China's resurgence - the 'normal new'

PRESIDENT Xi Jinping emphasised at the Boao Forum in March that China was changing and its headlong growth was slowing; its older characteristics were weakening, so more structural reforms were needed.

Some might have felt this to be negative, but we think it is a positive view. He focused mainly on the economy and the environment, and on the former noted that the GDP forecast of 7 per cent was in line with the "new normal" - by which he may be suggesting his nation might be becoming "developed" and so would have lower annual growth. After all, across Europe's real GDP growth is low (in the UK it's 2.5 per cent) and in the US it's 2.4 per cent - far below China's level. Mr Xi's message is a subtle way of transforming Premier Li Keqiang's key phrase of "new normal" which subtly would become the "normal new" viewpoint - which we think is so positive but also different from the past. All must learn this and strive for the future.

President Xi's views will have consequences for the rest of the world and for the shaping of global trade, if not local economies and how they are made up. Previously strong consumer nations of China's exports would have to re-establish their own manufacturing capability, lifting their total factor productivity by investing in new capital stock. In China we now find an increasing movement from state-owned to the private sectors, from real estate to production; and these firms are opening up interior cities to new ventures, thus spreading new wealth. One of us recently met about 10 high-level CEOs of very large Chinese companies in different sectors. In general, they projected China in a positive way.