As China celebrates its progress over the past five years and looks forward to further economic and social development in its next five year plan period starting from 2006, some countries in both developed and developing world are still preaching so-called "China threat". But many others think differently. Our reporter Chen Xuefei has recently had a written interview with Bill Fischer, Professor of Business Administration, IMD, and former-President Sino-European International Business School in Shanghai. Mr.Fischer thinks China's development can be a huge opportunity for the world.

Q: Professor Fischer, how do you comment on China's economic growth and social development? What's the great challenge ahead?

Mr. Fischer: I think that China's economic growth, since 1979, has been extraordinary; certainly one of the great stories of the 20th century and likely to be one of the biggest in the 21st century, as well.

It has not been without some serious dislocations, of course, but that has been true for most great economic successes, and China is no exception. I believe that there are several major challenges ahead, but let's not forget that overall the quality of life in China is better, and for more people than it probably has been at any other point in recent history. Among the challenges, I'd include: China needs to be sensitive to the growing disparities between the rich and the poor. There has been a lot of comment recently both within the Chinese and foreign press about China's "gini" coefficient reaching levels that some might consider alarming. This also somewhat, but not entirely, an urban-rural difference, but could be a source of continuing social problems if not addressed more effectively than it has been. Feelings of inequity particularly within the countryside neighboring some of China's largest and most prosperous cities are indications of the seriousness of this problem.

A second great challenge is in keeping the already-high level of unemployment in check. China has had high levels un- and underemployment for some time, but this is a chronic problem in that seems not to go away, and it is extremely serious.

A third challenge will be to continue to assure China's integration into the world economy. Over time, this will mean that China will have to accept an increased foreign economic presence in its domestic economy; it will have to support the social infrastructure that leads to Chinese domestic firms becoming better-prepared for international business activities, and it will have to support the development of internationally-acceptable governance frameworks for business ownership/management, investment, and for intellectual property.

Q. As you know the Fifth Plenary Session of the 16th CPC Central Committee has issued new strategies on a more sustainable way of developing its economy by a great shifting of emphasis. From now on, GDP will not be the only measurement for achievements, environment impact and social equality should also be under consideration. What do you think of this?

Fischer: This is, of course important, especially given what I've noted above, but it is much easier to announce such action than it is to administer and enforce it. The story of China, like many developing countries, is that when faced with choices between ecological and social responsibility on the one hand, and employment and wealth-creation on the other, they inevitably choose the latter, and who can blame them? The further one moves from Beijing and the richer areas, the more difficult it is to ensure that such policies will be respected.

Q. What do you think of Chinese workers, employment and the impact of urbanization in China?

Fischer: I think much of the attraction of urban areas for migrant workers is the hope of gaining wealth that would be otherwise unavailable in the interior and rural areas. However, the continued construction of China's urban areas is today dependent upon these same migrant workers. They have become "institutionalized" into the saga of China's modern growth. This creates a bit of a conundrum, as these same migrant workers are probably the most socially-vulnerable group to dissatisfaction over wealth inequities, since every morning they wake up in places where there is considerably more wealth and opportunity than is available to their families back home, They also live on the margins of these same urban societies that they are building and they are concentrated spatially and socially in ways they would not have been if they had remained at home. So, they pose a possible threat to social security, but they are essential if China is to continue to deliver on its promise of prosperity to the upwardly mobile urban population.

Q: Many people blame China of grabbing the jobs not just from Europe or America, but also that of Jakarta and even Africa, is it fair to China to have such kind of comment?

Fischer: The reality is that with globalization has come the opportunity for foreign buyers to source products from China, where they are cheaper than from local factories, from which they had previously bought. As a result, jobs are lost, and those jobs reappear in China. Should China be "blamed"?

I think, actually, that the market preference for goods that are more affordable and at the same quality is the real culprit; and these products are increasingly being made in China. In other words, the reasons that jobs are being in lost in Europe and North America is that we European and North American shoppers are expressing a preference for those products which happen to be made in China. We, the European and North American shoppers are the real cause of these job losses. If European and North American factories could make the same products for a lower price, we'd return to buy locally. It's not that we're buying Chinese or local, but that we're trying to maximize the value we receive for the dollar or Swiss franc or pound that we spend and lately that means buying products that are Chinese made.

Q. What's your comment on so-called "China threat", Is China's development really a threat to the world, or a contribution to the world in terms of poverty alleviation and maintaining stability?

Fischer: We live at a geopolitical time when "fear" seems to be the dominant reflex, but whatever happened to "opportunity"? Despite all of its historical disappointments, China is one of the few places that actually has the potential to become a true ElDorado market: the numbers, the demographics, and increasingly the disposable income, are compelling; the opportunities are great. Besides, what really is at risk here?

Seventy-to-eighty percent of China's high-technology imports and exports are accounted for by foreign-invested enterprises. It is not "the Chinese" who are responsible for this intellectual property being in China, but the foreign IP owners. Assuming that these are bright people, not engaging in lemming-like behavior, they must see more opportunities than risks. Additionally, most of this technology involves assembly components rather than the "family jewels." Yes, there is counterfeiting; yes, there is copying; yes there are surprising new regulations [wireless communications, retailing]; but such behavior alone, while locally troublesome, should not be a reason for "fear" on the global stage.

The real competitive advantage that modern complex organizations have is the knowledge about doing business, running a large, global corporation. This sort of IP is tough to copy. Managing a modern, global competitor is an extremely difficult art-form.

The truth is that nearly a quarter of the world's population is building a new future for themselves, and by default for the rest of us as well. We should want to be a part of that. Fear only keeps us out of the game.

By People's Daily Online