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What new economy means to China?
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Liu Fuzhong
THE much-talked-about concept of the new economy is new to many people in China. Therefore the presentations of theoretical studies and the new concept's applications have attracted a lot of attention.
Feng Subao, director of Strategy at Shenzhen Development Institute (CDI), presented his studies on the characteristics of the new economy and its impact on China.
According to Feng, the new economy is powered by ideas, technology, services and skills, not mass production as in the old economic model. CDI believes that the new economy uses knowledge, instead of energy and raw materials as inputs. The new economy also features mobile workplaces and frequent changes of jobs.
As Feng explains, at the core of the new economy is information technology. And innovation quickly becomes its propelling force. Technological breakthroughs are quickly translated into productivity.
However he said that the new economy is not separated from the old-economy sectors. On the contrary only by improving productivity in the older-style sectors can knowledge, know-how and new technologies prove their worth according to Feng.
He said that China should take advantage of its relatively large population of skilled people and improving investment environment to develop the information industry. He added that China will become a production centre for information related products in the world in the next 10 to 20 years.
In fact older-style firms have already seen the benefit of new technology to improve their productivity.
Ma Weihua, president of China Merchants Bank based in Shenzhen, told the audience how his bank has improved its service and financial performance by taking advantage of internet technology.
"We have followed all the steps of the telecommunications technology so far. When the Internet became available we started to offer Internet banking services. When the mobile phone service matured, we began to offer mobile banking." Ma said.
He said that the improved service based upon new technologies has contributed to the 50 per cent increase in deposits last year. The bank has now issued 13,100,000 bank cards, which Ma said makes it possible for the bank to offer electronically based personalized financial management services.
According to Ma, China Merchants Bank now operates all its activities through its electronic settlement systems, enabling it to track every transaction, evaluate workers' performance, assess risks and study clients' credit history.
China Merchants Bank is an example of how the new economy can integrate with and improve older-style companies.
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