Eminent economist Zhao Xiao reveals the opportunities for investment in China’s burgeoning economy, as well as the starring role Christianity has in an economy’s success.
Contributed By Jesscy Chua and Yong Yung Shin
In 2002, China’s leading economist Zhao Xiao made a bold proclamation when he published a paper titled “Market Economies With Churches and Market Economies Without Churches” which stated that the key to America’s economic success was its churches. Currently a professor at the University of Science and Technology Beijing, Zhao is also the founder and chairman of Cypress Leadership Institute, which aims to help Chinese businessmen transform the marketplace through Christianity.
On April 1 and 2, The Marketplace hosted a leadership forum with Zhao at Holiday Inn Orchard City Centre and The Fullerton Hotel, which saw a turnout of entrepreneurs and business people alike.
OPPORTUNITIES IN CHINA FOR ASIA’S BUSINESSES
Presenting a detailed statistical report of China’s economic growth, Zhao said that China, emerging strong out of the global financial crisis, is leading Asia’s economic growth in contrast to countries such as the United States and Europe. In fact, China’s foreign investment growth has turned inward, focusing on domestic investment and consumerism.
Quelling the words of naysayers who predict that China’s economy will collapse soon, he assured that China’s economic growth will continue to grow at 9 percent annually for the next five years at least. With the relaxation of foreign investment policies, however, foreign investors need to be prepared to compete on a level playing field with local enterprises.
Zhao suggested that one area with the most growth potential is in urbanization. He argued that in a typical country’s developmental growth, the level of urbanization is higher than its level of industrialization; in China, the level of industrialization has exceeded its urbanization and thus, the state will be ramping up its urbanization efforts for the next 10 years.
He also advised investors to be in the know about China’s new plans and regulations, and that the sectors of information technology, smart technology, research, sustainable development and service have been targeted for growth.
He then gave an example of foreign brands such as web service providers Yahoo! and Google, saying that these companies could not overtake China’s local brand Baidu due to an uneven distribution of wealth among its leaders.
Zhao then highlighted several risk factors such as political change, war and charges imposed on foreign investors, policy changes, inflation, increases in tax revenue and capital risks wherein China has entered into a “Lewisian Turning Point.” He ended his speech by quoted China’s President Hu Jintao as saying “It is a long-term choice of China to be open to the outside world so as to attract foreign investment.”
The subsequent Q&A session was moderated by Teng Theng Dar, former CEO of Singapore Business Federation, and Paul Chan, executive director and head of the Asia Pacific ex Japan Equity Team.
CHRIST IN CORPORATE CHINA
It has been projected by many economists that in 10 years, China’s economy will surpass that of the U.S. and become the world’s largest. Parallel with this economic growth, Zhao believes that China is at the crossroads of its third rise to worldwide influence—the first of which happened during the Han Dynasty in 206 B.C. where Confucianism and Taoism melded to form the prevailing culture, and the second, during the Tang Dynasty in 618 A.D., when Buddhism came into the equation.
He noted that every time China spread its dominance, there would be a cultural shift—this imminent transformation China’s transformation is undergoing is different from the previous ones because of the Christ factor.
This Christ factor, one founded on God’s unconditional love, can help cultivate a “covenant spirit” and establish harmony in the family, the workplace and finally, the society at large. The “covenant spirit” is held by Zhao as the essence of a market economy because it would foster an environment undergirded by integrity and honesty—and this is something beyond the reach of regulations and policies because “mere laws cannot change a society if there is no corresponding value and spirit to support the law.”
Zhao made a strong case for the Christ factor in the transformation of a country’s economy stating that unlike other nations, Taiwan has enjoyed economic progress without the broadening of the gap between the rich and poor. He attributed this to the biblical value of fair distribution of wealth.
He also called Singapore a “model” for the rest of the eastern world to follow—it is creative and innovative, it is where all the elements of the east blends harmoniously with the west, and it is also the country that sends out the highest numbers of missionaries, in per capita terms.
Before the commencement of the Beijing Olympics, many Christian missionaries were deported from China. Borrowing from the Chinese saying that “the children of the poor mature quicker,” he said that God wanted the believers in China to grow up quickly on their own because of the tremendous spiritual window that was open over China’s socioeconomic landscape—as the nation continues to industrialize itself, many natives likewise will continue to journey from their homelands to the major cities to find employment; it is during this time when they will be most open to the gospel.
With a note of concern, however, he stated that while there has been an exponential increase of Christians in China, the country lacks Christians who are matured and influential. The key is not just to spread the gospel, but to spread it such that the values in the Bible can bring about a genuine transformation of lives for the better. “God has given different generations different ways of spreading the gospel, and in this generation, it is the internet,” said Zhao, whose blogs have garnered close to 10 million followers. “Even if you cannot do anything or say anything original, you can copy Bible verses and post it online.”
China’s most pressing need now is for its leaders to be groomed. “When you help China today, you are helping the world tomorrow. When you bless China today, you are blessing the world tomorrow,” ended Zhao.
Zhao Xiao is the former Head of the Economic Research Center, Macro Strategy Department of the Research Centre for State-Owned Assets Supervision and Administration Commission of the State Council in China. His other accolades included being named one of China’s Top Ten Scholars of Economics in 2006 and being nominated as “Best Contributing Expert of Finance of 2006” by China Finance Network, CCTV-2 and Sohu Finance.