BEIJING: China’s business outlook remains difficult but too important for many multinational companies to ignore, according to senior McKinsey leaders Joe Ngai and Nick Leung.
Ngai, chairman of McKinsey’s Greater China offices, told CNBC that foreign companies are comparing current conditions with roughly two decades when many enjoyed unusually strong market positions in China.
Local companies now compete more aggressively across consumer, industrial and technology sectors. Ngai and Leung make the broader case in their book “The Next China Is Still China,” published by Scribner on June 16.
McKinsey describes the book as a new strategy guide for businesses facing slower growth, demographic shifts and greater geopolitical risk.
The authors reject the view that China is inevitably heading toward Japan-style stagnation or a complete economic split from the United States.
Instead, they point to China’s manufacturing scale, technology investment and large consumer market as reasons companies still need a long-term strategy for the country.
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Foreign companies nevertheless face a tougher operating environment. CNBC reported that consumer spending growth has slowed from pre-pandemic rates, while some US companies have reduced their exposure or sought local partners.
Ngai said many businesses are discussing deals with Chinese private equity firms, although talks currently outnumber completed transactions.
McKinsey’s Greater China practice also says companies can no longer rely on strategies that worked during China’s earlier high-growth period.
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Its current guidance emphasises adapting products, operations and investment decisions to stronger domestic competition and changing consumer demand.
