Politics, Politics And More Politics

Business, China, Company Strategy, Economics, Innnovation, Technology

Lewis

By John Richardson

CHINA’s extraordinary economic growth is, of course, largely the result of state-led investment in low-value manufacturing.

But, as we discussed in chapter 10 of our book, Boom, Gloom & The New Normal, China now needs a new growth model if it is to escape the middle-income trap, as defined by the West Indian economist Sir Arthur Lewis.

Can state-led investment deliver the goods again? When it comes to 3D printing technology – the new industrial revolution which we discussed yesterday – this  upbeat article in the 3D printing trade magazine, TCT, suggests that the answer will be yes.

“China is an early adopter of 3D printing, with decision-makers in Beijing pumping cash into 3D printing and additive manufacturing research and development since 1992,” wrote the magazine.

“Furthermore, there is well established 3D printing university courses training the next generation of industry leaders up and down the vast Asian superpower.”

One prediction was that revenues from China’s 3D printing industry would reach 10 billion Yuan ($1.6 billion, £1.05 billion) by 2016 compared with a global market of $3.7bn by 2015, added the same article.

But James Grubber, in the Asia Confidential article that we linked to in yesterday’s post, is with us. He warned that China, if it wanted to move up the value chain in all forms of higher-value manufacturing, had to address the following challenges:

• Government-owned companies which dominate much of manufacturing need to be privatised.

• Small entrepreneurs need greater incentives including grants and tax breaks in key areas.

• Better intellectual property rights protection is essential in order to give China’s entrepreneurs sufficient incentives to innovate at home, rather than overseas.

•Changes in education are needed to encourage innovation and creative thinking. Currently, high schools and universities in China put far too much emphasis on rote learning.

Can all of this happen without China, first of all, becoming a democracy? South Korea, one of the few countries to escape the middle-income trap, might have only done so because it got rid its military dictatorship in the 1980s.

At the moment in China, however, the emphasis is on economic reform without political reform.

These are very complex issues worthy of much more debate.

We continue to worry that, because of politics within some chemicals companies, these essential discussions might not be taking place.

PREVIOUS POST

3D Printing: The New Industrial Revolution

17/07/2013

By John Richardson MANUFACTURING via 3D printing could result in an industrial r...

Learn more
NEXT POST

Mainstream Catches Up

21/07/2013

By John Richardson Apologies to readers for the test blog post, by one of our co...

Learn more
More posts
China’s PP production growth could lead to big declines in 2020 imports
01/06/2020

By John Richardson PLEASE DON’T say I didn’t warn you. China is rapidly moving towards polypropy...

Read
Coronavirus, impact on the developing world and the scale of demand losses
29/05/2020

By John Richardson ALL OF us are struggling to come to terms with a collapse in the global economy t...

Read
Coronavirus, reshoring and the polyester industry: Good luck with that
27/05/2020

By John Richardson POLITICIANS, not just including the Populist variety, are talking a lot about res...

Read
Beware of the fragile nature of the oil and petrochemical price recovery
22/05/2020

By John Richardson RECENT rises in oil and petrochemicals prices should not in my view be taken as a...

Read
China petrochemical inventories build on what could be false hopes of a V-shaped rebound
19/05/2020

By John Richardson AS PETROCHEMICALS storage space in China fills up on the hope that the country ca...

Read
Further polyethylene rate cuts seem inevitable with no certainty on who will blink first
18/05/2020

By John Richardson IT IS NOT just a razor-like focus on petrochemicals demand that will get you thro...

Read
What petrochemical companies must do to adapt to a smaller coronavirus economy
15/05/2020

By John Richardson PETROCHEMICAL companies can adapt to the coronavirus New Normal by running their ...

Read
Coronavirus and the way forward: Forecasting micro surges in petrochemicals demand
11/05/2020

By John Richardson THE MONTH of May is normally a low season for toluene di-isocyanate (TDI) demand ...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more