China's economic model has a weak spot. Here's their plan to fix it.

Описание: China's the world's most dominant productive economy, but lags global peers in value chains. The giant trade surpluses accumulated by the Chinese factory and logistics sectors are largely negated by their deficits in business services.

Apple Corporation serves as a case example. Apple has outsourced almost all its production to China, while retaining product design and branding. But it's in those areas where most of the profits are realized: Apple's profit share of all the supply and value chain activities in the manufacturing of their devices is over 75%; Apple's partners in China earn just 25% of the channel profits.

Chinese policymakers are now focused on developing key "zero-to-one" industries, by dramatically increasing R&D as a share of corporate profits. And, they will push to eliminate many of the foreign companies that offer high-priced services that simply piggy-back on work Chinese companies are actually doing, such as logistics and trade finance. Strong examples here include foreign freight forwarders, who charge up to thousands of dollars in extra commissions and fees for EACH CONTAINER, though they perform few actual services themselves.

Resources and links:

Substack, for video transcript and direct links
https://open.substack.com/pub/kdwalms...

South China Morning Post, China urged to fix services ‘weak link’, increase investment in zero-to-one innovation
https://www.scmp.com/economy/china-ec...

SCMP, China’s economic powerhouse seeks AI, humanoid robotics, low-altitude economy upgrade
https://www.scmp.com/economy/china-ec...


SCMP, Chinese drone prepped for mass production as demand for aerial deliveries soars
https://www.scmp.com/economy/china-ec...

Value Chain In Supply Chain Management
https://qodenext.com/blog/what-is-val...

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Closing scene, Jinghong, Xishuangbanna, Yunnan