Common prosperity will guide the Chinese government's policies towards a more equal society. China is expected to issue substantial policies improving workers’ benefits and providing more comprehensive social welfare while strengthening prosecution of illegal incomes of the wealthy. In 2022, the negative short-term effects for businesses caused by higher labor costs might dominate, but a growing middle-class with high purchasing power can create a new customer base in the long term.
Von
Enforcement of cyber and data security regulations will further ramp up in 2022 and beyond as China prepares for launching its digital economy into a higher orbit. While China moves along its digital path, it also fortifies its regulatory framework, creating significant compliance and operational challenges that companies need to be keenly aware of.
Von
China will selectively improve market access to keep attracting foreign investment. But “buy local” preferences will continue in sectors that China’s government sees as strategic to national security. Once in the market, companies will be bound even tighter to strictly follow China’s market rules as the government rolls out more data-driven market governance tools.
Von
The 20th party congress in fall 2022 will see some major personnel shakeups in China’s central political system. Xi will likely receive a third term. A generational change is underway, as about half of the Central Committee members have hit the age ceiling for nomination. Before this political transition is done, don’t expect policy surprises. But do watch out for the themes highlighted in the post-congress presidential speech.
Von Redaktion Table
Supply chain management will continue to have hard times in 2022. Given the Winter Olympics and Party Congress, China’s government will not veer away from its Zero-Covid strategy, risking closure of production sites and delivery delays. In addition, geopolitical tensions increasingly put companies at the crossroads between complying with US/EU laws and avoiding the ire of the Chinese government.
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