Chinese competitiveness offers 'Opportunity 2.0' for global businesses, McKinsey exec says

China's growing competitiveness in advanced manufacturing, clean energy, artificial intelligence and robotics is creating new opportunities for multinational companies, according to Joe Ngai, chairman of McKinsey Greater China, who spoke during the 17th Annual Meeting of the New Champions, also known as the Summer Davos Forum, held in Dalian, Liaoning province.

"In many areas of industrial development, especially in high tech manufacturing, clean energy, and the usage of AI, robotics, I think the Chinese industry is indisputably in the leading edge of global development," Ngai said.

Ngai made the remarks on Wednesday after attending the opening ceremony of the Summer Davos Forum, where Premier Li Qiang delivered a keynote speech.

Ngai noted that the gap between China's leading companies and many of their global peers continues to widen.

"Every day the gap actually gets wider between what the best Chinese companies are doing and what, I would say, the average global companies are doing," he said.

Against this backdrop, multinational corporations face two strategic choices, Ngai said: either improve their own competitiveness against Chinese companies or collaborate with them to benefit from their strengths.

Ngai argued that the latter option remains underappreciated by many global businesses.

"I do think that the biggest underappreciated area is how to incorporate the Chinese competitiveness as part of my business and industrial ecosystem, so that I can raise my competitiveness even faster, that I can get to the goals set by industrial policy even faster," he said.

According to Ngai, Chinese companies are increasingly exporting not only products, but also intellectual property, operational know-how and industrial processes.

"I think Chinese companies are exporting a lot of their intellectual properties, their methodologies, their processes. China is becoming the factory for factories," he said.

Such capabilities can serve as a powerful accelerator for global competitiveness, he added.

"There are many ways of how leveraging the Chinese ecosystem can actually be an accelerator for global competitiveness. I think that's what the Premier means when he says that this is Opportunity 2.0 that China offers the rest of the world," Ngai said.

Drawing on themes from his book The Next China is Still China, Ngai described China as "the world's most competitive gym", where intense market competition has helped create globally competitive companies.

"As I've said in my book 'The Next China is Still China', China is the world's most competitive gym," he said.

Ngai noted that Chinese companies have become world-class leaders through fierce domestic competition.

While acknowledging the contribution of government support policies to industrial development, Ngai stressed that entrepreneurship remains the most important factor behind China's achievements.

"As I reflect on the Dalian Forum, I see this very much as an entrepreneurship. It is the entrepreneurial energy, capabilities of Chinese entrepreneurs that created these world-class companies," he said.

"I think that entrepreneurial energy is also the primary driving force behind building the economic environment and industrial ecosystem that underpins China's current competitive strength," he added.