May 24, 2017 (New York City, The New York Public Library) – The Peking University Guanghua New York Forum attracted more than 200 industry leaders, prominent academics and innovators to discuss this year’s theme, “China Outlook."
The Forum is an annual event that reimagines China's business and economic landscape. In its fourth year, this year's theme provided a look at the road ahead for China.
Peking University, Guanghua School of Management’s Dean Prof. Qiao LIU expressed the importance of continuing the Forum’s tradition. The Forum, Prof. LIU said, “is a very specific and unique opportunity for us to gather together outside of China. The School aims for the forum to serve as a platform where we can exchange ideas about China and thus give better insights.”
Carolyn Brehm, Vice-President of Global Government Relations and Public Policy at Procter & Gamble, echoed this sentiment in her welcome remarks saying that forums, such as these, help companies navigate China’s changing environment.
The forum itself was organized into three themes: (1) Global Economy: China, US & the World, (2) Corporate China 2.0: The Great Shakeup and (3) Attracting China's Middle Class Consumer. For each session, the forum featured an impressive line-up of speakers from think tanks to consumer giants.
During the Global Economy theme, the panel revisited the recent upheaval in the world economy- from Brexit and the US presidential election to the impeachment of Brazil’s president. As Joseph Lake, Director of Global Forecasting for The Economist Intelligence Unit, put it, “we are now living in the age of anxiety, featured by great uncertainty and turbulence, including Brexit, Trump-induced division and the constant risk of the North Korean state.”
Despite this context, the China-United States economic and business relationship received an overwhelming positive outlook from the panelists. David Dollar, a Senior Fellow at the Brookings Institution, John L. Thornton China Center, mentioned the difference between rhetoric and substance when it comes to the China-U.S. relationship. Dollar illustrated this perfectly, saying, “Trump seemed to be anti-China before and during the election, but after the election he did a 180.”
The Mar-a-Lago China Summit, which occurred this past April, also signaled a positive outlook for collaboration between the two countries moving forward. In fact, Hongbin CAI, Professor of Applied Economics at Guanghua, said, “the Trump-Xi meeting was a success in the sense that it resolved some early anxiety between the two countries.”
Simon JIN, President of Greater China at S&P Global, further discussed the positive results of that meeting mentioning positive moves that resulted, such as the softening of some of China’s financial regulations. Starting in July 16th, JIN mentioned that US financial institutions will be able to provide increased services in China.
However, the panelists conceded that a truly, free bilateral trade agreement for the two countries would not occur in the foreseeable future.
During Corporate China 2.0 theme, Prof. Qiao LIU analyzed China's economic success and explored why great firms are vital for its future. He maintained that Chinese firms must pursue greatness in order to transform the Chinese economy. “Institutional changes should occur to promote entrepreneurship and foster great firms,” he argued. Prof. LIU also insisted that the key is Return of investment capital (ROIC). Increased ROIC, he pointed out, is vital for China’s economy and will drive its growth.
While Prof. LIU recognizes that driving China’s next phase of growth is no easy task, he remains confident. “China can continue strong growth for another 10 or 20 years, but reform of the micro foundation is needed.” The emergence of “Made in China,” increased ROIC, and reforms that foster entrepreneurship and great firms will be a vital part of driving that growth.
The last theme, Attracting China's Middle Class Consumer, was a panel discussion on the rise of the Chinese consumer. The emergence of a prosperous class of Chinese consumers creates unique opportunities for multinationals. More than three-fourths of China's urban households will approach middle-class status by 2020 and their consumer habits and trends will create winners and losers in the domestic and global marketplace.
As Ying ZHANG, Professor of Marketing and Behavioral Science at Guanghua, put it, “With over 600 million middle-class consumers in the next several years, the Chinese middle-class cannot be ignored.”
Caroline Brehm explained further, “China has unprecedented economic growth and a competitive market,” yet she noted that, “the biggest difference between American middle class customers and the Chinese ones is how quickly Chinese customers change.” Patricia Graue, Director of Brunswick Group agreed, stating that all sectors in China will undergo dramatic changes in the next several years.
Jeffrey Towson, Professor of Investment at Guanghua, also pointed out that the Chinese consumer is complicated because of their changing tastes. “The pace of how consumer tastes changes is astonishing and they are shaping the world,” he said.
In short, to win in the China market, firms need to understand Chinese consumers at the local level and continually fight for dominance in the market. Anything short of that will lead to failure.
Stephen Orlins, President of the National Committee on United States-China Relations, delivered the Closing Remarkets, with these words “the change in China since my first visit in 1979 has been so enormous, great and unpredictable. If I think back of my career, and I think back of the defeats, I realize that the defeats have opened up more doors than the victories.”
About the Peking University, Guanghua School of Management
The Peking University Guanghua New York Forum is an annual event that explores the future of the business and economic landscape of China, as well as its relationship with the United States. The forum brings together over 200 business leaders, innovators and scholars from China and the United States to discuss, debate and exchange ideas on China’s road ahead.
This year’s forum was made possible due to the generous donations of our sponsor, Jyah Asset Management, and held in partnership with the US China Business Council.
Full list of speakers:
Qiao LIU, Dean, Professor of Finance, Guanghua School of Management, Peking University
Carolyn Brehm, US-China Business Council Representative
Panel 1: Global Economy: China, US & the World
Moderator: Joseph Lake, Director of Global Forecasting, The Economist Intelligence Unit
Hongbin CAI, Professor of Applied Economics, Guanghua School of Management, Peking University
David Dollar, Senior Fellow, Brookings Institution, John L. Thornton China Center
Simon JIN, President of Greater China, S&P Global
Presentation: Corporate China 2.0: The Great Shakeup with Guanghua Dean Qiao Liu
Panel 2: Attracting China's Middle Class Consumer
Moderator: Ying ZHANG, Professor of Marketing and Behavioral Science, Guanghua School of Management, Peking University
Carolyn Brehm, Vice President for Global Government Relations and Public Policy, Procter & Gamble
Patricia Graue, Director, Brunswick Group
Jeffrey Towson, Professor of Investment, Guanghua School of Management, Peking University
Stephen Orlins, President, National Committee on United States-China Relations
About Peking University, Guanghua School of Management
"To advance management knowledge and develop business leaders for China and the Global Society."
-Mission Statement of Peking University, Guanghua School of Management
Peking University, Guanghua School of Management is a leading business school in the Asia-Pacific renowned for its China-expertise and international perspective. Guanghua offers a comprehensive business education with programs including, undergraduate, graduate, doctoral, MBA, Executive MBA and executive education programs. Guanghua has a global network of over 30,000 alumni working across industries for leading domestic and multinational corporations. It also has over 100 partner institutions across the globe. In addition to its main campus in Beijing, Guanghua has campuses in Shanghai, Shenzhen, Xi'an and Chengdu and is actively engaged in policy making and economic development in China.