China’s economy ‘is becoming much more influenced by politics’

Interview

In a detailed interview conducted by the Lusa News Agency, economic affairs expert on China, Christiane Prange, made a striking assertion regarding the shifting dynamics within the Chinese economy. She claims that China’s economy “is becoming much more influenced by politics,” urging foreign companies within the country to pay close attention to geopolitical and national security issues.

“Nowadays, companies venturing into China need to be aware that the economy is becoming significantly more influenced by politics,” Prange emphasized, pointing to the speeches of President Xi Jinping, who has been announcing “most of his steps” himself. This observation underlines the increasing intertwining of economic strategies with political agendas under Xi’s leadership.

Prange, the author of “Xiconomics: What China’s Dual Circulation Strategy Means for Global Business,” presented recently in Lisbon at the Macau Cultural and Scientific Center, noted a significant shift in the business landscape. She stated, “Doing business today will be impossible if one tries to ignore geopolitics, which is perhaps the biggest change.” She further highlighted the growing importance of national security concerns in business strategy, compared to the past.

For foreign investors, Prange recommends establishing networking within China and diversifying value chains as “the legal situation regarding information transfer has become much more critical.” This advice points to the increasingly complex legal environment foreign companies must navigate in China.

“The uncertainty is increasing, ambiguity is increasing, and most Western companies need to be much more agile and quick to survive in the market,” Prange stressed, underscoring the challenges Western companies face in adapting to the rapidly evolving Chinese market.

Throughout the interview with Lusa, Prange described the evolution of doing business in China. It has shifted from bringing knowledge and “helping the country grow,” to a phase of “better understanding the culture to be able to establish connections.” However, Prange asserts that it’s not just about the culture anymore; understanding the historical development leading to the current geopolitical situation is crucial. “To understand (President) Xi Jinping, in my opinion, one needs to look back in history,” she argues, indicating the importance of considering the historical context of both Xi Jinping and the broader landscape of the Chinese Communist Party and the country itself. MDT/Lusa