Where are the best economic opportunities in the post-COVID world?
Editor's note: Andy Mok is a research fellow at the Center for China and Globalization. The article reflects the author's opinions, and not necessarily views of CGTN.
Adherents of Western ideology often engage in impressive cognitive contortions to twist and stretch facts to fit them into their distorted worldview. Blinded by their ideology, they overlook crucial opportunities and blunder into avoidable mistakes. They also often make grand and sweeping predictions that just as often turn out to be completely wrong.
For example, at the beginning of the COVID-19 pandemic, The Atlantic published an article titled "Democracies are Better at Fighting Outbreaks." In it, the author claims that only democracies possess public trust and without this trust, public health crises cannot be effectively addressed. This article was only one of many to express this view. But recent history has shown that the opposite is true. In fact, China has done the best job of stopping the pandemic and of implementing sustainable and scalable procedures for resuming social and economic activity in the face of an unprecedented challenge.
Similarly, even in the face of compelling evidence to the contrary, many believe that an "authoritarian" society cannot be technologically innovative or artistically creative. The truth is that systems with a strong and competent government dedicated to delivering and maintaining societal stability, harmony and prosperity are the ones most capable of meaningful advances in both the arts and sciences. Those that cannot see this clearly will miss important opportunities, especially those arising in the post-COVID-19 world.
When it comes to China, central government policy decisions and priorities are a good place to start to identify the most promising future opportunities. For example, China's actions during the great financial crisis not only insulated China but played a key role in staving off even greater distress globally. Those that understood this benefited. But this crisis is different because an effective policy response requires not just decisive action by the Chinese government but also the active participation of China's technology companies. As a result, some of the most exciting opportunities will emerge in China's private sector, especially in the technology sector.
One major initiative is China's "new infrastructure' plan which calls for investment totaling 10 trillion to 17.5 trillion yuan between now and 2025. These investments range from information infrastructure such as 5G telecommunication networks, big data and intelligent computing centers, AI and the industrial internet to integration infrastructure that integrates next-generation technologies across traditional industries, including smart transportation and smart energy infrastructure like EV charging stations.
A view of the skyline of Beijing. /VCG
A view of the skyline of Beijing. /VCG
Another major initiative is the rollout of China's digital currency which is referred to DC/EP (Digital Currency Electronic Payment). While this may seem very esoteric, it has the potential to reshape the global payment systems and create vast new opportunities by reducing the cost of cross-border payments and otherwise simplifying the large but largely invisible world of global payment settlement systems. Like with any new and disruptive technology, early adopters can reap extraordinary gains.
China's biggest advantage is its strong and competent government. But it would be incomplete to only look at central government policies and actions. Local governments also play a crucial role in the implementation of new policies such as the new infrastructure plan and the launch of DC/EP with even certain districts (the governmental unit below that of a city) being of vital importance.
Chaoyang District in Beijing is a good example of this. With a population of 3.5 million and GDP of almost 100 billion U.S. dollars (bigger than Kenya's, Sri Lanka's or Guatemala's), Chaoyang is also home to almost 200 of the Fortune 500 and 165 of the 167 foreign embassies in Beijing. With almost 200,000 foreigners (South Korea, the U.S. and Japan with the most), it is also one of the most international places in China.
Chaoyang District has also been at the forefront of supporting entrepreneurship and innovation in China. For example, eight years ago it launched a major startup platform called OTEC (The Overseas Technology and Entrepreneurship Conference) that recruited entrepreneurs from around the world by offering cash grants to fund development as well as other crucial support services including facilitating investments by leading venture capital funds. Since the first OTEC, more than 20,000 entrepreneurs have participated with 2.7 billion U.S. dollars of capital raised. This year, the program, which has been enhanced and re-branded as Global Innovation Week, will also offer support to creative professionals such as writers, painters, movie makers and those engaged in other types of creative activities as well.
As we move into the post-COVID-19 world and a world still awash in liquidity, many are looking for the most promising investment and business opportunities. China's economy has been the sole bright spot that will shine even more brightly as time goes on. Moreover, major national initiatives such as the new infrastructure plan and DC/EP may transform the world of business and finance. Those who are not blinded by ideology may be the biggest beneficiaries. Finally, China's unique strength is that its government, including local and even district governments, plays a critical role. Districts like Chaoyang in Beijing may be the launchpad for some of the most exciting opportunities arising from these key national initiatives.
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