  approximately 500.000 companies with foreign
  capital. They contribute to more than 33.4 of
  the Chinese industrial production and to more
  than 60 of Chinese exports.
• A lot of countries participate in the production
  of made in China. Ex of the 12 million lap-top
  computers sold by China to the United States in
  2005 the majority of the key pieces (screens,
  software, sound cards, hard drives, etc.) were in
  fact imported from around the world to be
  assembled in China. The true contribution of
  China in this case represents less than 30 of
  the final value of the product.

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Made in China myths (3)

• - China only obtained a small percentage of the
  value added of the products made in China
• The development of the products made in China
  was very beneficial for China. There is today
  more than 80.000.000 jobs in China directly
  involved in this activity. Thanks to the
  technological and managing learning, the
  competitiveness of Chinese companies is no more
  limited just to the low cost of Chinese labor.
• However, China just obtains a small percentage of
  the value added of products made in China. Ex
  to purchase an Airbus A-380, China needs to
  export 800 million shirts. A Barbie doll,
  produced for 2 US in China will be sold for 16
  US in the United-States.

13
Made in China myths

• China occupies today a very important place in
  the world economy. That is due as much to its
  relative economic weight as to the impacts
  generated by its fast rise. However, it is
  exaggerated to already qualify China as a world
  factory, the title that was given to empires of
  past and present (England, the United States,
  Japan, etc). China should rather be considered as
  a country which is today only an assembly
  workshop of world in industries of consumer
  goods, but aims at becoming a world industrial
  superpower.

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What will be the future of the Made in China?

• According to many experts, in spite of
  innumerable problems, Chinese manufacturing
  industries will in the future still accentuate
  their place in international market, and will
  occupy, in addition, an increasingly important
  place in the field of high technologies.
• China is an atypical developing country, because
  it has at the same time the absolute advantages
  with regards to costs, the comparative advantages
  with regards to productivity and the competitive
  advantages in several high-tech sectors.
  According to a study by Mc Kinsey (2002), in
  several industrial sectors, the productivity of
  Chinese workers is already 20 greater than
  European countries.
• An increasingly complete and efficient industrial
  system, an important tank of rural human capital,
  little qualified but inclined to work for low
  wages, a political stability ensured by a
  totalitarian regime which however puts the
  economic growth at the center of its concern, an
  increasing domination of the private companies in
  Chinese economy, the existence of an important
  and relatively inexpensive infrastructure are as
  many factors that contributed and which likely
  seem to continue to contribute to the rise of the
  made in China products in international market.

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China will remain the giant of the manufacturing
products
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China a world laboratory?Results of a survey to
American high-tech firms done by The Economist
in 2005

• Favoured countries for the implementation of RD
  centers in the upcoming years
• China (39)
• United States (29)
• India (28)
• Determining factors
• Fiscal advantages (70)
• Current and future local market
• Labour costs
• Large supply of skilled workers

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• Part 2
• Trade relationships between Canada/Quebec and
  China a win/lose, lose/lose, or win/win
  relationship?

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Principal trade partners of China in 2005
Origin of import. in 2005 Origin of import. in 2005
Country Part ()
Japan 15.2
South Korea 11.6
ASEAN 11.4
Taiwan 11.3
EU 11.1
United-States 7.4
Australia 2.5
Russia 2.4
Saudi Arabia 1.9
Hong Kong 1.9
Destination of export. in 2005 Destination of export. in 2005
Country Part ()
United-States 21.4
EU 18.9
Hong Kong 16.3
Japan 11.0
ASEAN 7.3
South Korea 4.6
Taiwan 2.2
Russia 1.7
Canada 1.5
Australia 1.5
Source Ministère du commerce de la Chine
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Punish Us, Pleaseby Jim Stanford, Canadian Auto
Workers, No 80, 25 avril 2004

• Chinese officials have hinted darkly that if
  Canadian politicians express support for Tibetan
  independence in meetings with the Dalai Lama,
  there could be repercussions for our bilateral
  trade. We should take them up on that offer.
  Because the evidence is mounting that trade with
  China is doing us much more harm than good.
• A decade ago, we had a modest, balanced trading
  relationship. Since then, our exports to China
  have grown by 2 billion - but our imports have
  grown 8 times as much. That makes China our
  second-largest trading partner, and our 15
  billion bilateral deficit is our largest
  anywhere. That imbalance represents at least
  50,000 lost Canadian jobs.
• The bleeding is set to accelerate in the years to
  come, as Chinese exports become more diverse and
  technically sophisticated. Stop thinking about
  plastic toys from McDonald's start thinking
  about cars, computers, and airplanes.
• Free-traders have a pat answer. China is a
  low-cost, labour-intensive country. It's good for
  us to import labour-intensive goods from them, in
  return for exports of knowledge-intensive goods
  and services from us. That's how "comparative
  advantage" works.
• Yet this standard free-trade model has never been
  more out to lunch than in explaining Canada-China
  trade. China's boom does not reflect a natural
  abundance of labour (which every poor country
  has). It reflects a deliberate, semi-planned
  strategy to construct advantage in increasingly
  sophisticated industries, with the help of
  powerful state interventions subsidized capital,
  investments in infrastructure, a managed
  currency, and - of course - forcibly cheap and
  compliant labour.

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• What's more, our puny stake in China's phenomenal
  growth - 5 billion annual exports to a country
  with GDP approaching 10 trillion - does not
  mostly reflect our "brains." It is our
  traditional commodity industries (minerals,
  agriculture, and other resources) that will
  capture most of the crumbs coming our way from
  China's economic miracle. Believe it or not,
  trade with China is reinforcing our historical
  status as an exporter of staples, even as they
  work consciously to escape their role as a
  supplier of cheap labour.
• Standard responses to the Chinese trade threat
  won't even slow the coming explosion of our
  jobs-destroying bilateral deficit. Investing in
  education for Canadian workers is no panacea
  workers in China, India, and elsewhere are just
  as capable of learning high-tech skills as
  Canadians are. Easing interest rates won't help
  much, either - beyond undoing some of the damage
  of last year's run-up in the loonie. Pressing
  China to float its currency (the current U.S.
  tactic) will make hardly any difference the yuan
  could double tomorrow, and companies would still
  be flocking there.
• Ultimately, it will require direct measures to
  limit trade imbalances and force Chinese planners
  to buy as much from us as we buy from them.
  Fortunately, by threatening their own retaliation
  for our hospitality to the Dalai Lama, the
  Chinese have made it easy. We'll let them disrupt
  this one-sided relationship, instead of us.
• Applying my well-known diplomacy and tact, I
  therefore propose an escalating 8-point strategy
  to disrupt our trade. It's sure to get a rise out
  of China's touchy apparatchiks, and provoke the
  punishment we so richly deserve
• Appoint Iona Campagnolo as our new ambassador to
  Beijing - after she takes an assertiveness-trainin
  g course.
• Make the Dalai Lama an honorary citizen of
  Canada (his purchases of incense can stay
  GST-exempt).
• Keep Canada's team home from the 2008 summer
  Olympics in Beijing. (The only risk is that
  no-one might notice.)
• Lend Don Cherry to provide commentary for
  Tibetan hockey games (since his days at CBC are
  numbered anyway).
• Invite Tibet to join NAFTA - with appropriate
  dispensation for their softwood lumber exports.
• Pay 100 million to several ad agencies to
  sponsor patriotic Tibetan festivities.
• Organize an official bilateral cultural
  exchange. Tibet would send us a traveling exhibit
  of artifacts from Lhosa, and we would send them
  DVDs of the Trailer Park Boys.
• Send MP Dennis Mills to shout "Vive le Tibet
  libre!" from a balcony of the Imperial Palace.
• If all else fails, we could always just get down
  on our knees and plead for sanctions. I know it
  sounds kinky to beg for punishment. But in this
  case, the facts are clear it's gonna hurt them
  far more than it hurts us.
• Jim Stanford is economist with the Canadian Auto
  Workers. He owns no handcuffs, whips, or leather
  straps.

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Hidden impacts for Canada (1)

• An economy of several billion per year for
  consumers
• According to several recent American studies, the
  imports of made in China products would have
  made it possible to the American consumers to
  save about 60 billion US per year in the
  nineties. Since the value of trade sino-Canadian
  represents nearly 1/10 of that of the
  sino-American exchanges, we can estimate that,
  thanks to the consumption of the cheap products
  made in China, there are several billion
  dollars which can be saved or consumed for other
  goods by the Canadians each year. For families
  with moderate incomes, this means an increase of
  purchasing power by 5 to 10
• Increasing revenues from Canadian firms operating
  in China

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Hidden impacts for Canada (2)

• Improvement of Canadian firms international
  competitiveness
• . Since several years, Canada has imported more
  industrial goods than consumer goods from China.
  Quebec and Canadian companies tend more and more
  to take advantage of the strengths of China to be
  modernized and to reinforce our international
  competitiveness
• The trade with China constitutes an engine of
  growth for the Canadian economy, given the
  increasing importance of Canadian exports towards
  China.

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Canadian imports from China 2004 - million Canadian dollars Canadian imports from China 2004 - million Canadian dollars Canadian imports from China 2004 - million Canadian dollars
Product Value Variation ()
Machines 4707.80 55.58
Electric materials 4325.45 32.77
Toys and sports equipments 2049.37 6.38
House furniture 1634.58 29.99
Woven clothing 1120.05 15.08
Shoes 913.18 5.34
Knitted clothing 887.79 29.34
Steel and iron products 752.29 38.66
Plastic 721.32 12.35
Optical and medical equipments 680.73 24.53
Sources World Trade Atlas
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Canadian exports bound for China 2004 Million Canadian dollars Canadian exports bound for China 2004 Million Canadian dollars Canadian exports bound for China 2004 Million Canadian dollars
Product Value Variation ()
Wood pulp 1033.23 23.36
Organic chemicals 868.68 107.8
Cereals 766.57 1059.5
Machines 320.76 28.86
Fish and sea food 295.17 17.59
Manure 274.86 7.52
Electric material 251.67 -7.83
Nickel 232.15 152.27
Ores, slags and ashes 161.13 9.12
Grease and oil 152.79 158.45


Sources World Trade Atlas
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29

• Part 3
• Quebec and Canadian firms faced with an emerging
  China what position and which strategies to
  take?

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Is the worst still to come ?
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Quebec/Canada faced with the emergence of China

• The emergence of China is both a threat and an
  opportunity.
• Above all, it represents a challenge.
• If China were not the major supplier of consumer
  goods for Western countries, another developing
  country would be.
• The most important is to be able to take
  advantage of the competitive factors of China
  that are in our favour, and not try to beat China
  at any cost
• To be successful in global competition, firms
  must put emphasis on the development of new and
  distinct competencies, instead of simply trying
  to keep all what we have. We need to know how to
  do things differently than our principal
  competitors instead of contenting ourselves to
  passively follow their lead.

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Quebec and Canadian companies should reconsider
their business strategies

• Produce by ourselves?
• Excel in the domains where we posses distinctive
  advantages, or where there are strategic
  importance for our future.
• Have them produced?
• Delocalise in a selective manner the activities
  that represent the least amount of competitive
  advantage in order to take advantage of the
  strengths of China to reinforce our international
  competitiveness and even to halt the
  disappearance of certain industrial sectors.
• Produce together?
• Exploit complementarities and synergy through
  partnerships.
• Dont produce, or stop producing?
• Be capable of bring about the radical changes
  necessary to ensure the survivability of our
  firms.

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Possible competitive strategies faced with
Chinese competition

• In industries that are labour and capital
  intensive
• Integration by specialisation (outsourcing)
• Confrontation by differentiation
• Avoidance by focalisation (niche)
• In knowledge intensive industries
• Exploitation by penetration
• Integration through collaboration
• Positioning! Positioning!!
• Positioning!!!

36
The business opportunities in China are too
attractive for us let them pass by

• Poverty is ever present
• Still more than 100 million people living in
  poverty
• Current GDP / capita is equal to South Korea in
  1982 and Japan in 1961
• Wealth / capita is currently only 2 of the
  American figure
• They need another 25 years to reach the current
  GDP / capita in Japan and more than 30 years to
  reach the South Korea
• But, a huge potential consumer market
• The middle class represents 20 of the population
• Annual growth of 20 in luxury goods China will
  be the second largest market in 2015
• 70 000 marriages celebrated each day
• 7th market in 2004 (3), but 2nd in 2014 (11)

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New Chinese development strategy

• More value added
• More efficiency
• More socially responsible
• More environmental
• More diplomatic
• Objectives
• - Growth by 2010 double the GDP per capita of
  2000
• - Efficiency (consumption of energy resources for
  each unit of GDP) 20 less in 2010 than in 2005
• - Innovation capacity In the top 20 by 2020
• - Standard of living a developed country by 2050
  

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Factors for future Chinese growth

• Growth in local consumption (especially by the
  rural population)
• Urbanisation (40 vs. 60 in Asia)
• Growth in service sectors (40.7 vs. 70 and
  more)
• Improving the competitiveness of Chinese
  products on the international market (labour
  costs, productivity and quality)
• Development of high technology domains

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To succeed in doing business in China,our
companies must be

• more proactive
• more reflective
• more adapted
• more concerted in our efforts
• in it for the long haul
• better supported
• The Chinese market is too complicated for us to
  treat it lightly

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Chair of global business strategies and emerging
Asian markets
Chair Dr. Zhan SuFaculté des sciences de
ladministration, Université Laval

• Mission
• Raising awareness of the new reality of the Asian
  competition
• Competitive intelligence of emerging Asian
  markets evolution
• Developing expertise and decision-making tools
• Training experts on the matter
• Providing assistance to Quebec and Canadian
  companies and organizations.

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We are not so far behind, and China is not so far
ahead. But, we still need to do better! We do
need to make changes. If not, the worst is
still to come.

• It is not the strongest of the species that
  survives, nor the most intelligent that survives.
  It is the one that is the most adaptable to
  change. - Charles Darwin

42

• Part 4
• China since 1978
• whats happened and why?

43
The determining factors of Chinese growth

• Introduction of a market system (private firms
  61 in 2004 foreign capital 8.7 of total
  assets)
• Governments power to mobilise and to control
• Investments (44.2 in 2004)
• International markets (69.8)
• Internal consumption (53)

44
Two fundamental policy changes adopted in 1978

• Reform to the economic system
• Reform of economic decision making mechanisms
• Reform of motivation mechanisms
• Openness to the world
• Introduction of capital, technologies and modern
  management methods from the rest of the world

45
The processes of economic modernisation in the
Mao era

• Predominance of ideological movements
• Monopoly of public property in the national
  economy
• Creation of a a centrally planned economy
• Practises of equal distribution of riches

46
Failure of the Maoist ideology in the economic
sphere

• Large fluctuations and discontinuities in the
  evolution of the national economy
• An economy of shortage
• Poor performance of state run firms Eating from
  the same pot
• Lack of motivation on the part of workers, each
  with an iron rice bowl

47
Principal characteristics of Chinese reform

• No precise objective (model) a trial/error
  approach We cross the river by looking for the
  stone bridge in the water
• Gradual approach progressive elimination of the
  elements of the planned system and the
  progressive introduction of market elements
• Development based on inequality We must allow
  a small number of people and regions to get rich
  firstly
• Fundamental condition political stability
  assured by the domination of the Communist Party
  of China
• Motivation of the Party Only economic
  development will allow the Chinese Communist
  Party to remain in power

48
The transformation of the Chinese State

• From a State that produces, programs and protects
  to a State that firstly promotes, and also
  programs, protects and produces
• China today is remarkably open. But this is not
  due to the fact that it is very liberal, rather
  because it is not.
• China today combines all the most negative
  aspects of the two worlds a capitalist culture
  introduced by Deng, superimposed on a traditional
  Maoist bureaucracy.

49
Index of corruption perception Source
Transparency International 2003
Rank Country Score
1 Finland 9,7
11 Canada 8,7
11 United Kingdom 8,7
14 Hong Kong 8,0
16 Germany 7,7
18 United States 7,5
20 Chile 7,4
23 France 6,9
30 Taïwan 5,7
40 Hungary 4,8
54 Brazil 3,9
54 Czech Republic 3,9
64 Mexico 3,6
64 Poland 3,6
66 China 3,4
83 India 2,8
86 Russia 2,7
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The determining factors of Chinese growth

• Introduction of a market system (private firms
  61 in 2004 foreign capital 8.7 of total
  assets)
• Power to mobilise and Government control
• Investments (44.2 in 2004)
• International markets (69.8)
• Internal consumption (53)

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Investments in China
Year Total sum of the investments (100 million US) Volume of foreign capital (100 million US) of foreign capital / sum of investments
1991 1050.97 43.66 4.15
1992 1465.22 110.08 7.51
1993 2268.71 275.15 12.13
1994 1977.34 337.67 17.08
1995 2397.23 375.21 15.65
1996 2763.22 417.26 15.10
1997 3059.97 452.57 14.79
1998 3437.29 454.62 13.23
1999 3608 403.18 11.17
2000 3944.26 407.15 10.32
2001 4458.11 468.46 10.51
2002 5223.94 527.43 10.10

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Weight of foreign investments in Chinas
industrial production (in millions of yuan)
53
The determining factors of Chinese growth

• Introduction of a market system (private firms
  61 in 2004 foreign capital 8.7 of total
  assets)
• Governments power to mobilise and to control
• Investments (44.2 in 2004)
• International markets (69.8)
• Internal consumption (53)

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Degree of opening
  1998 1999 2000 2001 2002 2004
Canada 69,27 70,58 73,79 70,15 67,18
USA 18,65 19,02 20,90 19,06 18,26
Argentina 19,35 17,23 18,16 17,47 33,65
Bolivia 36,33 33,87 36,47 37,31 39,48
Brasil 14,18 18,83 18,89 22,93 24,33
Chili 49,55 45,38 49,95 54,60 55,23
Mexico 59,00 58,79 59,56 53,13 52,38
Paraguay 45,49 34,19 39,68 46,32 50,84
Uruguay 29,42 26,75 28,68 27,43 31,54
Venezuela 34,44 33,16 39,60 36,00 41,05
China 34,23 36,38 43,89 43,35 49,03 70
Indonesia 79,82 51,91 63,68 61,91 51,13
Japan 16,94 16,35 18,03 18,02 18,88 24
Malaisia 182,37 188,79 199,86 183,99 182,44
Vietnam 76,67 81,17 96,52 95,15 101,27
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Middle school and university studies
Korea 100 60
Singapore 74 39
Philippines 78 29
Thaïland 59 22
Malaisia 64 12
Indonesia 56 11
China 70 5
57
Students in science and engineering
China 53
Korea 34
Indonesia 28
Malaisia 28
Philippines 23
Thaïland 20
58
Attractiveness of the Chinese business environment

• - Productive and inexpensive workforce
• Average hourly wage 0.50 US/h
• Very large pool of skilled and unskilled workers
  (20 millions enter workforce each year 300
  million too many in rural areas)
• Current and future importance of the Chinese
  market
• Political stability
• - Competitive advantages
• - Favourable fiscal conditions (competition
  between local governments)
• - Low exchange rate
• - Complete industrial system
• - Low infrastructure and real estate costs
• - Relatively abundant and inexpensive supply of
  natural resources and raw materials

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The Chinese model of development is put into
question

• Growth vs. real gains
• Growth vs. efficient economy
• Growth vs. social justice
• Growth vs. resource constraints
• Growth vs. sustainable development
• Growth vs. outside resistance
• One thing China is not lacking today are
  PROBLEMS. But, as long as there is growth

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China the blue collar workers for the world

• 6 of global industrial production (Japan 15,
  United States 20)
• 40 to 100 B annual surplus
• 100 000 000 jobs (80 000 000 direct jobs)
• Technological and managerial learning curves
• However
• 60 is done by foreign firms operating in China
• 85 is for foreign brands
• 40 of exported products have very little
  value-added 800 million shirts for 1 Airbus
  A-380 Barbie doll 2 vs. 16 average price per
  textile product 4
• Competitiveness to the detriment of the
  well-being of Chinese workers
• High procurement costs (annual bill for imported
  oil 2 of GDP and more)
• Disastrous environmental consequences (15 of GDP)

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The determining factors of Chinese growth

• Introduction of a market system (private firms
  61 in 2004 foreign capital 8.7 of total
  assets)
• Governments power to mobilise and to control
• Investments (44.2 in 2004)
• International markets (69.8)
• Internal consumption (53)

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China is subsidizing foreign countries

• Product prices
• Fiscal incentives
• Resource prices
• Cost of capital
• Harmful industrial projects accepted
• Social conditions of workers
• Financial losses (foreign bad credits 5 vs.
  0.25 - 0.5)

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Inefficiency of the Chinese economy

• Two thirds of financing for one third of the
  production (State run)
• An inefficient and incomplete financial system
  bad debt, 30 to 50 of GDP
• 40 more energy resource consumption needed by
  iron and steel firms 30 more in the
  electricity sector
• 5 the consumption of water and 3 three times more
  energy needed for each 10 000 Yuan of GDP
  produced
• 80 of fatal accidents for 35 of the global coal
  production
• Coexistence of penury and overproduction (86 of
  products implicated)
• Investments for political interests
• Speculative investments (real estate,)

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Social injustice

• Growing divide in cities
• GINI coefficient (inequality of distribution)
  0.424 in 1996, 0.456 in 1998, 0.457 in 1999,
  0.458 in 2000
• 20 of the population hold more than 50 riches,
  4.7 for the poorest 20
• 50 des urbanites and 90 of the rural
  population have no medical insurance
• Growing divide between urban and rural
  populations
• More than 6 times difference in revenue levels
  and buying power
• 300 to 400 million rural workers too many

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China faced with a lack of resources

• Relative poverty of resources 7 of the
  cultivable land in the world, 6 of potable
  water, 4 of forests, 1.8 of oil reserves, 0,7
  of natural gas
• In 2004, China already consumed 20 of global
  aluminium production, 35 of steel production,
  35 of coal production, 45 of cement production,
  8 of oil production,
• Self-sufficiency in energy in 2004 94
• Coal remains the most important energy resource
  in China (70 of the total). 40 of oil is
  imported (Saudi Arabia, Iran, Oman, )
• By 2020, the consumption of coal and oil will
  have doubled
• An increase in the price of oil by 10 reduces
  the GDP by 0.5

66
China is severely touched by pollution and acid
rains (a loss of 15 of the GDP per
year)Source Economic images of the world 2005
67
China faced with trade conflicts

• Target of anti-dumping charges (15 globally, 60
  cases in 2002 and 49 in 2003)
• Conflicts related to problems concerning prices,
  norms, working conditions, IP infringement,
  exchange rates, etc.
• Complaints from developed countries but also from
  developing ones
• Occidental countries refuse to recognise the
  Chinese economy as a market economy

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Source lObservateur Économique Canadien, juin
2005
69
The rise of the BRICs
Tiré de Goldman Sachs, Octobre 2003
http//www.gs.com/insight/research/reports/99.pdf
70
Evolution of the world economySource Keystone
India
71
(No Transcript)
72
China is not a homogeneous country

• Two worlds urban vs. rural
• 31 (34) administrative regions
• Three parts East vs. Centre vs. West
• Three pole of growth Delta of the Pearl River
  vs. Delta of the Yangzi vs. Bohai
• Close to 700 cities
• Favoured areas of development
• Segmentation ! Segmentation !! Segmentation !!!

73
A few cultural traits in todays China

• Materialism
• Voluntarism
• Conformism
• Pragmatism
• Collectivism
• Attachment to family
• Confucianism, Capitalism and Communism are the
  sources of Chinese culture today

74
China quickly surpasses India

• Source Banque Mondiale, Global Insight Inc.