Even now that its economy has started to cool down, with GDP growth expected to be around 7.6% this year China is arguably the most important growth engine in the world. But sentiment has largely turned against China as the bears take the lead in the long-running debate over whether or not China can avoid a hard crash. According to a new book on what drives the Chinese economy, both sides may be missing the point.
Understanding the most important trends in China
“Looking for stable growth (the optimist case) is ridiculous. Being concerned about volatility (the pessimist case) means you don’t really know what country you are in,” write Peking University business professors Jeffrey Towson and Jonathan Woetzel in The One Hour China Book. “China is experiencing regular booms and busts across its economy the same way a rocket ship experiences turbulence.”
The aim for this book, as the name implies, is simple. If Towson and Woetzel, well-known experts with decades of first-hand experience in China, had one hour to brief you on the most important factors driving the country’s development, here’s what they would tell you. It’s the 50,000-foot view of China that gets rid of the most common misconceptions (the manufacturing sector has more advantages than just low costs) and replaces them with the trends that are shaping the Chinese economy for better or worse.
“We are focused on mega-trends that fuel business activity. These are the big forces,” write Towson and Woetzel. “It doesn’t mean people won’t behave irrationally. It doesn’t mean things will work out well. In fact, you see bubbles, booms, and busts in every one of the mega trends.”
They argue that almost everything that’s happening in China can be understood in terms of six trends: urbanization, the scale of Chinese manufacturing, the growing middle class, the sheer amount of capital available, China’s boom in highly skilled workers, and the Chinese internet. For each of these trends, Towson and Woetzel give a brief explanation of what makes it so important, one or two stories that encapsulate how each trend has catapulted people and companies into wealth, and a final section of key takeaways.
The One Hour China Book packs a lot of insight into a slim book
Tackling such a complex subject in such little time is an ambitious project, but Towson and Woetzel (backed by a team of researchers who the authors profile for interested employers) deliver the goods. The One Hour China Book isn’t meant to be the last word on business in China; instead, it’s the first word – an ideal starting point for busy people who understand how important China is to the global economy, and want to be brought up to speed as quickly as possible. For most people, the intellectual return on time spent reading this book is almost unrivaled.