Information links outpace infrastructure
The mainland is poised to become the first country connected by telephones and computers before being fully linked by railways, roads and airports, a strategist says.
The mainland had the ability to develop information infrastructure faster than it could build physical infrastructure, Andersen Consulting's China Strategy Group director, Denis Simon, said.
Information technology was now the greatest force integrating the mainland.
'Information technology will do in China what the railways did in the United States in the 1860s,' Mr Simon said.
'Information architecture is being put in place faster than you see physical roads and airports put in place.' That would place the mainland's economy in the unusual position of generating tremendous growth opportunities just as lagging infrastructure prevented mainland businesses from taking advantage of new operations.
'It is important to remember that China is changing its entire ethos,' he said.
'The economy was purposely built from the 1960s and 1970s to mediate against east-west, north-south movement.' Mr Simon, who advises multinational and domestic mainland companies on strategic business planning, also said continued technology transfers by overseas investors meant the mainland enjoyed greater access to high-technology equipment than any developing nation previously.
'In terms of introduction of new technology, the gap between China and developed countries is small.' The mainland investment strategy of multinationals was undergoing transition. Overseas companies were becoming more discerning about where and with whom they placed money.
The ramifications were that the mainland now was more embedded in the larger global strategies of multinational companies.
However, for the mainland, a danger had been created by foreign companies co-operating with the best and strongest domestic market leaders, marginalising less capable mainland enterprises.
'What happens to a Chinese economy where foreign companies are aligned with the best Chinese enterprises?' he said.
'Who becomes the flag-bearer representing the Chinese economy?' Those were important questions for the Chinese economy, he said.
'If China is going to have the political support to [reform its economy], it needs the economic where-withal to present a credible competitive group of enterprises to the world economy.'