KEY POINTS:
The major free-trade deal New Zealand will ink with China tomorrow needs to be put into some context.
China is undergoing a rapid transformation. By most estimates it will overtake the United States as the world's major growth engine sometime later this century.
But the changes will be profound. China will not be another US. It is not a democracy. Its commercial law settings are changing, but doing business there remains a challenge.
Strategist Alan Carroll believes New Zealand has done exceptionally well to score first-mover advantage - and now has to deal with the eight Ps which will shape China's future.
People
China will be the first major power to get old before it gets rich - more than 20 per cent of its population will be over 60 by 2030. The growth in the number of Chinese will slow, but there will still be about 1.49 billion in 2035 compared with 1.31 billion in 2005. China's strict one child per family policy will be gradually abandoned. Pollution Sustainable development is the buzz word in Beijing and "backward" plants will gradually by closed down. Beijing is spending US$13 billion ($16.5b) on a clean-up before the Olympic Games, but 70 per cent of the country's rivers and lakes are polluted, and 90 per cent of ground water in Chinese cities is tainted.
Protein
China's rapidly growing middle class will demand top-class proteins as pollution and water shortages affect food quality. New Zealand's free-trade deal will position food exporters such as Fonterra to capitalise on the market potential. Pulling power China will more than double its oil imports from 160 million tonnes annually to about 350 million tonnes to fuel the country's voracious appetite for energy. More New Zealand coal, aluminium, iron ore sands and gas will be demanded.
Party
The Chinese Communist Party will still dominate China's politics. But there will gradually be more democracy at grass roots level as China's new roadmap for political reform rolls out.
Prosperity
Young Chinese (Chuppies) will use mobile phones and the internet more. More of them will speak English - up to one-fifth of the population is learning the language. They'll have more cash to buy cars - in 2006 there were 7.3 million cars in China. But in 2035 there will be 542 million automobiles.
Protest
Shanghai is famous for its socialist capitalism. It's also where workers staged some of China's first strikes, and residents are concerned that plans to extend the Maglev train through their neighbourhoods will cause property values to plummet. If Nimbyism takes hold in the middle classes, it won't just be the peasants who revolt.
Power players
China will have another 30-40 companies in the Fortune 500 list on a revenue basis. It will also have enhanced its military power, but will still depend on imports for the most advanced systems.
Sources: BusinessWeek, Institute of Quantitative & Technical Economics of the Chinese Academy of Social Sciences, China Access
