China's businesses move forward
HLB Survey of Business Leaders 2021 - China outlook
Penchant for pandemic-prompted growth
The first to enter and the first to emerge from the worst of the pandemic, China had a ‘headroom’ for an economic rebound. Though timing isn’t the only crucial factor making China’s leaders more optimistic about their business growth prospects and normalisation of economic activity. High infrastructure readiness, digital maturity, timely government support among other factors put local leaders at a better starting position within the new growth cycle as we found in our survey.
Despite a strong focus on tech-led and growth-oriented initiatives, China-based businesses also recognise that a well-rounded workforce will be crucial to driving innovation in the long-term. Key social imperatives around the diversity and well-being of talent received a high priority on this year’s agenda. Not to mention the local leader’s growing commitment to becoming the world-leading low-carbon and high-growth economy.
Only 62% of China’s leaders are wary of the economic uncertainty. The local government’s capable and timely management of the pandemic bolstered trust in its ability to steer the country out of the crisis and also led to a faster resumption of economic activities. While the global markets remain in turmoil, China’s domestic market escaped the worst of the contraction cycle and still showed positive growth (albeit the lowest since the 1980s).
The favourable local conditions have prompted China’s leaders to exit the “survival” mode and prioritise growth-fuelling strategies. 53% of leaders we spoke to put plans for launching new products and services this year and are twice more likely to be focused on raising their customer acumen when compared to global respondents. Yet, local leaders still focus on resourcefulness, rather than bullish growth at any cost. For 60% higher operational effectiveness remain a top priority and 46% also seek ways to reduce operational costs.
Prior to the pandemic, China’s leaders already had access to leading-edge technology infrastructure. A high-level of technical maturity was advantageous for businesses as the rapid transition to digital operations began. China’s hyper-connected consumer society and the workforce rapidly eased into new ways of working, shopping, and receiving entertainment, effectively challenging businesses to propose an even wider portfolio of digital products and services. So it follows that 49% of China’s leaders plan to improve their innovation abilities in the next 12 months and bring new offerings to the market.
A properly-executed combination of AI, IoT, and 5G — the main tech-enablers executives named — can spur China’s leadership in emerging sectors such as the autonomous vehicle market, unattended retail, industrial robotization, and “green” transportation among others. Technical excellence, paired with effective execution, also make local leaders overwhelmingly confident in their ability to overcome cross-border challenges with the help of technology.
A “fit” workforce is critical to capitalising on the emerging, tech-enabled business opportunities. China leaders acknowledge the importance of hiring, nurturing, and retaining the best minds. For 91%, staff physical and mental wellbeing is a top priority and 95% of executives agreed that diversity is a growing area of importance for their business. While local leaders are not as likely to take advantage of remote work as a facilitator for sourcing diverse talent, they are more committed than their global peers to seek out strategic partnership opportunities and collaborate with entrepreneurs.
Purpose-led initiatives, aimed at bolstering China’s position as a leader in renewable energy, biofuel, and biotech production, are in mainstream focus as well. Evoked by the government’s pledge to achieve carbon neutrality by 2060 and supporting actions, promoting “greener” transformations, 89% of local leaders see the economic recovery process as an opportunity to reposition their business for profiting in the low-carbon economy and actively seek ways to commercialise emerging green-growth opportunities.