According to Gary Coleman, managing director of global industries at Deloitte, speaking to CNBC Africa the World Economic Forum Annual Meeting of the New Champions in China this year, over the last two decades, China has grown rapidly through its low cost manufacturing markets and by taking advantage of its labour arbitrage.
However, in order for the country to sustain its growth trajectory, it may be time for reforms.
“China needs to move away from low cost manufacturing, they need to move up the value chain by looking at which investments to make and what reforms are needed,” he said.
Coleman explained that China needs to shift its investment focus to sectors that are expected to grow globally such as IT software, marketing and logistics.
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“If [China] can meet global and domestic demand, produce items locally and implement reforms, then they will be successful.”
The challenge however, he added, is the implementation of China’s reforms.
“It’s one thing to put reforms on a piece of paper and speak about them but it’s another thing to implement them and get the desired outcome that you’re really looking for,” explained Coleman.
He believes that an important reform for the country would be in education.
“There have been predictions that by 2025 there will be 40 million jobs opening that the labour pool is simply unable to supply because the skillsets of the unemployed don’t match the skillsets that are required.”
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He therefore proposed that China’s government and private sector work together to understand what the required skillsets are and then set a curriculum.
Other necessary reforms, Coleman added, would be in increasing transparency of information as well as the free flow of trade.