Even Countries Follow A Version Of The S-Curve, Eg China

Some examples of this include the Chinese intervention in their sharemarkets in mid-2015 and early 2016 plus the currency depreciation without warning in 2015.

After the instability of the cultural Revolution (1960 -70s), China worked on political stability, eg at change its focus from class struggle to economic organisation. This was shown by a focus on market incentives and education; followed by agriculture, then infrastructure and heavy industry; then manufacturing and exporting. More recently it has focused on service and customer-based economy like finance, logistics, health care, tourism, etc; a knowledge-based economy with a cleaner environment; more equitable income distribution; less energy intensive industry. The last few decades China has had a growth rate around 10% but in 2014 it has started to slow. Despite this it is now the world's second largest economy.

Future growth industries of China are expected to be knowledge-based around service and customers with focus on less energy-intense industries like finance, logistics, healthcare, tourism, technology and environmental science (cleaner environment). For example,
- finance (over the past decade the number of proper institutional venture capital funds in China has grown from 32 to several hundred)
- health care (accounts for around 7% (US$ 700 b.) of China's GDP; this is expected to double over the next decade)
- environmental science (it is estimated to cost China US$1 trillions to fix its land, water and air pollution problems)

There will be less growth in areas around steel, cement, glass and other construction-related sectors (building infrastructure like railways, bridges, roads, factories, apartments, etc) which have provided the basis for the growth in the last 3 decades.
Even with a growth rate of 6%, China will create the equivalent of a Californian economy every 3 years and an Indonesian economy every 2 years.

On the other hand, the Chinese economy is facing some problems related to
- high debt levels (China continues to increase its debt, ie mid-2018 it was roughly US $ 12 t.. The government encourages companies to use bonds for financing to make the economy less dependent on state-owned banks, ie

"...China's economic growth was largely driven by debt and its corporate debt looks like a Ponzi scheme..."

 Qin Han as quoted by Bloomberg 2018

China's lack of experience in the financial market has encouraged authorities curb leverage by clamping down on shadow financing, boosting money market borrowing rates and tightening regulations on the asset management industry.

- a sluggish property market
- lack of transparency, eg the government's control of Internet
- persecution of opposition to the government like crackdown on human rights lawyers and their families

"....China is like a huge teenager. Physically, the country is relatively mature, strong and powerful, but it is a little too self-centred and in a way too insecure..."

Gary Rieschel as quoted by Les Murray, 2015

Is launched (1), sells slowly (2), becomes accepted and sales rise rapidly (3), market matures, ie market becomes saturated; product/service is copycatted by competitors; product/service is commoditised (4) and the market changes, ie replacement product needed (5). One way to handle this is by

"...looking at trends on the horizon and using your temporary monopoly to build the brand, make a profit, and then quickly move onto the next generation..."

Oren Harari has quoted by Brad Hatch, 2007b

For example, iPod

"...Apple refused to mirror the opposition, continuously rewriting the rules of music with its popular music player. Copycats looked on and then set out to copy it, but Apple cannibalizes its established market again and again. While everyone takes aim at its products, Apple jumps the curve and keeps on evolving......Apple's new mobile phone with iPod functionality went a step further recently - making a separate music player largely redundant..."

Oren Harari has quoted by Brad Hatch, 2007b

For an organisation, the sequence is start up (1), growth (2), control (3), maturity (4) and shake out or decline (5).


Search For Answers

designed by: bluetinweb

We use cookies to provide you with a better service.
By continuing to use our site, you are agreeing to the use of cookies as set in our policy. I understand