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McKinsey: 10 Things to Expect From the Chinese Economy in 2014

Building infrastructure and more CIOs are in China's 2014 agenda


2014 is a big year for the growing Chinese economy in several fronts including the job market and the country’s infrastructure.

Chinese economy
Source: Flickr

International Business Times reports that McKinsey made several predictions for the world’s second-largest economy in 2014 that includes more CIOs to help fulfill China’s technology goals. Here are 10 things to expect from the Chinese economy in 2014.

  • Productivity Growth and Technological Disruption  China will look to control rising costs in labor, land and capital in order to ensure higher productivity. The country will also focus on disruptive technologies including online banking and other ways to use the Internet effectively in China.
  • Chief Information Officers, or CIOsIn order to fulfill its technology goals, Chinese companies will have to hire qualified CIOs.
  • Jobs Over GrowthThe Chinese economy has been growing at an impressive pace but the country needs to create more jobs in order to ensure higher productivity.
  • Mergers and AcquisitionsA focus on mergers and acquisitions will be essential to the Chinese economy in 2014. “Private and foreign participation is increasingly encouraged in many parts of the [logistics] sector, and its competitive intensity is likely to rise,” says McKinsey director Gordon Orr.
  • Buildings InfrastructureMany commercial and residential structures are decaying despite China’s architectural prowess. Orr believes that the government needs to focus on rebuilding certain cities with terrible infrastructure.
  • High-Speed Rail – China will focus on increasing the capacity in popular lines of its high-speed rail over adding new lines in 2014.
  • Solar Power IndustryThe solar power industry will be essential to the Chinese economy thanks to growing domestic demand. This demand can be partially attributed to the Fukushima nuclear power plant disaster in Japan.
  • Brick and MortarMany brick and mortar retailers are expected to go out of business due to the rise of online retailer.
  • Free Trade Zones – There are questions surrounding the future of China (Shanghai) Pilot Free Trade Zone. Orr says that Shanghai might ease Free Trade Zone limitations but he believes it’s unlikely to happen.
  • European Soccer in China – Rupert Murdoch invested in the Indian football league, and Manchester City’s Qatari investors injected cash into a new football franchise in New York City. Why can’t the same happen to the Chinese Super League in China from Chinese administrators?

Read more about McKinsey’s predictions here.

Article printed from InvestorPlace Media,

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