May 2006
China's development as a major economic power has accelerated foreign investment and interest in the country. Here, Monash researchers discuss what these changes mean for China's future.
Report: Natasha Whalley
A little more than 25 years ago, after years of state control, China adopted its official economic reform program, and by 2001 the Asian giant had joined the World Trade Organisation. Both decisions triggered unprecedented economic growth and social change in the Communist stronghold.
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Advance man: Professor On Kit Tam helped establish Monash's links with China. |
The move towards a more market-oriented economy -- still within the country's centralist political framework -- has seen living standards vastly improve, more economic autonomy for individuals, a thriving private sector and an opening up of the economy to increased foreign trade and investment.
China's gross domestic product increased by just under 10 per cent last year and is expected to jump by a further 9 per cent this year. In comparison, the US economy -- the world's largest -- is expected to grow by only 3.4 per cent in the same period.
With China's market becoming more accessible, there is enormous potential for mutually beneficial partnerships to be established between China's businesses and institutions and foreign entities.
In 2003, Monash's Faculty of Business and Economics initiated its China Strategy to expand education and research opportunities. The plan was developed by Professor On Kit Tam when he was the faculty's Associate Dean, International.
Since then, the faculty has secured formal partnerships in joint postgraduate programs and research ventures with four of China's top research and education institutions -- Tsinghua University, Shanghai Jiao Tong University, the Chinese Academy of Medical Sciences/Peking Union Medical College and the University of International Business and Economics.
The partnerships allow eligible students from the Chinese universities to undertake masters degrees in Beijing and Shanghai offered by Monash's Faculty of Business and Economics, including the Master of Business Administration with a specialisation in health services management.
Professor Tam, now Deputy Dean, International, in the Faculty of Business and Economics, says health services management in China is in great need of modernisation and is one example of how partnerships could provide mutually beneficial outcomes.
Professor Tam also leads a collaborative research partnership with the Chinese Ministry of Finance Institute of Fiscal Science, established last year to investigate the corporate governance of China's state-owned telecommunications and transport corporations, with a view to uncovering critical problems and making policy recommendations.
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Teaching retail: Mr Steve Ogden-Barnes sees a need for formal business education. |
"China wants to wind back its level of state ownership and only retain control of key industries and enterprises," he says. "This is a very complex process -- local government and ministers have vested interests, which is why I think a modern and independent Western perspective is needed."
Professor Tam says better corporate governance of state-owned enterprises could assist their transformation to privatisation and better performance.
"This will also be an important factor in the development of the rule of law, which is needed to promote market competition, combat corruption and eliminate misallocation of resources," he says.
Mr Steve Ogden-Barnes, a Program Director with Monash's Australian Centre for Retail Studies, visited China earlier this year to conduct leadership training for senior management for the largest home improvement and garden retailer in the UK and Europe, and the third largest in the world.
"The retailer, B&Q, is an example of a foreign investor that has entered the Chinese market and done quite well, largely due to joint venture partnerships it has established with local business," he says.
"It is important to retain an affinity with the country, and B&Q's decision to hire Chinese management has ensured this."
Mr Ogden-Barnes says there is a lack of formal business education in the retail sector, and the Monash centre plans to continue providing business education in China. "It could help retailers realise the importance of employee knowledge and service awareness," he says. Both skills will be invaluable when Beijing hosts the Olympic Games in 2008.
The world might be paying close attention to China's economic growth, but it is equally interested in the development of the country's military capabilities.
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Strong grip: Professor Bruce Jacobs says China's political system is still centralised. |
Professor Bruce Jacobs, Professor of Asian Languages and Studies in the Faculty of Arts, says China 's economic growth has been matched by increased investment in defence.
He notes that China has 800 missiles pointed at neighbouring Taiwan.
In 2005, the Chinese Government adopted a law stating that any Taiwanese initiative for independence would provoke Chinese military retaliation.
"Taiwan has become democratic, but China still remains under the control of the Chinese Communist Party and the various security agencies," Professor Jacobs says.
Despite a great deal of cultural and economic change over the past 20 years, the government is still very strong, he says.
"Things are not as centrally controlled anymore and new ideas are permitted, but public dissent is no more allowable than it was 20 years ago."
The latest edition of Monash Business Review contains several articles on China and India's booming economies. Monash Business Review is available online at the Monash Business Review website.
For more information contact Ms Natasha Whalley on +61 3 9905 9314 or email Natasha.Whalley@adm.monash.edu.a u.
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