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China in your hands

This makes China the biggest business opportunity. That much is surely
obvious, at least as far as western industry as a whole is concerned. The exact
nature of that opportunity for individual businesses is perhaps less obvious –
or at least more difficult to realise. As McGregor points out, the Chinese
understand the outside world better than the outside world understands them.
They say that nothing is impossible in China, but nothing is easy (or reverse
that if you’re a “glass half full” sort of person).

At the same time, the pace of change is truly remarkable. But while it’s
possible within a single gaze to count 40 ships and barges on the river that
flows through Shanghai – all carrying coal, cement, sand, just tonnes of stuff –
the market isn’t simply huge and growing. It’s also going through a fundamental
shift. Stand on the Nanjing Road – Shanghai’s Oxford Street – and be amazed at
how many Volkswagen cars there are: easily a third of the road’s vehicle
population. But for years VW had just one model in China – a Santana, bigger
than a Golf but smaller than a Passat. Now VW is saying it will make a full
range of models for sale to the Chinese. That Maoist uniformity is a thing of
the past.

Many businesses in the West feel threatened by the emergence of China, and
there have been a few scaremongering articles in this vein in recent weeks. In
some respects that’s understandable. But businesses have even more to fear if
they close their eyes to the vastness of the potential market or the opportunity
to make radical changes to their supply chains.

Ross Perot, when he was running for the US presidency in 1992, warned of the
“giant sucking sound” of US jobs going to Mexico. His protectionist, anti-trade
policies were wrong then. Any similar thoughts with regard to China are equally
wrong today.

Andrew Sawers, editor

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