China needs to build global brands and companies similar to Apple Inc to stave off a possible loss of competitiveness in as few as three years, said Jack Welch, former chief executive officer of General Electric Co.
Rising wages in China are fuelling inflation and may spur more global manufacturers to move production to Vietnam and countries in Africa, Welch told reporters in Shanghai.
China is a “long way from losing its competitiveness,” he said. “It’s going to happen. Three years or five years, it will happen.”
China can no longer rely on exports and low-cost production for economic growth and must innovate by building global brands and creating “10,000 Apples,” he said. Steve Jobs, who transformed Apple into the world’s largest technology company before resigning as chief executive officer last month, is “absolutely” the world’s best business leader, he said.
“Right now China is missing global brands,” Welch said. “That won’t be for long.”
Premier Wen Jiabao is seeking to raise wages and boost investment in social housing to help sustain growth in the world’s second-largest economy as a faltering US recovery and Europe’s debt woes cap demand for Chinese-made goods. China’s export orders contracted for the first time in more than two years, the China Federation of Logistics and Purchasing said on September 1.
Rising Wages
A total of 13 provinces raised minimum wages in the first quarter of the year by an average 20.6 per cent, the official Xinhua news agency reported in April, citing a spokesman for the labour ministry.
China’s inflation rate jumped to a three-year high of 6.5 per cent in July.
Consumer price gains may have slowed to 6.2 per cent last month, according to the median estimate of 26 economists surveyed by Bloomberg News. August inflation data are scheduled to be released September 9.
