The International Monetary Fund has recently predicted that the Chinese economy will grow by 1.9 percent this year, making it the only G20 economy to register positive growth in 2020. Also, China's economy is forecast to increase by as much as 8 percent next year－and its share of global GDP is set to increase from 18.56 percent in 2020 to 20.18 percent by 2025.
True, China's rapid and robust response to the COVID-19 pandemic is responsible for its economy to be back on the growth path much faster than other major economies. But what are the main drivers of China's economy and how can they be further strengthened?
China's transition from a producer of low-cost goods to a consumption-led economy is pivotal to the above statistics and the growing importance of the Chinese economy. Yet domestic spending on Chinese brands, a key indicator of modernization, remains a concern. While this should pick up in time, it is an area that needs a boost. Raising the profile of the products offered would help do that.
Perhaps Chinese brands can consider co-branding with their Western counterparts.
Chinese companies would show impressive growth figures if they create a niche in international markets and ink effective tie-ups with suitable Western partners. Events such as the China International Import Expo, held earlier this month in Shanghai, offer a platform for establishing such tie-ups.
A co-branding arrangement in which a Western and a Chinese partner agree to not only work together but also present both brand names (corporate and/or product) to the consumer, is exactly the kind of support Chinese brands need to fully exhibit their potential. As such, the Chinese government could consider incentivizing such co-branding partnerships.
Chinese consumers, especially those born after 1990, should welcome such initiatives, as they will boost the presence of domestic brands. And there are reasons to believe that a large percentage of Chinese consumers now trust Chinese brands more than some foreign ones. This is evident in the fashion market where Chinese consumers now yearn for Chinese elements in apparel design. For instance, Chinese embroidery is highly valued.
Which means, for example, that by investing in the embroidery industry, the government could expedite the development of Chinese fashion brands.
Fashion brands carry a lot of emotional meaning, and if infused with Chinese elements, they can have a knock-on effect on Chinese industries as a whole.
The government stimulus package for the service sector, in particular shopping malls and family-run businesses, is welcome but to boost domestic consumption, more investment is needed in training programs, especially customer service training programs, because often soft qualities such as empathy distinguish a high-quality service provider from a mediocre one.
In particular, Chinese service providers that want to make great strides need to increase investment in all areas of customer services. In this regard, Western service providers, keen to get a share of the Chinese market, can help play a role in improving customer services. And apart from tie-ups between Chinese and Western service providers, partnerships between the service sector and some government organizations are also needed to expand and improve the training programs.
In other words, the expansion of Chinese brands through co-branding partnerships could play a critical role in driving the economy.
The author is an MA Fashion Marketing and Branding program leader at the University of Southampton's Winchester School of Art.
The views don't necessarily reflect those of China Daily.