A good story for countries to reflect on

By Jiang Xueqing | China Daily | Updated: 2018-05-03

Editor's Note: This year marks the 40th anniversary of China's reform and opening-up. China Daily interviewed top executives of well-known multinational companies for their views on the country's socioeconomic development.

Raymund Chao, PwC Asia-Pacific chairman.[Photo/VCG] 

China's development is a robust model that benefits governments, businesses and communities, PwC Asia-Pacific chairman says

Please use three words to describe China's changes in the past 40 years.

Unprecedented, exciting and game-changing.

What are the biggest achievements in China since the introduction of the reform and opening-up policy 40 years ago?

Poverty alleviation and wealth generation: China's development has contributed to inclusive growth through poverty reduction, dramatically improving the living standard of 1.39 billion people.

Urbanization: A huge achievement has come via China unlocking the power of cities for sustainable development. When China embarked on the opening-up policy 40 years ago, the percentage of the urban population was less than 20 percent. By 2016, the urbanization rate reached 57.35 percent.

Geopolitical shift: China has changed the international landscape to become one of the main drivers of the global economy. Since 1978, China's ranking with respect to GDP globally has increased from the tenth to the second, and it is on track to become the first. We now see cities in China that have the same level of GDP and social contributions as many nations around the globe.

Transition from technological adaptor to innovator: China is developing into a leader regarding the development and application of cutting-edge technology. The world is now following in China's footsteps in areas like drone building, mobile applications, AI and new energy.

Economic reform: The introduction of market principles, opening up to foreign investment and enabling entrepreneurs to start their own businesses has created enormous business opportunities and wealth in the private sector.

What's the biggest challenge China faces today and how can the country overcome it?

President Xi Jinping has made it clear that eradicating poverty in rural areas by the end of 2020 is the "bottom line for China's building a well-off society in an all-round way, and also our solemn commitment". China has to continue working on promoting industrial development in poor regions, giving the poor easier access to employment services, healthcare and education, and improving infrastructure in poor regions.

In addition to these socioeconomic challenges that China is responding to, one major challenge relates to adapting to the ever-changing frontier of possibilities brought about by the pace of change that has come with the nation's rapid technological developments. China's initiatives, like Internet Plus and Made in China 2025, have helped the nation quickly become an established leader in tech such as fintech, AI, drone manufacturing, online retailing and mobile payments.

Building and sustaining trust in an ever-changing world is being recognized as one of the most significant challenges faced by organizations across all industries. The global financial crisis already demonstrated how important trust is, and how easily it can be damaged. But in a world that's changing beyond all recognition, the very purpose of business-not just its practices-will come into question. Trust is seen as the key differentiating capability.

The demand for greater organizational transparency is rising in China, particularly with respect to systems, processes and sources of materials and ingredients. The pressure on the environment is also mounting as our population grows and becomes more urbanized. By way of example, building trust in food safety and food quality is an extremely difficult and complex problem for China as consumers seek increased transparency and greater information about the ingredients and origins of the food they purchase. Additionally, building trust is essential to the successful adoption and use of AI.

In creating trust and being transparent with people, organizations will need to educate their people and equip them with the necessary skills for the future. Even prior to that, it must be acknowledged that our children's education system requires an overhaul. A "one shoe fits all" approach to education is being questioned by many as we hear about more children being home schooled or being sent abroad to pursue alternative education paths. Doubt has been expressed publicly by well-known business figures about whether the existing education system will be sufficient to allow our children to compete in a world of machines. We need to recognize the importance of teaching soft skills and creative skills.

How has your company benefited from the reform and opening-up policy?

While we can trace our roots in the Chinese mainland back to the end of the 20th century, our antecedents, and other major accounting professionals, entered the Chinese mainland under the opening-up policy since the early 1980s. Our profession has played a critical role when China began the opening-up policy in the 1980s. For example, we played a role in assisting State-owned enterprises' reform, nurturing the private sectors and connecting Chinese brands and global investors.

Today, collectively we have more than 600 partners and over 18,000 people in the Chinese mainland and Hong Kong, working collaboratively in over 20 major cities and SARs, to build trust in society and solve important problems.

Furthermore, inspired by the possibilities arising from the opening-up policy, PwC China has been able to establish innovative new initiatives, such as our Innovation Platform (an enabling innovation ecosystem), our China Centre of Excellence, the Experience Centre, and the You Plus Program, which is a new approach in the field of business professional training.

Through the You Plus Program, we aim to cultivate a new generation of business leaders that can generate greater insights and have the ability to think ahead, to optimize the job market in China, to create job opportunities, and to contribute toward the sustainable growth of the economy.

Has competition intensified between your company and Chinese companies?

Chinese companies have excelled as the nation has continued developing over the last two decades. The emerging market has brought about challenges, for sure, but also many significant opportunities.

We have been agile and responded to market needs. Today, the market wants us to provide multi-disciplinary services, so we have had to broaden in order to adapt. By drawing on the full extent of our resources across our global network, we are able to cover multiple industries and provide holistic services tailored to our clients' needs.

Additionally, as China's reach extends, with initiatives like the Belt & Road, companies like ourselves that have global reach and expertise can offer a differentiated service characterized by support that connects across regions, and spanning multiple sectors.

Looking ahead, we believe we will see more intricate blending of tech resources and talented people together, with opportunities for continuation in growth and brand while expanding opportunities for our people.

The market is big enough for all kinds of players in the industry. We are the largest local professional services firm with one of the largest global networks providing deep local and international capabilities to help our clients succeed. We need to let the market do what it needs to in order to determine resource allocations and it will drive the right result.

How do you view China's role in the world today?

Today, China is considered as a key driver of growth, a disrupter of traditional sectors and a creator of innovation. As the world's second largest economy by GDP, China undoubtedly plays a crucial role in the world. With the increasing significance China has on global economic and political progress, China's development plans will carry more influence than ever before.

It is also clear that China is rising up to the challenge. President Xi has highlighted the importance for China to help safeguard stable globalization, cushioning against its negative impact, while ensuring technological progress and innovation are used safely and sustainably in service of mankind.

Could China's experiences and practices be used to solve global problems?

China's pursuit of inclusive growth, premised on strong and sustainable economic development, is a robust model that benefits government, business and communities.

In addition to providing a model to solve global problems, China's Belt & Road Initiative, initially proposed by President Xi in 2013, set out the objectives of increasing connectivity between nations, promulgating free trade and developing new opportunities for the countries along the routes as well as China. The Belt & Road Initiative is fostering a collaborative approach among nations to develop socio-economic conditions in the countries along the routes.

In support of this, PwC has established a membership-based platform, which we aim to use to connect all aspects of expertise under the Belt & Road Initiative. We encourage members to bring and share productive resources, and contribute and share values. As the initiator of the platform, PwC is ready to share resources and practical experience from right across our expansive global network.

The China Experience is an example for many to learn from, and there is still a long way to go. But it has been a phenomenal 40 years and China's journey is a good story for many to ponder and reflect on.

What is the most unforgettable experience you have had in China?

I started working in the Chinese mainland in the 1990s and later moved to live in Beijing in 2002. During this time, I have seen so many amazing changes and development within China. I have seen many of my clients prosper and grow extraordinarily, and at PwC, we are now approaching 20,000 people, realizing remarkable growth. Experiencing this journey in ever-changing market conditions and riding all the waves that come your way is what makes my experience in China unforgettable.


Name: Raymund Chao
Age: 57
July 2017-Present: PwC Asia-Pacific and China Chairman
July 2015-Present: PwC China Chairman
July 2011-Present: Member of PwC Global Assurance Executive Team
July 2011-June 2015: Assurance Leader of PwC Asia-Pacific
Jan 2005-June 2011: Assurance Leader of PwC China
Wilfrid Laurier University, Bachelor of Arts, Honours Economics with Finance and Accounting

5 May 2018  China Daily - http://europe.chinadaily.com.cn/a/201805/03/WS5aea6a93a3105cdcf651bbc2_2.html