This year marks the 40th anniversary of China’s economic reform and opening. In December 1978, China’s “open door” policy signposted a turning point in its economic management and trajectory.

During this period, the character of China’s economic management has evolved from being strictly centrally planned, export-oriented and state-led to one that is more market-led and oriented towards domestic consumption.

China’s gross domestic product has achieved an average annual growth rate of 10 per cent in the past 40 years – three times the rate in the United States over the same period.

Its GDP per capita increased from US$156 (Bt4,900) in 1978 to $8,123 in 2016, lifting more than 800 million people out of poverty. By comparison, the US GDP per capita was $57,638 in 2016, indicating there is still growth in the China story.

Today, China is the world’s largest economy on a purchasing power parity basis. It is the world’s largest manufacturer, exporter and holder of foreign exchange reserves. And China is actively aiming for a leadership role in globalisation and in combating climate change.

All of these impressive achievements are thanks to the perseverance and far-reaching changes in China’s economy and society, from the decollectivisation of agriculture to the expansion of international trade and the welcoming of foreign direct investment.

The Chinese government has also committed to reforms in banking, securities and insurance. These included diversifying banks’ equity structures and transforming state-owned banks into joint-stock banks. Key securities companies were restructured, while reforms in the insurance sector also progressed.

Another key phase of reform is allowing more foreign participation in China’s capital markets. The country’s capital account is becoming increasingly open in de facto terms. China now has the second-largest equity market in the world. From a total market capitalisation of $513 billion in 2003, it has grown 17 times to $8.7 trillion last year. The country’s domestic bond market is now the third-largest in the world.

Significant progress has already been made to internationalise the yuan. Just over a decade ago, yuan usage was largely confined to the mainland. Today, more than 10 per cent of China’s trade is settled in the currency.

After primarily being a recipient of FDI for four decades, China has now emerged as a major FDI-originating country as well, with non-financial outbound direct investment rocketing from less than $1 billion in 2000 to $170 billion in 2016. China’s “reform and opening” efforts have also allowed it to enter an era of new economic growth, with consumption, innovation and green energy leading the way.

Changes are already taking place. Domestic demand has steadily expanded, with final consumption contributing 58.8 per cent of economic growth last year, nearly four percentage points higher than five years prior.

The country has also become the global leading force in digital technology and innovation, driven by its rising middle class and a young, free-spending, digitally connected new generation of consumers.

China has more e-commerce activity than any country in the world. It accounts for 42 per cent of global e-commerce, a third of the world’s most successful tech start-ups and conducts 11 times more mobile payments than the United States.

There are challenges ahead, including healthcare for its ageing population, as well as making its economy sustainable and green.

Still, China is at the centre of Asia’s economic growth by increasing regional connectivity through its “Belt and Road Initiative”.

This will help turn Asia into the dominant global economic force, providing an estimated 52 per cent of global GDP by 2050. As a result, China is on course to overtake the United States as the world’s largest consumer market and economy.

Contributed by PETER WONG, deputy chairman and chief executive, The Hongkong and Shanghai Banking Corporation Limited.

After 17 years at the helm of AMCHAM here in Thailand, Executive Director Judy Benn is stepping down this month, having fulfilled her mission to build a diverse membership community guided by a meaningful purpose.

During these 17 years, Amcham transformed itself from an organisation composed primarily of blue-chip multinationals to a diverse cross-section of businesses operating in Thailand.

“When I first started as Executive Director in 2001, we had less than 500 members and the majority of them were US multinationals,” said Benn. “Today we have over 600 members, but less than 40 per cent of them are U.S. based. The rest are Thai or other foreign organisations.”

As world economies rebounded from the double whammy global financial crises in 1997 and 2008, Benn recognised the opportunity to increase the impact Amcham’s could have on the growth and influence of American business. Rather than limiting the role of Amcham to serving US multi nationals, however, Benn expanded its role to include any entity that could contribute to the welfare of American business.

To achieve this, she adopted a compelling purpose: “Our purpose became to attract members who were interested in supporting American business and the community here in Thailand,” said Benn. “We became more inclusive and expanded our reach.”

This purpose opened the door to a whole new category of members, including local Thai companies seeking partnerships with US multinationals, such as McThai, which holds the franchise rights of McDonalds, as well as American entrepreneurs looking to serve the Thai community, as in the case of Bourbon Street restaurant.

More recently, there has been stronger interest from Thai companies to join Amcham, who are looking to expand their presence overseas, such as Thai Union, said Benn.

To support this change, under Benn the Amcham has established a number of special interest committees, including Young Professionals and “SME” [Small & Medium Enterprises] that provide its diverse members with opportunities to learn about new trends and opportunities, as well as to continue networking.

To help serve communities, Benn also expanded several outreach programs, including a scholarship programme which offers 175 scholarships to qualifying underprivileged university students from rural provinces.

As Amcham looks to its future, there are other challenges and opportunities, such as how to leverage digital technologies, how to attract Millennials and entrepreneurs without alienating corporate audiences, and how to deal with the onslaught of Chinese and Japanese investors in Thailand. These are the issues Benn’s successor will have to address.

In the meantime, Amcham continues to thrive and prosper in its diversity. “The more the merrier,” said Benn. “As long as members are aligned with our purpose and abide by good business principles and rule of law.”

Contributed by LARRY CHAO, managing Director of Chao Group, an organisation change consultancy established in Bangkok and New York in 1995 [www.chaogroup.com]