Chapter 20 Introduction to the Third Millennium Changes in China

Historian Rhodes Murphy said: "The division of historical periods is always a difficult problem for all historians, and the naming of historical periods is equally difficult." How should the process be divided? The productivity revolution is an eternal challenge that any country or economy will face, while the technological revolution is the main challenge that enterprises face at the micro level.As the famous management guru Peter Drucker said: "The age of technology is over - all industries are now technology-driven. Some industries may have the latest technology creators, and to survive, all industries must accept and correct Apply technology." Therefore, the macroeconomics in coping with the productivity revolution and the microeconomics in coping with technological challenges are interlinked.In order to illustrate an economy's response to the productivity revolution more vividly, I use the development stage of an enterprise in the basic industry environment of the technological revolution as a metaphor for the development stage of the economy.

Generally speaking, an enterprise has five stages of development: the first stage is the entrepreneurial stage: according to the business plan, initially establish the operating mechanism of the enterprise, and explore the profit model in practice; the second stage is the product stage: after finding the profit model , the product has been developed, and the main task is to coordinate the product function with the market demand; the third stage is the brand stage: the enterprise focuses on marketing and sales, and strives to plan and cultivate the brand in the highly competitive industry "red sea"; the fourth stage The stage is to continue to innovate and become an industry leader: to win tomorrow, enterprises cannot rely on competing with rivals, but must focus on technological innovation in the industry, open up new market space with huge demand, and maintain the "red ocean" position for a long time Leadership position; the fifth stage is to become a learning enterprise: the technology that changes the industry must come from outside the industry. In the case of continuous technological revolution, it is necessary to completely change the profit model, create a "blue ocean", breed a century-old store, and become a great enterprise .

Draw an analogy between the growth of a business and the economic growth of a republic. The first 30 years after the founding of the People's Republic of China (1949-1979) was the "Entrepreneurship Era".China regained its self-confidence and began to work hard to realize the "four modernizations". In the process of exploration, it learned from the planned economic system of the Soviet Union. The entry point chose capital-intensive heavy industrialization, and did not properly handle the relationship between investment and consumption. It suffered major setbacks, especially the serious losses of the "Great Leap Forward", the heavy price of the three-year difficult period, and the "Cultural Revolution" movement that seriously deviated from the work of economic construction.However, the great achievements in the first 30 years have greatly improved human capital unprecedentedly in Chinese history, and enabled the Chinese economy to break out of the "high-level dynamic equilibrium" of the millennium. Unprecedented growth.The first 30 years of the founding of the People's Republic of China can be said to be the "early stage of economic take-off" in Rostow's five-stage theory of economic development.The second 30 years after the founding of the People's Republic of China (1979-2009) was the "price era".

China embarked on the road of reform and opening up at the end of 1978, gradually transforming the economy from a socialist planned economy system to a socialist market economy system, and the economic system reform produced an unexpected supply response.China's manufacturing industry starts from the middle and low end of the international manufacturing industry chain, and "China's price" has become a hard power, gradually developing into a "world workshop".However, most Chinese manufacturing companies have not yet formed their own international brands. The second 30 years after the founding of the People's Republic of China was the "economic take-off" period.The 20 years from 2009, that is, from the 60th year of the founding of the People's Republic of China to the 80th year of the founding of the People's Republic of China (2009-2029), is the "brand era", which corresponds to the "maturity period" of Rostow's theory. China's manufacturing technology level will lead the world's manufacturing industry , a large number of international brands appeared, and the products were exquisite and perfect. The "world workshop" was upgraded to "the world factory".From the 80th year of the founding of the People's Republic of China to the 100th year of the founding of the People's Republic of China (2029-2049) is the "innovation era". China has become an "innovative country" and built a "learning economy". The moderate rise of "China's consumption" in the leading "China's new economy" corresponds to a certain extent with the "high-quantity consumption period" of Rostow's theory.Combining the above stages of economic development, China has completed the second economic revolution after the agricultural revolution in the 60 years since the founding of the People's Republic of China, which is a "great change in China's economy".

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Notes: .The book states: "The existing market is composed of two oceans. The red ocean represents all the industries that exist today, that is, the market space we know; the blue ocean represents the industries that do not exist today, that is, the unknown market space."— — Editor's note