Chinese Economic Development and Leadership Strategy: The Challenges of Creating Competitive Advantage

Abstract

In the last three decades China’s economic development have achieved great many things some of which are 73 or more companies among the Global Fortune 500 (E & Y Report, 2012). This progress accelerated the country second to the US in its ranking. In addition, Chinese companies are expected to represent close to one fifth of all Global 500s by the 2020. The economy consistently grew 10 percent for the past decades and is anticipated to recover from the recent global financial crisis faster than some Western nations (Ju and Mirza, 2012). The economic growth has created debate among two camps; the skeptics are projecting the bust is near, while the cohorts claim to foresee continuity in the general direction. The purpose of this paper is therefore, to examine China’s economic development in light of an assertive strategic leadership that created sustainable economic development and distinguish the challenges of implementing a strategy to create competitive advantage through multiple economic systems; a market lead economy and a robust state developmentalism. The main question is; could it be possible for China to continue on the path of economic development and create a competitive advantage? If so, what are the opportunities and the challenges? Examination of the questions by using Institutional theory, leadership strategy, economic growth and institutional development theories indicated that continuity of the economic development depends on an assertive leadership and liberalization. Also, China should look into its own brand, and create unique or differentiated products, methods and processes that can sustain economic development. The local sector has similar characteristics as western market lead economy; that the managers are motivated by financial incentives that are received when their decision lead to an overall profit.