Six McKinsey Predictions For China In 2011

Gordon Orr, a director in the Shanghai office of McKinsey, a firm of management consultants, makes six predictions for China in 2011.

  1. Inflation in food prices will take longer than expected to control.
  2. Middle-class bankruptcies will expand dramatically.
  3. Minimum wages will rise, but productivity gains will outstrip labor costs.
  4. China’s economic growth will be lower than expected.
  5. China will step up its “invest out” program in the new five-year plan.
  6. The state will again try to reduce its ownership role in business.

This Bystander likes (in the sense of agrees with) 1, 3 and 5 (though this one is a bit of a cheat for 2011), but is less convinced by 2, 4 and 6. The short-term social disharmony they imply wouldn’t be tolerated in what is looking to be a critical and not always easy year for China’s development. What do you think?

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4 Comments

Filed under Economy

4 responses to “Six McKinsey Predictions For China In 2011

  1. Pingback: Tweets that mention Six McKinsey Predictions For China in 2011 | China Bystander -- Topsy.com

  2. The studies of McKinsey are always interesting, at least to launch debates.
    As it is a management consulting firm (“conseil en strategie”), I’d rather believe in its strictly economic prediction, especially here the 3, 5 and 6.

    • chinabystander

      We agree to agree with McKinsey on 3 and 5. The reason that we disagree with you and McKinsey on 6 — or at least on the timing of 6 — is that we think reform is hitting the point where it means building new institutions not just dismantling existing barriers to trade and commerce. While new business institutions would diminish the power of state-owned enterprises, we think the SOEs will be able to continue their successful defence of their particular piece of turf for a while yet, certainly through 2011. — CB.

  3. About the 6, I think that our disagreement is just a matter of scale. You are right, they certainly will be able to protect their interests, but still their power will be decreasing, even slightly.

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