Contradictions rife in agile economy
China is a country of complexities. When it comes to doing business on the mainland, the editors of China into the Future: Making Sense of the World's Most Dynamic Economy agree that the country is 'fraught with internal contradictions that make it immensely challenging'.
Ever mindful that crystal balls do not exist, W. John Hoffman and Michael Enright have compiled eight essays that try to unravel key issues, forces and uncertainties that should help prepare business leaders for China's next 10 years. By identifying key benchmarks that readers can track as events occur, the goal is to help business people, analysts, investors and policymakers chart their own strategies.
The contributors - academics, analysts, consultants and other professionals in banking, politics and business - draw on their own research and vast experience working at the highest levels within the country.
For example, delving into the mainland's new banking system, managing director and chief economist for Asia at UBS, Jonathan Anderson says: 'We can't think of a single topic that raises more questions, misconceptions and debate than the state of the Chinese banking system.' He offers the 'salient issues' affecting the future.
He talks us through a banking turnaround - from the previous 'basket case' to a renaissance in popularity that began in 2005 with the initial recapitalisation and subsequent public listing of large state-owned institutions.
He concludes the 'bad old days' of massive resource misallocation and flagrant disregard for economic realities are over. Yet, he says that foreign entry is a red herring unlikely to change domestic banks and that the liberalisation of the financial system leaves 'the medium-term outlook for the commercial banking system in question'.
The editors, Mr Hoffman, co-founder of the Exceptional Resources Group and of the China Dialogues Network, and Mr Enright, Sun Hung Kai professor at the University of Hong Kong, hold credentials to instil confidence in critics who might write this off as just another book about China.
What sets this book apart from others are the eight scenarios presented in the final chapter. Mr Enright and Robert Broadfoot, director of Political and Economic Risk Consultancy, analyse the salient features in the preceding chapters and place them in frameworks, each of which has its own unique trajectory that can be tracked as China develops in the next 10 years.
'Greater awareness of an event's significance in terms of pushing China in a particular direction should improve the speed and ability of an organisation's reaction to that event,' write Mr Hoffman and Mr Broadfoot. The book provides compelling reading for those struggling to organise their thoughts about the future of a massive country that, the editors agree, will not develop in a linear fashion.
Elizabeth Horscroft is a Hong Kong-based journalist