As the world’s second-biggest economy – having overtaken Japan last year and still doubling in size every seven years or so – China with its 1.2 billion population represents the largest broadly homogenous market but a potentially frightening competitor.
The Chinese term "weiji" is quoted by corporate venturing veteran Robert Kirschbaum, vice-president of open innovation at Netherlands-based chemicals and pharmaceuticals company DSM, as it signifies the optimism that "every crisis or threat harbours the seeds of opportunity".
So, while markets appear different only because of how we know them, China can represent opportunity or a threat, but it certainly represents change.
China’s consistent strategy, and one that is likely to remain constant after the next change in premier in two to three years, is to move up the production value chain and innovate and create more intellectual property.
At the moment, however, China has yet to achieve its goal. So while it has a net balance-of-payments surplus with the US and other Organisation for Economic Co-operation and Development countries, it carries a payments deficit in Asia and other more emerging countries.
China has been considered by many countries as a cheap supply source, but rising labour and materials costscould affect the country place at the starting point of the Silk Road.
It is equally daunting for those trying to sell goods and services into a country with different regional tastes, which I have characterised as the Great Wall of China. China is now actively building or buying global brands and developing its distribution chains, and some are now ready to expand internationally.
Telecoms equipment maker Huawei has developed new products in mobile phone infrastructure and become a global powerhouse, while there are many other businesses which now have the research, design and manufacturing capability and large and growing markets in clean-tech or health products that the governments supports.
We will soon be seeing the new phase as "enter the dragon" as more Chinese businesses drive their abilities outside the country. China is a hotbed for understanding its own and other markets and technology.
But the business rules and culture are very different from western traditions – the Chinese play by their rules rather than foreigners’, and local people are vital to integrate an operation in China with the core business.
The corporate venturing and venture capital markets are also developing quickly – in less than 15 years they have built stock markets, a better-capitalised banking system and the broader financial infrastructure.
This financial infrastructure comes with the physical ecosystem being improved. The Economist’s Emerging Markets Summit was told China was currently building 57 airports and over the next 15 years would construct the equivalent of two cities the size of Chicago every year.
The growth in population and shift from agriculture to cities would mean by 2025 15 Chinese cities will have more than 25 million inhabitants and there would be 6 million university graduates this year alone.
Given that by 2030 93% of the world’s middle class will live in what is currently termed emerging markets it is clear that China and the broader global economy offers plenty of opportunities as well as threats.
H-I Network and Global Corporate Venturing as media partner are attending The 10th China Venture Capital and Private Equity Annual Forum. Information: www.zero2ipo.com.hk/cvcf/sh2010/overview.asp. Bookings: andrew.gaule@h-i.com