China’s Generation Y Comes of Age

If the economic recession a few years ago was any indication, the notion that only large companies are impacted by global market forces is outdated. Today’s small businesses and entrepreneurs operate among global customers, communication, competitive dynamics, supply chains and cultural influences. Asia and other emerging markets play a much larger role in shaping local businesses. As China increasingly engages American businesses, entrepreneurs can embrace new opportunities.

So far this year, cash-rich Chinese companies have acquired or formally partnered with several American startups and high profile companies. China acquired a high tech startup in online gaming. More US startups, American governors and trade missions are proactively working to attract Chinese investors. In another venture, General Electric plans to share aircraft manufacturing technology with Chinese counterparts. Other recent partnerships have included ventures in battery technology, life sciences, solar energy and clean coal technology. As China seeks to diversify into increasingly value added industries, American companies are learning more and more about Chinese companies, their structure and leadership.

Leading China’s rise on the world stage is its young people. China’s Generation Y is composed of roughly 250 million people born between 1980 and 1990. In the early 1980s, China implemented the one-child policy and instituted a series of reforms that set China on a path of rapid development and prosperity. The generation living in the times of those early changes became known as China’s Generation Y (also known as the Post-80s generation). They are China’s current consumers, capitalists and entrepreneurs and the future leaders of an economic superpower. 

China’s Generation Y has grown up in relative prosperity in contrast to their parents’ upbringing around the time of the Cultural Revolution. Access to higher education has exploded during their lifetimes, providing opportunities unseen decades ago. Under the one-child policy, single children received unrivalled attention from parents and grandparents, providing intergenerational wealth and what some in China call indulgent “Little Emperors.”

Today’s Generation Y in China is developing new products, media, ventures and patterns of socializing. Young people in China are technologically connected online, interacting online almost twice as much as their American and European counterparts.

With rising incomes and technical know-how, China’s Gen Y is purchasing American products and buying American brands. Young people dream of rewarding their success and treating their families with luxury products and global consumer branded goods, the new mark of success in a rapidly changing country. At the end of 2010, Apple Inc announced that it nearly quadrupled its year-on-year revenue in China largely because of the iPhone and iPad. Other companies are racing into China to meet the unmet needs of China’s young people.

Gen Y also desires to travel abroad to cities such as New York, enjoy a work/life balance and to become prosperous. For this reason, tourism officials in Hawaii, California and Nevada have announced their focus on attracting Chinese tourists given the double-digit annual growth in Chinese visits to the US witnessed over the past few years.

Young people are shaping not only the face of a modern China, but also education and labor markets in the US. Chinese students have flocked to American universities in record numbers over the past few years, becoming one of the largest contingents of foreign students. With the prospect of hundreds of thousands of Chinese students studying and working in the US, American companies are increasingly looking to China’s youth in search of talented employees.  

Over the next few years China is adapting its economy to deal with an ageing labor force, unemployment, inflation and environmental degradation. One potential way that China may address these pressures is to focus more on developing rural and midsized cities. With massive infrastructure projects and focus on undeveloped areas, China may continue building new economic opportunities and advantages. 

As China engages small business, entrepreneurs and small businesses can see new opportunities. Access to capital, building technological partnerships, HR recruitment, and developing knowledge partnerships are some ways small companies have seized new opportunities in competitive markets. Learning more about China’s rising young people can help small companies serve new markets and unmet needs.