Participants at this week’s central economic work conference will discuss ways to stimulate Northeast China’s flagging economy.
The medical device market in China is huge. The strong demand is driven by the country’s aging population and the growth in the number of sophisticated consumers who are looking for better healthcare. But for domestic companies that want to survive in a market that is dominated by foreign brands, they must keep investing.
“Our foreign competitors established themselves a century ago. If we want to climb to the top of the food chain, we must reinvest what we earned into research and development,” said Xu Bing, director, R&D Department, Dirui Medical Equipment Company.
During the first three quarters of this year, Jilin province’s GDP growth rate outperformed the national average, becoming the first northeast province to do so. Known as auto-city, Changchun’s private auto-parts companies have made remarkable contributions.
“The auto-parts companies here are no longer small manual workshops. Like us, from making auto-logos for foreign companies to professional automotive design, we’ve never stopped investing in human resource development,” said Han Xue, vice director, Lintian Yuanda Auto Parts Co.
More than 70 percent of the investments made in Jilin province this year have come from the private sector, thanks in part to the improved business environment of streamlining administrative procedures and strengthening governmental services. And although times are tough, commercial property developers believe it is a great time to invest.
Transforming this region, a former centrally planned economy, which many believe has little culture of entrepreneurship, is not an easy task. During this process, private capital plays an important role, because private investments are not planned by policymakers, but carried out based on real market demands.
“We don’t expect a quick payback: we offer three-year rent of the shops for free just to attract small businesses. And when the popularity of the shopping district grows, the overall value of the project will increase,” said Yu Xiao, manager of Bachu Shopping District.
Boosting private investment is one way to revive a stagnant economy. But more efforts need to be made to lower the costs, and to introduce progressive fiscal and monetary policies to support this kind of investment.