China drives an interconnected world, with increasing "soft power"
The world is becoming more interconnected and China has been a major driver of that process, despite the pandemic and geopolitical challenges, McKinsey Global Institute, or MGI, said in Shanghai on Thursday.
Besides developing export and trade, China should strengthen "soft powers" covering service, intellectual property, data, capital and talent. For Shanghai, it's a key task to attract more overseas talent to the city after the pandemic, said MGI's report "Global flows: The ties that bind in an interconnected world" released on Thursday in Shanghai.
China currently lags behind in integration of the "soft power" flow. The country accounts for about 15 percent of global goods exports but less than 5 percent of service exports and intangible flows, said the report.
While global trade has stabilized, flows linked to knowledge and know-how are driving global integration. Flows of services, international students and intellectual property (IP) grew about twice as fast as goods flow in 2010-19. Data flows grew at nearly 50 percent annually, according to the report.
Shanghai should further improve visa and residency application processes and other business environment sectors to attract more expats to the city, said MGI's executives, including Kweilin Ellingrud, McKinsey's senior partner and MGI's director.
Ellingrud herself moved to Shanghai in September to support MGI's development in China and worldwide.
Multinational corporations also play a pivotal role in managing global flows to deliver both growth and resilience in an interconnected world. Multinationals account for about two-thirds of global exports, said MGI.
In February, a batch of 20 regional headquarters and 10 R&D centers of multinational enterprises were awarded official certificates in Shanghai. They cover key industrial sectors, including six biomedical companies, five intelligent manufacturing firms, five in automobile and auto parts, and seven in commerce, logistics and information service, according to the Shanghai government.
The event shows Shanghai's attitude in welcoming multinationals and talent.
Meanwhile, there are trends for deglobalizing with the Russia-Ukraine conflict and rising geopolitical tensions, like bans and acts in the semiconductor industry. But the major trend is a more interconnected world because "no region is close to being self-sufficient," said MGI.