- Emily Feng
- January 29, 2016
- 1,880 views
China gets a lot of flak, some of it deserved, some of it not. In recent weeks, outward criticism has centered on the country’s economic growth, or rather, its lack thereof.
During the first week of 2016, mainland China’s stocks suddenly dropped in value, triggering a “circuit breaker” mechanism that halted trading twice in a week. Global markets tumbled; the yuan fell further in value. The stock market failure fueled ongoing speculation that China’s slowing GDP growth (the slowest since 2009) are signs of a bigger economic meltdown.
However, only focusing on short-term economic statistics like present capital outflows or currency exchanges misses the bigger picture of China’s economic future. For a while, China’s political and business leaders have anticipated a slowdown in economic growth. Their long term plan of action has been to undertake the arduous task of reorienting the behemoth that is the Chinese economy.
Unfortunately, as the saying goes, you have to break some eggs to make an omelet. A portion of the economic turmoil we see now is a result of a long process of economic reform, comparable to what we saw with temporary mass unemployment and unrest after SOE reform in the 1990s.
In other words, all is not lost. In fact, much is to be gained as China’s economy slowly restructures itself from an export, manufacturing economic base to a more sophisticated service-oriented economy. Not without its own problems, urbanization will nonetheless also spur increased consumption and economic productivity among China’s population, further accelerating and edifying the country’s gradual shift to third tier service-oriented industries.
This shift from primary and secondary industry to tertiary (services-based) and even “quaternary” sector industry (information-based services) gives localization service providers (LSP) enormous opportunities for growth. Some of the fastest growing brands in China are technology, retail, and leisure brands like Apple, Nike, Starbucks, and P&G. As domestic consumption rises along with the growth of China’s middle class, newer brands, products, and services will all require LSP services to net rising Chinese consumer demand. The potential gains from this growth are huge. China’s rising middle class is forecast to approach about 600 million by 2020 which is twice the size of the current U.S. population. Currently, Chinese consumers spend about $1,400 – $1,600 a year; ambitious projections place future spending at three to five times that amount by 2025.
The flow of localization won’t just be from English, Spanish, German, etc. into Chinese. Rather, more and more Chinese companies will require outside localization service providers to take original Chinese products and documents and localize them for a global market as China’s economy matures. Perhaps the best sign of this burgeoning trend is China’s “Made in China 2025” plan, released in May 2015. The plan is an ambitious and far-reaching in scope; its chief aim is to upgrade China’s industrial sector and invest in innovation and research centers around the country.
Among its many explicitly stated goals is an emphasis on localization, with up to 70% of content and core components produced domestically by 2025. That means more and more high-tech products will be designed and manufactured within China. As the Chinese government concurrently pushes companies to “go out” and engage internationally, this means that an increasing volume of Chinese goods will need translation and localization services so as to enter international markets. These products won’t just be simple toys or knickknacks either, but rather things like computers, software packages, and advanced industrial equipment that will require highly professional localization services with technical expertise.
In tandem with China’s manufacturing upgrade, localization service providers will also have to upgrade their technology tools and solutions. “Made in China 2025” draws a large part of its inspiration from Germany’s Industry 4.0 plan, which emphasizes incorporating advances in the Internet of things, big data, automation, and interconnectivity between manufacturing processes. LSP translation tools will have to adapt to complement these new manufacturing processes and the content they produce. For example, more content will be digital and user-generated content – product descriptions, user reviews and comments, social media posts, blogs. Traditional translation tools and processes are not equipped to handle the volume, brevity, and platforms of such digital content.
Stepes’ “Big Translation” approach to handling content in the “big data” era is one such innovation; others will have to follow to create the technology infrastructure to handle the new global demand for translation.
A Chinese economic crash would be bad news for all of us. Fortunately, it’s not crashing any time soon but rather will grow in new ways going forward. For early-movers and visionaries, now is the time to invest in localization with China.