Economic Watch: China "powering ahead" in key sectors -- leading management institute-Xinhua

Economic Watch: China "powering ahead" in key sectors -- leading management institute

Source: Xinhua

Editor: huaxia

2024-05-24 13:28:15

GENEVA, May 24 (Xinhua) -- The "2024 Future Readiness Indicator" report by the International Institute for Management Development (IMD) showed that China is powering ahead in key industries.

"The competitiveness across all three sectors is heating up," Howard Yu, director of the Switzerland-based IMD Center for Future Readiness, told Xinhua on the sidelines of the report's launch.

The report ranks 88 of the world's largest finance, automotive and consumer packaged goods companies in terms of their resilience.

In financial services, it showed that Mastercard, Visa, DBS and JPMorgan continue to stay ahead of competitors through partnerships, acquisitions, and that there is an increased focus on internal innovation.

Meanwhile, in the automotive sector, Tesla holds onto the lead in electric vehicle (EV) auto ranking, but its uncontested leadership is being challenged on multiple fronts.

China's electric vehicle maker BYD makes noteworthy progress as Chinese manufacturers' progress signals serious competition to established automakers, said the report.

"From a Chinese perspective, auto is definitely a huge winner. Since 2022, Chinese automakers have really been ramping up their future readiness compared to other traditional car plays such as BMW, Mercedes-Benz or Toyota," Yu said.

"A company like BYD keeps improving its business performance both in the short term as well as in the long run. We see a lot of meaningful innovation coming out from China in this sector," he said.

Other Chinese automakers, including Geely, NIO, and Li Auto, all command a significant price advantage over Western competitors, Yu said.

In consumer packaged goods, L'Oreal pulled ahead of industry titans Coca-Cola, P&G and Nestle by embracing technological innovation at an unprecedented scale to meet the demands of the modern consumer, the report said.

"In consumer packaged goods, whether it's personalization, omnichannel or experiential shopping, China again leads the way. Chinese consumers are very demanding. Whether it's Coca-Cola, Procter & Gamble or L'Oreal, the way they think about the Chinese market is extraordinary," Yu said.

"Goods and business models are basically invented in China before the rest of the world. Many are coming out from China because e-commerce is so much more advanced than in other markets," he added.

The scholar said that the innovations of Chinese companies are now going global.

"It's very interesting to see the type of innovation that domestic companies are able to embrace and scale. These innovations do not just stay in China, but they now spread across borders and go international. I think it's imperative for Chinese companies to go global," he said.

To thrive, companies must prioritize technological innovation, cater to the personalized experiences consumers crave, and remain adaptable, the report concluded.

To measure future readiness, IMD assessed the financial performance of organizations, their investment in growth and innovation, leadership and organizational culture, operational efficiency, as well as the market position and competitive dynamics.

IMD is a renowned business school with campuses in Lausanne, Switzerland, and Singapore. It has an in-country team in Shenzhen, China.