WHAT WE DO

Word4Asia specializes in assuring non-profit organizations achieve their purposes in China and Southeast Asia.

Too many well-intentioned organizations spend hundreds of thousands of dollars visiting, exploring, planning and meeting yet have little to report when asked "What are you actually doing in China?"

W4A Consulting International guarantees we can turn your good intentions into actions.

If we conclude we are unable to help you we'll tell you early in our relationship to save everyone time and money.

WHAT WE DO

Our Recent Trips

We spend a lot of time working and traveling in China.
Click here to see photos from our most recent trips.
Photo Gallery

Events & Activities

What have we been up to lately?
Click here for news on our current nonprofit initiatives.
Learn More

One Year After Covid-19, China’s Economy Continues to Grow.

by Sarai Fetty

Is There Trouble on the Horizon?

Over a year after the start of the global Covid-19 pandemic, the United States and China continue their competitive sparring for the spot of Earth’s largest economy.  Much has already been said about China’s incredible economic rebound in the final quarter of 2020.  This aim of this month’s blog is to provide a brief review of the industries in China’s economy that are leading the nation’s economic success.  At the same time, there are signs of a coming slow-down in China which will be briefly addressed.

Let’s begin the review by recognizing that China had a very strong first quarter in 2021; GDP rose versus same quarter a year ago by 18.3%.  Adjusting for the 2020 economic impact of the corona virus on China’s economy, this still means that China’s 1st quarter 2021 GDP is more than 12 percent ahead of the same quarter in 2019.  For another comparison point, consider that China’s average quarterly growth rate between 1989 and 2019 was 9.4 percent.  12 percent quarterly growth is a big deal.

China’s economic growth has historically come from three key areas:

  • Increasing affluence and market demands, especially among younger, urban consumers
  • A consistently positive balance of trade (although China has had to face increasing resistance to this over the last few years)
  • Government infrastructure investment 

A review of the leading Chinese industries, ranked by estimated percentage growth for 2021, reveals what will be required to continue growth.  Similar requirements will have to be achieved throughout China’s economy if growth at the Q1, 2021 level is to continue. 

Rank
Industry

Industry Revenue

(Billions)

Percent

Growth
Factors that Drive Future Growth
1
Passenger Rail Transport
$30.9
55.3%
  • Government investment in railways 
  • Robust demand for passenger railway transport  
  • Increases in operating scale
  • Improvements in structure and quality 
  • Increases in transport capacity 
  • Modernization of railway equipment
2
Internet Services
$803
18.5%
  • Significant increase in the number of internet users 
  • Pricing competition will slow industry revenue growth.
  • Growth will attract new industry competitors.  
  • Web portals will continue to play an important role in the industry. 
  • Leading competitors will expand to maintain market share.
3
E-Commerce
$1,800
18.5%
  • E-commerce companies continue to improve services
  • Internet penetration continues to increase
  • Customer sentiment is high 
4
Medical Device
$26.1
18.1%
  • Government healthcare policies and export incentives 
  • Exports
  • Continued increases in domestic demand driven by
  • Continued growth in affluence among certain demographics within China.
5
Toll Road Operations
$73.9
17.7%
  • Large government investment and demands for toll roads. 
  • China’s expressway network gradually being completed 
    • Personal demand for road use 
    • auto ownership increasing
    • Expanding tourism sector expands
  • Commercial road uses increasing 

Despite all of the good news, however, there are signs that China’s economy is beginning to slow. Several important KPIs (key performance indicators) follow:

Is the Chinese Economy Cooling Down?

Examples:

Consumer Price Index:  CPI rose to .9% in April, 2021 versus .4% in March.  Typically, rapid economic expansion can lead to price inflation, which, in the long run, can lead to an economic contraction if the decline in consumer demand results in higher unemployment.

Producer Price Index:  PPI in April, 2021 was 6.8 percent versus 4.4 percent.  Often, an increase in PPI is a precursor to increases in CPI, as wholesalers raise prices to cover manufacturer price increases.  

Balance of Trade:  Chinese imports increased by 43.1 percent in April 2021, versus the same period in 2020, and increased 13 percent over March, 2021 import values.  Obviously, increases in China’s imports. Represent GDP leakage out of the nation’s economy as well as having a significant impact on Chinese manufacturers.  A continuation of this trend could ultimately lead to a reduction in the size of the labor force.

The sources for our research are always listed below. Obviously, data errors will lead to inaccurate summarizing. Before you make decisions, we suggest doing your own due diligence.

Word4Asia occupies a unique niche in the world of consulting to organizations with their eye on China.  We continually keep ‘an eye’ on what is happening in this vital global economy and share our expertise with our clients.  If your plans include work in mainland China, we hope you’ll reach out to us.  We’d enjoy an opportunity to share our over twenty years of active involvement in this fascinating market and country and we’d love to be of service.  To start a conversation, please reach out to Dr. Gene Wood at gene@word4asia.com

All the best!

References:

https://fortune.com/2021/04/16/china-gdp-economy-2021-q1-recovery-losing-steam/

https://www.ibisworld.com/china/industry-trends/fastest-growing-industries/

Trackback from your site.

 

China is a Big Country

After 3 years hiatus due to Covid, I have been asked, “Well, what do you think?” “What are your takeaways?” “What’s the difference before and after Covid?”

Read More

 

International Consulting in China

On April 7th we met at the China Enterprise Confederation, which is listed as a consulting and training center in the Haidian District of Beijing.

Read More

 

Business Travel in China – UPDATE

By now all China watchers know the zero-covid policy in the PRC was lifted in January.

Read More

Word4AsiaWord4AsiaWord4Asia

Copyright © 2023 - Word4Asia