By Li Zuojun, DRC

2016-11-8

The new economy refers to a new strategy or a new concept set out in this year’s government work report. Its connotations consist of new subjects, new industries, new products, new formats, new elements, new models, new ideas, new organizations, new systems, and new governance. New subjects refer to innovative enterprises and individuals while new industries include energy-saving and environmental protection, ecology, energy, culture, medical care, Internet finance, modern agriculture, new urbanization-related industries, some military industries, women and children industries, information and related industries, green manufacturing, and express and logistics industry. The transformation and upgrading of industry and enterprise products are aimed at realizing advanced industrial structure, industrial clustering, characterization, high-end industrial products, brand building, internationalized development, green and low-carbon development, IT application and smart technologies. The shift from the development of the primary industry to the secondary and tertiary industries in the form of tertiarization are in lockstep with the advancement and upgrading of industrial structure. With the continuous increase of costs relating to personnel, housing, intellectual property and logistics, China’s economy will witness a high-cost era. If enterprises want to make a profit, they have to reduce costs or raise the added value of products. China’s enterprises are facing the following challenges.

China’s economy has not yet bottomed out, the economic structural adjustment is experiencing throes, the convergence of old and new industries is not satisfactory, the demographic dividend is gradually diminishing, resource and environment constraints have become intensified, and the international environment has grown more complicated. These challenges require enterprises to have a global awareness and work in collaboration. With targeted goals and anticipatory plans, they should share out the work and cooperate with one another, and develop new products and services. It is suggested that enterprises should not only seize the new opportunities brought about by the upgrading of consumption structure, the new stage of urbanization, the regional economic integration and the comprehensive reform, but also formulate a unique development strategy while waiting for opportunities for further development in the course of depressed economic performance.

For more detailed information, please refer to here.