Corporate Strategies for a Slowing China, Part 1

Time to prepare for a slower-growing China
Ford Motor Company dealership in Beijing Photograph by Nelson Ching/Bloomberg

Global chief executive officers should stop praying for a miracle in China. As the investment- and export-driven boom of the last 15 years comes to an end, the days of double-digit annual growth in gross domestic product are over. Depending on the pace and nature of economic and institutional reforms, the new normal for GDP growth will be somewhere in the 6 percent to 7 percent range. For an economy of China’s size, this will still be very robust and will make China the world’s largest economy by 2025. For companies, however, a China that is growing at 6 percent to 7 percent will be very different from one that’s been growing at a 10 percent to 11 percent rate.

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