Bart Horsten in the VRT podcast ‘China beyond the wall’

On 27 February 2024 Bart Horsten contributed to the podcast ‘China beyond the wall’, operated by the Belgian national television and radio station VRT and hosted by VRT journalists and China experts Veerle De Vos and Tom Van de Weghe. The full recording (in Dutch only) can be listened through this link.

The topic of this edition was China’s situation after 3 years of Covid and what China has learned from this crisis.

In this article we have translated Bart’s remarks during the podcast.

About the criticism of the Chinese people on the government’s Covid-policy:

Especially the so-called ‘millennial’ generation, which has known a country that has grown extremely fast, now realizes that they could lose their job or their company could go bankrupt. You must imagine, those people come from a time where they have known unlimited growth for 20 consecutive years. Suddenly they have a setback, which is not something they are used to, so it is normal that you react a bit negatively.

About the growing challenges for foreign companies in China and the slower-than-expected recovery of the Chinese economy:

I honestly expected the Chinese economy to recover more quickly after the Covid pandemic. China has turned back on itself much more. And that has made it a lot more difficult for Western and Belgian companies doing business in China.

The Chinese are no longer waiting for us. It is no longer the case that, by definition, if you come from abroad, you automatically have an advantage. Chinese consumers are cutting back on their spending much more and have become much more price sensitive. A Chinese consumer is not simply going to pay a higher price for a foreign product. It really must be a better or higher quality niche product.

I also notice that several established companies in China (foreign companies that have been active in China for some time) are experiencing increased local competition. The Chinese market has not stood still over the past 3-4 years. It is increasingly ‘China for China’.

As far as the economic situation is concerned, I am not so pessimistic. Do not underestimate the resilience of Chinese entrepreneurs. If you look at that a little deeper, I still feel that dynamism, that entrepreneurial spirit, that drive for innovation in China. OK, it will take time, but I am optimistic that China can resume its strong growth in the long term.

About the ‘going global’ strategy of the Chinese government and companies:

There is another striking trend since the Covid pandemic. Not only Chinese citizens, but also Chinese companies are ‘going global’. Chinese companies are being pushed to go more global, i.e. to look for more foreign projects. We saw this in 2023 at trade fairs in Europe: I almost felt like I was in China, a lot of Chinese visitors, a lot of Chinese exhibitors. This indicates that they really have the ambition to go abroad. Ultimately, there may be opportunities for EU companies to collaborate intelligently, on the one hand discovering opportunities in the Chinese market, but also exploring certain opportunities internationally.

Has China learned lessons from the Covid pandemic?

In conclusion, what lessons has China learned from the Covid pandemic? I think they will definitely do it differently. Just like us here, the Chinese have also learned in the field of vaccinations, the way they have approached it. However, I have learned in the meantime that what I think about China or what I expect from China always turns out differently. In that respect it is always difficult to predict. And that makes China just as fascinating.