The People’s Bank of China issues the 10-yuan Olympics commemorative bank note today. Astonishingly, there’re thousands of people waiting outside the local banks in many main cities since last night, in order to obtain the golden-like note. The price of the note has risen to 3000 RMB. However, it is would be difficult to imagine that China even had no qualification to participant the Olympics 30 years ago. As the process of the China’s reform and opening up, it makes the people witness the marvelous change of an excellent nation worldwide.

According to the recent report from Yahoo.com, it illustrates some evidences that China will take place of the United States as the biggest super power by the year of 2035. Different from the development of many NIC (newly-industrialized countries) and developing counties, the China’s economy is not merely driven by the export industries, such as textile, toy and clothing, but also by the vigorously domestic demands and other forms of economies. For instance, as the time goes by, a brand-new style of business system emerges, which is called outsourcing, consisted of ITO and BPO, may lead China’s economy in the future. BPOVIA, headquartered in Nanjing, is one of the successful companies which contributes a lot to the establishment and development of the outsourcing industry.

Furthermore, the report mentions a definition of PPP (purchasing power parity), which means the similar function as Big Mac Index. Agencies used to evaluate the purchasing power of currencies, based on the prices of the Big Mac in the McDonald’s chains all over world. The recent research showed that RMB is under-evaluated by more than 50%. Thus, as a matter of fact, the cost of living and goods is higher than it shows. Moreover, owing to the revaluation of RMB and the relatively-high CPI, dozens of export-oriented enterprises are put into deadlocks. Without the advantages of the cheap labor force and exchange rate, Chinese entrepreneurs should find a suitable solution to cope with the adversary. Fortunately, outsourcing industry successfully solve the problem. Based on the hi-tech and skilled staff, ITO and BPO firms could control their costs and provide more high qualities services worldwide. As the industry leading position, BPOVIA is engaged to optimize its service and promote the relation between customs and service providers, which seriously helps the enterprises avoid the routine of price competition, but focuses on the technology and talents.

Pursuing the opportunities of the time transition is fairly essential for the development of economies, such as the Netherlands, UK, Germany, Japan and U.S. Nowadays, China is just promoting its economy as what other super powers used to. The outsourcing industry will surly help Chinese economy to continue its prosperity, control the high CPI and eventually shift China to the summit of world stage.

Although we should not omit the problems on the political democracy, poverty, corruption, social equalities, and other social problems, we optimistically estimate China would eventually overtake the U.S in the near future.

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China's economy, outsourcing industry

With the high growth rate of China’s economy, the country’s target of doubling its GDP per capita by 2010 relative to 2000 level is under way.

According to a WTO report (drafted independently by the WTO Secretariat) released on May 21, China’s annual growth rate was estimated at 11.4%, higher than the average rate achieved during 2003-2006. Moreover, China has the potential and confidence to maintain this rapid growth in the foreseeable future. So the goal of doubling GDP that was set out in China’s eleventh Five-Year Plan is within reach.

Faced with a number of important social and economic challenges, including various economic imbalances, China also has to increase government expenditure on social services, like health and education, as well as basic pensions, thus possibly reducing the need for precautionary saving and raising consumption.

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China's economy, economic challenges, eleventh Five-Year Plan, GDP, WTO