“China in Transition: New Leadership, New Prospects” was the topic of the APEC China CEO Forum 2013, which took place in Beijing from July 12-14.
It represented a platform to discuss issues such as how to move China from “Quantity Qrowth” to “Quality Growth”, how to make the “Green Leap Forward”, how China’s economy will perform in the next years, and what the Internet era will hold for the business world in the future.
The forum hosted many renowned speakers, among others:
- Zhang Baowen, Vice Chairman, Standing Committee of the National People’s Congress
- Richard C. Koo, Chief Economist, Nomura Research Institute
- Dr. Kai-fu Lee, Chairman & CEO, Innovation Works
- V. Paul Lee, ABAC Representative of Canada, Managing Partner, Vanedge Capital Partners Ltd
- Jing Ulrich, Managing Director and Chairwoman, Global Markets, China, J.P. Morgan
A hot topic of debate was Innovation in China.
For instance, Richard Koo explained that if one can make a lot of money without innovating, one will not innovate and that China is now going through the same process as Japan did some three decades ago.
He also expressed his concern with regards to China’s education system, saying that students in the USA get an “A” for challenging the teacher and that this does not seem to be the case in China at all.
Another highly contentious question was:
“Future technological innovation will mainly come from the East rather than the West: Agree or Disagree?”
Kai-fu Lee opened the dialogue by saying that today, visionaries like Steve Jobs are less needed. Through the Internet companies can develop a new product to respond to the needs of a small user group. By exposing the product to this group, they can learn from the feedback and experience whilst improving the product.
Paul Lee entered the discussion by championing why he thinks that in the next twenty years, innovations will mainly come from the West rather than the East/China:
- The West teaches you how to think, the East how to learn.
- The legal system of the East, and China in particular, inhibits innovation.
- The financial system in the East is not well-developed enough to provide innovators with capital.
- The West exhibits a society based on meritocracy, the East based on paternalism.
- The availability and transparency of information in the East is limited.
- For the East's leadership it is easier to copy and “stick with what works” rather than setting sail for new grounds.
The friendly exchange of blows began when Kai-fu Lee argued why the East/China has at least a chance at being more innovative than the West:
- There is a strong information asymmetry; Chinese entrepreneurs know what is happening in the US, particularly in Silicon Valley, but vice versa this is not the case, yielding a great potential.
- Chinese innovators are more hard-working than their Western counterparts.
- China has a stronger focus on efficiency; products are developed faster than in the West (e.g. Tencent’s products).
- China represents a larger homogeneous market than the West.
- The competition in China is a lot fiercer, which gives rise to superior business models (compare WeChat to WhatsApp or Taobao to eBay).
Paul Lee stated that he agrees with all of Kai-fu Lee’s points. However, he argued that notwithstanding, it will take much more time for the latter six points to make a difference, because the West and the East are not on a level playing field.
Undoubtedly, the complexity of the issue is high, and there are many factors that could lastingly influence the dynamics. There are exciting times ahead.