Growth overseas can boost domestic activity

While stock markets around the world greeted China's better than expected first-quarter GDP figures with moderate enthusiasm, the recently announced 7.4 percent growth rate also sparked wide-ranging debate on the issue of current and future government intervention.

Sanpower House Of Fraser purchase 'shows ambition'

Shuanghui wraps up Smithfield deal, China's largest US takeover

A rate of around 7.2-7.3 percent had been widely expected, but even with a slightly higher rate reported, anxious speculation remains rife with "stimulus package," "public sector debt," "over-capacity" and "domestic consumption" among the most common topics of discussion.

Certainly, many of the issues under discussion deserve attention - perhaps "domestic consumption" most of all.

However, the key to halting this modest slowdown and re-igniting the Chinese economy with a more sustainable model is the continued international expansion of Chinese companies.

Paradoxically, it is successful international expansion that will contribute most to stimulating domestic consumption and contribute much toward a more modern Chinese business culture.

In the past few years, we have witnessed a surge in the number of Chinese companies expanding overseas, and not just to similar emerging market economies across Asia, South America and the Middle East. Sanpower's recent 89 percent stake in the UK premium retail clothing brand, House of Fraser and Chinese meat processor, Shuanghui International Holdings' $7.1 billion acquisition of Smithfield Foods, the largest pork producer in the United States, are but two prime examples.

But for these overseas takeovers and for international expansion to succeed, history tells us that central government must play an active, supporting role. This is the government intervention that must dominate the current and future debates on the Chinese economy.

At present any central intervention and involvement appear unclear.

Previous Page 1 2 Next Page

Previous Page 1 2 Next Page