China should stop focusing on labour- and capital-intensive activities, according to a newly released report from Deloitte.
The nation must invest its resources in activities that utilize knowledge, innovation, design, IT sciences, software, and marketing to survive in this tough global business environment.
China can succeed in the global aviation sector space if it gets relevant government support. Aerospace has been identified as a high-priority sector in China's growth plans and it can help the nation to penetrate a space currently dominated by the United States.
The nation can become a regional hub for high-value machinery and components and is positioned to become an important player in the pharmaceutical industry by 2025.
China can boost the nation's competitiveness and encourage the development of new mobile-specific industries by innovation in mobile gaming, communications, e-commerce, and shopping software and services.
"This report reaffirms the critical need of building a culture of innovation and stimulates thought-provoking sentiments for businesses to catch the next wave in China," said Dr Ernest Kan, chief-of-operations for Clients & Markets, Deloitte Singapore who also heads the Chinese Services Group for Deloitte Southeast Asia.
Expanding e-commerce sites
Additional growth opportunities within China's economy can be created by the expansion of e-commerce sites into other business sectors, such as financial services.
A combination of cloud computing and data analytics with business practices can transform the distribution sector into a fast-growing industry over the next two decades.
The Chinese government is continuously expanding its investment in healthcare. This expansion, along with construction of urban hospitals and rural clinics, could contribute to expenditures of US$1 trillion by 2020.
Expanding access to education has been identified as a critical factor in China's economic development.
China is facing a demand for more innovative and environmentally-friendly energy policies. The nation can tap this opportunity to address growing air pollution while fueling economic growth.
"We have witnessed a 7.5 percent growth in China's GDP in 2Q2014 where almost half of the GDP increase was driven by government stimulus of raised fixed asset investment to spur economic growth," said Dr Kan. "This stimulus has also made a positive boost to goods-producing and service industries which are both important for China to sustain transformation and economic progress in the next century."