WATCH WHAT CHINA DOES, NOT JUST WHAT IT SAYS
That said, businesses and investors should watch what China does, not just what it says.
There are useful policies that are already in place, such as the Real World Evidence (RWE) programmes for medical technology companies entering China. The first RWE programme, launched in Hainan province in 2019 and followed by the Greater Bay Area in 2020, gives medtech companies early access to the market through trials and studies for rare diseases and clinically urgent needs, and the opportunity to fast-track regulatory approvals, reimbursement listing, and/or commercialisation, potentially enabling them to influence and shape the market.
The plenum stated that it is focused on creating a “beautiful China”, by accelerating green transformation and pursuing green, low-carbon development, among others. This alone may not say much.
But if taken together with its directions of improving the mechanism for modern infrastructure construction and the resilience and security of industrial supply chains, the opportunities in environmental sustainability could be vast.
For instance, the plenum proposed deeper reforms of its railway system and further develop the “low-altitude economy” (such as drones and flying cars). This means demand for renewable energy will likely increase. The need to secure the supply chain in the production of these assets would be critical.
Perhaps the most telling sign that businesses should keep their eyes on China’s actions is that the plenum specified a timeline to achieve the reforms. In past plenums, the CCP had not set such timelines.
This time, unusually, Beijing has given clear indication of a 2029 deadline – an important year as the People’s Republic of China celebrates its 80th anniversary. Some analysts see this as an effort to focus the CCP on implementing the reforms.
This, in a way, provides a direction for businesses and markets on China’s roadmap.
While the road ahead is fraught with challenges, businesses that can navigate these complexities and leverage emerging opportunities will be well-positioned to thrive.
Thomas Kwan is Managing Director of Hong Kong at Penta Group.