China’s role in globalization and how importers can benefit from the trend
Globalization won’t be complete today without mentioning the critical role that China played in making it happen. I like to think that all these may not have been possible if China hadn’t opened up its border for foreign direct investment in 1978. First, the internal realization that China had to ensure growth was incredible and the foundation for the exponential growth that has placed China on the world’s economic charts.
Despite the political and social challenges that plagued the country’s history, they determined to make things better by;
- Being open-minded to learning and foreign investment
- Being ready for change and disruption
- Clamping down on corruption.
These three key areas are what I consider to be the foundation for China’s growth over the decades. The commendable decision to open its border for FDI, gave China an opportunity to learn how it works in the west and also encourage local production. Today, many countries are offshoring in China as she is responsible for almost 28% of the world’s consumable products. This growth is largely because China has created more manufacturing facilities for both local and international investors to thrive. I also commend the strict regulatory policies in China especially the fact that the policies protects local citizens and their businesses. The policies are a great check and balance strategy to encourage investment and also protect local businesses at the same time.
Ready for the future
Although China has a culture of low uncertainty avoidance, it doesn’t mean that they don’t welcome change and plan for disruption. This is evident in the fact that China is actively involved in the big internet of things such as artificial intelligence, data facilitation, and robotics engineering. Many factories in China are only able to deliver on-demand because of the availability of automated production processes. Thanks to technology and the willingness to disruption and innovation.
Clampdown by Xi Jinping
The clampdown on corruption by Xi Jinping may also have contributed to the growth in China. There have also been instances where the president has been termed “the innovator” this couldn’t have been farfetched from the fact that his regime has reshaped some economic policies and reforms that may have been responsible for China’s growth in terms of local exports out of China and trade agreements and investments around the world.
Between 1985 and 2007, the world’s trade in goods grew roughly twice as fast as global GDP as multinational corporations built far-flung supply chains to serve developed markets by establishing new bases of production in emerging economies with lower-cost labor. As those nations rapidly urbanized and industrialized, they themselves became important new markets for commodities and consumer goods, bolstering global demand.
Today, China ranks seventh in MGI’s Global Connectedness Index, which ranks countries on inflows and outflows of goods, services, finance, people, and data. China stands out for its high level of connectedness relative to its income. This research also looks at where individual cities and provinces would fall in the global rankings alongside national economies. It finds that the booming coastal province of Guangdong would rank sixth globally in terms of goods flows, above the United States, while Shanghai and Beijing would top Japan and Italy in goods flows.(Woetzel et al., n.d.)
Many importers, particularly from Africa have been in business continuously because of China’s contribution to global low-scale manufacturing and product customization.
It is now more important than ever for China to bridge the gap between the world’s emerging and advanced economies.The nation has stepped up its engagement in regional and multilateral agreements and institutions, engaging more deeply with its neighbors in ASEAN as well as with other developing countries on issues such as finance, security, and trade.
Previous generations have undertaken development financing that involved wealthy nations giving prescriptions for market liberalization to poorer nations, with mixed outcomes to show for it. China can forge a new approach with greater credibility, better reflecting the agenda of emerging economies and acknowledging their divergent development paths. Its efforts may include expanding its role within existing international organizations as well as launching newinstitutions such as the Asian Infrastructure Bank.
Setting globalization trend
China also has an opportunity to reset its own relationships. Just as it is pursuing deeper engagement with Africa, there are opportunities for importers to leverage the change through investment, educational and cultural exchanges, and research collaborations.
Importers need to go beyond just importing finished goods and private label manufacturing. If Africa want’s to step up beyond being a second- hand economy, there is need for business owners to become creative and think beyond the box of just importing affordable goods or slamming their logos on products.
Beyond just importation business
Importers need to be at the forefront of advancing the economy and driving the change that is needed for Africa to take active role in globalization. Afterall, SMEs and MSMEs are the largest percentage of economic drivers in Africa.
1. Tapping Into AI Market For Local Economy
China’s rise in global economy was due to openness to FDI and also creating accessibility for products for both advanced and developing economies. Now, China is positioning their economy for even better growth with artificial intelligence. From schools to healthcare, supermarkets, automobile and consumer good production facilities, China is using AI for data integration and automated workflow.
Business owners and importers can partner with China to bring this technology to Africa. For instance, importers can work with Chinese robotics companies to supply security robots for companies in Africa. This would handle staff clock-ins, security surveillance and visitation of such facilities and data will be synchronized easily thereby reducing theft, and unwanted persons within the facility.
Importers can also introduce AI to schools for student monitoring and data analysis of student performance. Many schools in China are AI integrated and so far, the level of concentration of students are getting better.
In the healthcare industry, AI can be used for health diagnosis and surgeries. There are many opportunities that AI can create for the African industry. Importers and business owners can level up and tap into the future.
85% of Chinese companies are active players in the field of AI, leading all seven nations in the study. (Columbus, 2018)
2. Localizing Products for Internal Economy
For many years, Africa has been the dumping place for second-hand goods and sub-standard quality of goods. Importers should work with regulatory bodies to set standard of goods for the country and work with government to spearhead the importation of goods into the country. Local and typical production of goods can also improve the local economy. It’s high time local industries become major exporters of goods to advanced economies as well.
3. Liasing with Government for trade policies
China is currently working with developing countries for trade policies and treaties. China has ties to markets in Central Asia, Europe, and Africa that are home to almost two-thirds of the world’s population. The Chinese government is expected to facilitate more than $2 trillion in investment, including energy, port, road, and railway projects. If successful, this initiative would expand the world’s physical, financial, and business connections, drawing many underdeveloped regions more fully into global markets. Importers can work with government to make sure these policies favour local business owners and contribute more to the local economy.
4. Creating partnership for easy access for research and innovation
It is now more important than ever for importers to tap into the data analysis industry. Working in sync for research and innovation purposes would increase local intellectual capacity and open up new opportunities for collaboration and growth strategies for the local economy.
5. More Joint Ventures
If we want to drive growth in Africa, there is need for importers to step up beyond just buying goods from China. Now is the time for joint ventures and more foreign direct investment.
How Naiyuan Mart Comes In
Naiyuan Mart is exceptional, in that, we are registered in Hong Kong, Nigeria and Ghana. As it is, a specially dedicated team is permanently in China to make business easy for our customers.
With presence in mainland China, Naiyuan Mart helps business owners to get the best out of the Chinese supply chain and more importantly, they help business owners build rapport with these suppliers.
We have some of the biggest suppliers in major industries.
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