Promise, potential, performance

Edward Tse, chairman emeritus, Greater China, of consultants Booz & Co. Geng Feifei / China Daily

Edward Tse, chairman emeritus, Greater China, of international management consultants Booz & Co, who is shortly to launch his own new consultancy, Gao Feng Advisory, believes Fenby underestimates the transformation now taking place in the Chinese economy.

He agrees the private sector has been held back by the dominance of the state-owed industries but that the story of the next few decades will be the unleashing of China's entrepreneurs on the global stage.

"That the Chinese economy is dominated by SOEs and the government plays a heavy role in industry is true but I think the future will be different. I think that will belong to Chinese entrepreneurs. I think that is something that people in the West underestimate and under-appreciate."

Tse, also author of The China Challenge: Harnessing the Power of the World's Fastest-Growing Economy, describes the recognition of the importance of market forces at the Third Plenum of the 18th Central Committee of the Communist Party of China in November as "monumental" and believes the next decade will see major outward investment such as Shuanghui International's recent $4.7 billion (3.4 billion euros) acquisition of Smithfield Foods in the US.

"We are going to see more and more Chinese companies looking to build their own capability and address their problems of lack of innovation or skills by making acquisitions," he says.

Paul Cheng, the Hong Kong entrepreneur and politician and author of On Equal Terms: Redefining China's Relationship with America and the West, says there is now clear evidence that China is beginning to build a stronger technology base with many scientists returning from Europe and the United States.

"You read all the time of well known Chinese people in science and technology returning to their roots from the West. Many used to go and study there and not return but they are now attracted by higher salaries and the quality of life," he says.

"Apart from the pollution in the major cities - which, of course is an issue - people can enjoy a nice lifestyle in China now. This often gets forgotten in a lot of the criticisms you get."

In terms of foreign policy, Hugh White, author of The China Choice: Why We Should Share Power, one of last year's critically acclaimed China books, says China's rise will change the dynamics.

"There is not much doubt that China will quite soon displace America as the world's richest country, and eventually, on some measures at least, the strongest. But that does not mean the 21st century will be the 'Chinese Century' in the way the 20th century has been the 'American Century'," he says.