Zhou Xiaochuan, the Chinese central bank governor, today said that a push by Chinese groups to acquire companies abroad was matched by a desire to attain international business standards.
“Chinese companies are now looking more and more at global competition,” Zhou told the World Economic Forum in Davos.
But as they expand abroad, the firms were learning to speak a “common business language” that included “common standards, financial reports, and OECD corporate governance principles,” he said.
China is not yet a member of the Organisation for Economic Cooperation and Development, which includes 30 of the world’s most developed nations. However, the central bank governor stressed that the Chinese business community was keen to pick up international best practices.
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“It’s still at a learning stage, a preliminary stage there is great room for further improvement.”
Speaking at the same event, Deepak Advani of the Chinese computer group Lenovo’s US unit underscored a change in the Chinese industrial focus, saying: “There is a shift happening, from manufactured in China to designed in China.”
Mr Zhou also said that the government was working on boosting internal Chinese demand to provide the economy with a pillar of growth to complement exports that have run up the country’s trade surplus.
“China is now undertaking several reforms related to the safety net ... pension reform, medical reform, the education system,” he said.
Chinese do not currently feel enough certainty to be willing to spend on credit, and their savings rate is around 40 per cent of gross domestic product, much higher than in western economies, Mr Zhou said.
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Officials felt China should accelerate the reforms “to reduce so-called precautionary savings to bring savings rates down to the normal percentage of our GDP.
“We would like to expand domestic consumption, especially household consumption,” Mr Zhou said, adding that the government was determined to “accelerate the rate of service sector development.”
He said: “Domestic demand, to some extent, must reduce the trade surplus.” That would also help reduce the country’s huge level of foreign currency reserves, he added.