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China in 2015

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What could happen in China in 2015?

What do you get when you add slower economic growth, greater volatility, and rising competition to more international flights and genuine Chinese innovation? McKinsey director Gordon Orr’s annual predictions.

December 2014 | byGordon Orr

It seemed harder to prepare my “look ahead” this year. On reflection, I believe this is because political and economic leaders in China have clear plans and supporting policies that they are sticking to. You can debate the pace at which actions are being taken, but not really the direction in which the country is traveling. This means a number of the themes I highlighted for this year will remain relevant in 2015:

  • Improving productivity and efficiency will remain the key to maintaining profitability for many companies, given lower economic growth (overall and at a sector level) and the impact of producer price deflation on multiple sectors.
  • The impact of technology as it eliminates jobs in services and manufacturing will become even greater (but still not in government).
  • As a result, the government will keep a sharper focus on net job creation and the quality of those new positions. Companies will hire even more information technologists to keep up in the race to exploit technology better than their competitors.
  • The push to lower pollution, and now carbon emissions, will lead to even greater investment in domestic solar and wind farms, boosting the global position of Chinese producers.
  • High-speed-rail construction will continue domestically and increasingly abroad, as Chinese companies become the builder of choice for high-speed rail globally.

Beyond these, there are several additional themes that will be important in 2015. I describe them below.

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