The Boston Consulting Group --- For more than 20 years, China has been experiencing a dramatic transformation from a centrally planned economy to a managed market economy. It is difficult to overstate the achievements of the 1980s and 1990s, culminating in China’s accession to the World Trade Organization (WTO) in 2001. With economic growth in the range of 7 to 8 percent annually and foreign direct investment exceeding $50 billion per year, China is clearly a major force in the world economy whose impact will only grow with time.
Much has been written about the policies that have enabled or hindered this progress. That is not our purpose here. Instead of evaluating the Chinese political system or the country’s macroeconomic and industrial policies, we want to share our perspectives on how to build sustainable competitive advantage and achieve profitable growth within the rapidly evolving Chinese economy.