Growth China
Since the beginning of the economic reforms, the economy in China has enjoyed a real
growth rate of approximately 10% per year until 2010. In the last years, the Chinese
economy has endured a slowdown during consecutive years. In 2014, policy measures
guided a gradual slowdown to 7.4 percent from 7.7 percent in 2013 (Worldbank, 2015)
Analyst have predicted that China’s GDP growth will slow to 7.3 or 7.4 in the next few
years. The authorities have set a goal target of about 7.5 growth rate for China. A
potential decline in investment growth will be offset by a planned increase in
consumption growth. The growth in consumption is supported by an increase in
household incomes. Many low-income households will become significant consumers.
Analysts predict that by 2022, nearly 80 million households will have incomes greater
than $35,000 US. Other economic drivers include the shifting of manufacturing towards
services. The impact of decelerating growth on labor markets has been so far relatively
small due to the structural shifts of economic activity toward labor-intensive service
sectors.
The fundamental drivers of the global recovery remain intact and should provide a
favorable tailwind to China’s net export growth. However, headwinds from a gradual
deceleration of credit growth can be expected to weigh on domestic economic activity.
The Chinese renminbi continued its steady appreciation, reflecting gradual liberalization
and renminbi internationalization.
China will generate revenue of $107.8 billion in 2014, up 9.7% from 2013. Over the five
years through 2014, industry revenue has been growing at an annualized rate of
12.4%.There are over 2.1.The Fast-Food Restaurant industry in China is very large,
generating estimated revenue of $107.8 billion in 2014. This industry has performed
well over the past five years, with annualized revenue growth of 12.4%. The industry
now makes up about 20.0% of China’s total catering sub-sector revenue.
China fast-food restaurants market: New market research published (2014). . Chatham:
Newstex. Retrieved from http://search.proquest.com/docview/1634885457?
accountid=12924
Chinese fast food industry is anticipated to grow at a CAGR of around 13% during
2011-2014. Currently, the market growth is largely fuelled by the increasing acceptance
of western culture and increasing disposable income of the consumers. Anticipating the
future growth, many big international players are entering into the market by making
deals with the domestic players. Further, already existing players are expanding their
presence in different provinces of the country.
Ongoing analysis found that, the Chinese consumers are increasingly shifting towards
different food flavors with the emerging acceptance of franchising route. These trends
are expected to grow in coming years on the back of huge untapped opportunities in
both the sectors. Besides, changing consumer behavior is emerging as one of the major
driving factors for the Chinese fast food industry.
“Research and Markets: China Fast Food Market Analysis.” M2 Presswire 11 Feb.
2011. General OneFile. Web. 29 Mar. 2015.
Growth South Korea
South Korea’s (Korea) growth experience since the earl 1960s has been widely
documented. In 1961, according to the Penn World Tables, Korea’s per capita GDP was
11% of that of the United States, about the same as in Sri Lanka. By 1995 its per capita
GDP was 49% of the United States, comparable to Portugal or Slovenia. In the
intervening period, Korea experienced growth rates of real per capita GDP that
averaged 6.6 percent per year. The engine behind this incredible growth was Korea’s
international trade. The accumulation of capital contributed to rapid technological
upgrading and stunning transformation of exports. During the 60s non-fuel primary
products accounted for more than half of Korea’s export. A decade later, Korea’s export
was dominated by manufactures, such as textiles and iron and steel. Today’s Korea’s
exports are concentrated in vehicles and telecommunications equipment.
Nowadays, Korea is one of the World’s wealthiest economies (G-20 major economies
and member of the Organization for Economic Co-operation and Development, OECD).
Korea has a market economy that ranks 15th in the world by nominal GDP and 12th by
purchasing power parity (World bank statistics, www.worldbank.gov)
Something important to point out is that Korea appeared from outside to have achieved
“growth with equity”: measured wage inequality has been low by international
standards. (Korea’s growth performance, past and future. 2011, East-West Center,
Marcus Noland)
Fast food registered the fastest value growth of all consumer foodservice categories in
2013. Over the review period, the appeal of major fast food chains expanded as they
diversified their menu offerings, outlet concepts and engaged in various promotional
activities. During the economic rebound in 2013, South Korea’s fast food outlets gained
popularity among value-conscious consumers. Convenience stores fast food registered
the strongest value growth within fast food, supported by the fast development of the
single-person household segment in 2013. In addition, major chained convenience
stores diversified their menus by introducing various convenient meals such as
lunchboxes and dosirak at competitive prices. (http://www.euromonitor.com/consumer-
foodservice-in-south-korea/report)
In 2013 fast food recorded the significant 7% value sales growth, although the total
number of outlets increased by 3% due to the regulation by the Fair Trade Commission.
Driving this value growth was convenience stores fast food, which grew by 20%, and
burger fast food with a 12% value increase. Burger fast food registered the fastest
growth in outlet numbers, with an 8% rise, as the regulation was not yet applied. Fast
food recorded significant current value growth during 2012 as the number of outlets in
the category increased substantially. In particular, burger fast food and convenience fast
food recorded strong growth in the numbers of outlets during 2012, with these
categories also driving overall current value growth in fast food.
CompaniesandMarkets.com: South korea fast food market: New industry analysis
published (2014). . Chatham: Newstex. Retrieved from
http://search.proquest.com/docview/1641260454?accountid=12924
China Science and Technology
China was a world leader in science and technology until the early years of the Qing
Dynasty (17th century) (http://en.wikipedia.org/wiki/Qing_Dynasty). During the last
century, United States and Europe dominated the field of Science and Technology
worldwide. During the last couple of decades, a policy that China’s government
adopted is to ask foreign companies technology transfer (join ventures, request to
create R&D centers in China, etc) in order to allow access to the Chinese market. Now
China is increasingly targeting indigenous innovation. In 2012, China’s total spending
on R&D was around $160 billion US (under 2% of China’s GDP) in comparison to $447
billion spent in the US. Scientific advances contributed to more than 50% of China’s
economic growth in 2011.
According to Qiu, in 2009 China manufactured 48.3% of the world’s televisions, 49.9%
of mobile phones, 60.9% of personal computers, and 75% of LCD monitors. With
substantive indigenous components. The software industry in China in 2010 had a
higher than 15% share of the world’s software and information service market and had
been growing very fast in the last decade. (Gang Qiu, The Rise of China’s IT Industry,
January 1, 2012, SERI Quarterly).
According to the China Internet Network Information Center, in 2011 there were 505
million Internet users in China (approximately 37.7% of the population). Similarly with
cellular phone accounts, in 2012 China surpassed the one billion number of users.
China plans to increase R&D’s expenditure to 2.5% of GDP by 2020. Similar to
developed countries in the West, China is funding megaprojects in areas such a nuclear
energy, nanotechnology, quantum physics, clean energy, among others.
The race for developing China’s technologies capabilities is associated with the fact that
the government realizes that the renminbi’s inevitable appreciation would eventually
occur which will impact China’s low cost exports. The only way to keep China’s
economy growing is to provide jobs in high tech industries to the next generation of
better educated workers and boost income levels.
References:
China’s rise as a major contributor to science and technology, Journalist’s
Resources, Last updated: January 5, 2015.
http://journalistsresource.org/studies/international/china/china-rising-science-
technology-research-contributions
Building an IT Economy: South Korean Science and Technology Policy, Joel
Campbell, Troy University.
Korea has supported its economic development on a strong science and technology
capacity. In the 70’s and 80’s R&D was a government affair only, but in the late 80’s to
late 90’s a change of direction took place as Korea’s chaebol conglomerates became
the lead actors in R&D. However, the National S&T Technology program became the
focus of state efforts and funding.
Into the new century, Korea had achieved strong aggregate performance in numbers of
researchers and funds spent on R&D. The IT and to certain extent biotech became the
major drivers of technological development. This was only the beginning of the
blossoming IT sector in Korea.
As of 2008, Korea ranked 5th highest in terms of R&D (http://www.korea.net/main).
Seoul is known as the world’s “leading digital city” and a “tech capital of the world”
(http://www.theage.com.au/articles/2007/06/16/1181414598292.html).
