Strategic focus defines China

William Burns CIA Director was sharp when he said: “China is the only country with both the intent to re-shape international order and increasingly the economic, diplomatic, military and technological power to do so.” Here comes the reasoning:

1. US has geostrategic overreach where the marginal utility moves on southerly direction. China, on the other hand has geoeconomics overreach where marginal utility moves on northerly direction.

2. US drives largest part of foreign income from service sector that employs fewer people while China drives largest forex from manufacturing sector employing more people.

3. Manufacturing products coming out of America has overall medium to high quality whereas China adopts two-pronged quality dimension with high quality for the domestic market, priced high too and medium to low quality for exported products done deliberately so that America is not affected in total sales. Yet the bugbear is Chinese goods are a lot cheaper than US products.

4. Orientation of US industries tend to favour the market, shareholders and  highly paid executives thereby neglecting suppliers, staff and  people at large. China concentrates upon the stakeholders within and without. Moreover, middle class in USA numbers about 65 million people whereas China has almost ten times that number.

5. As regards to product portfolio for exports both countries use dual matrix of military and civilian uses. In the case of US products intended for civilian use has technology at the lower realm and military related products at the higher spectrum. On the contrary, China employs high-tech for civilian use sold within China while price quoted for exported items for both civilian and limitary uses is purposely kept at the fraction of the price quoted by US exporters.

6. American companies shifted their entire plants to China for using Chinese cheap labour while China invests in high-tech industries abroad especially in America led west gaining a foothold in the market and enhancing techno savviness.

7. Overall growth and benefits accrued via economic progress that is frittered into the general public is estimated to be around 10% of the population in United States while this figure in the case of China is about 30% and still ticking!

In sum, business strategy of the state and the private sector in China takes into considerations of the domestic economy as well as geoeconomics equally. No wonder Nicholas Burns had the gumption to say that China has the ability to usher in the new international order!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist