Why China’s Future is Uncertain—and Intriguing

Photo of a walkway with a Chinese building and lanterns and skyscrapers in the smoggy distance
© 2011 Sharon Drummond CC BY-NC-SA 2.0SA 2.0

What makes China so compelling?  Its sheer size (9.6 million square kilometers and 1.35 billion people)?  Its history as an ancient and culturally rich civilization?  Its current challenges, opportunities, and ambitions—and their potential impact on our shared future?  For me the answer is simple; all of the above.

The recent celebrations of the Lunar New Year brought to mind a fascinating scenario workshop on China that I co-designed 10 years ago as a member of Global Business Network, a scenario consultancy that has since merged with Deloitte. We brought together a dozen experts along with 50 strategists and managers from different companies and government agencies to explore the question: 

In the decade ahead, would China emerge as a “rule taker” or a “rule maker?” What implications might that have for business and government in a global economy?

Our deliberations spanned a wide array of social, technological, economic, environmental, and political issues and trends that highlighted China’s complexity and contradictions.  At the same time, we had to consider China’s future in the context of a global geopolitical climate that might ricochet from stormy and divisive to coherent and collaborative.

In constructing our different scenarios, we focused on the following critical uncertainties:

  • China’s impact on the global economy: revolutionary or evolutionary?
  • Economic growth: strong or weak?
  • Banking system: collapses or reforms/strengthens?
  • Level of innovation: trendsetter or follower?
  • Sources of dynamism: external or internal?
  • Public health system: inadequate or sufficient?
  • Population and societal change: highly disruptive or accommodated?
  • Energy and resource requirements: manageable or increasingly unmanageable?
  • Environmental challenges: overwhelming or under control?
  • Relationship with the US: increasingly hostile or collaborative?
  • Military and strategic orientation: global/expansionist or regional/offensive?
  • Rule of law: orderly/rule-based or particularist?
  • Influence on Asia: increasing or status quo?
  • Decentralization of governance: mainly dysfunctional or functional?

Not surprisingly, the futures that emerged from this scenario exercise were divergent, challenging—and yet, highly plausible. A number of key themes emerged: Would China’s center hold? Would change—economic, social, political—be evolutionary or revolutionary? Would the pressures and consequences of development be sources of innovation or instability? Although there was no way to predict one future for China, the exercise highlighted the value of seeking out reliable information, diverse perspectives, and opportunities to experiment. It also forced us to challenge our own assumptions about China and about the sustainability of old models and “rules of the game” in our dynamic global economy.

Photo of a Chinese temple in a garden with skyscrapers in the background

Looking back at this work after 10 years—and a global recession—it’s remarkable to see how steady China’s progress has been on so many fronts, even though most of these uncertainties are still very much in play. Some—such as environmental challenges—seem more critical than ever. Others, such as economic growth, require reframing—for example, to focus on the pace of China’s transition from a manufacturing to a knowledge-based economy. And new uncertainties have clearly emerged, given changes in China and the rest of the world.

At Worldview Stanford, we are excited about exploring China’s critical uncertainties as part of our upcoming course on “The Futures of China to 2025.” The course opens online on August 24, 2014 and culminates in Beijing-based field trips and a scenario exercise at the Stanford Center at Peking University, October 15-17. In the coming months, we also look forward to sharing what we’re learning and thinking in our blog.

What forces do you think will shape China’s future in the next decade? Which are most important and most uncertain? How might these uncertainties interact to create unexpected futures for China—and what could that mean for our organizations?

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