Will economic growth make or break China?

Whether we’re talking about a family, business or country, significant growth inevitably causes a ripple effect of change and requires careful management to keep the proverbial engines running smoothly. As we’ve seen with Google and Apple, properly managed growth can elevate a business to empire status.

Within a decade, China will have the world’s largest economy. As its economy grows, cultural, labor and migration trends are shifting. Can China maintain a sustainable, healthy business community with existing, limiting government regulation? My guess is no. Will the Chinese government continue to reevaluate its traditional ideals and adjust regulation to nurture its version of the industrial revolution? I hope so.

On the verge of a major cultural shift.

American’s idea of the pursuit of happiness is not traditionally shared in China. Traditional Chinese believe that a constant pursuit of happiness is ever-elusive; instead, one should find a way to be happy within existing circumstances. This “Chinese dream” is evolving to resemble the “American dream” as citizens increasingly strive to improve their quality of life. Young adults are increasingly going to college instead of working in factories and an emerging middle class works towards home ownership and material wealth.

China’s gradual cultural shift from collectivistic to individualistic is incongruent with its authoritarian government system. For example, many rural residents aspire to become urban residents, yet the government’s Hukou household registration system limits rural-to-urban migration. Some policies have already been adjusted to accommodate changing circumstances – for example, the single-child law now dictates that a parent without siblings may have two children – but continuous reform is needed to keep up with cultural and economic change.

Is China’s evolution good for everyone?

There is much debate about how Chinese economic growth and reforms will impact the world stage and U.S. business. In their book In Line Behind a Billion People, global economy experts Damien Ma and Bill Adams explain how an evolving China will complement U.S. business. If they are correct in assuming that China’s properly managed growth will benefit America and the rest of the world, perhaps we should all take an interest in China’s success.

Thoughts??

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