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  • Fundamental changes to China's economy

  • have brought about extraordinary growth over the past 30 years.

  • Now China's leaders face a challenge

  • of making that growth more sustainable in the years to come.

  • Part of their strategy

  • is the opening up of the country's currency -

  • the renminbi or RMB -

  • to the rest of the world.

  • I've come here to Wuhan in central China.

  • This is a city of more than 10 million people.

  • If you want to see the real China and understand its economy,

  • this is one of the places to come.

  • I want to meet some of the people behind this growth

  • and find out how the renminbi will play a part

  • in the next stage of the country's development.

  • Mr Luo, what did the place behind me look like 20 years ago?

  • This place was the countryside where farmers grew vegetables and crops.

  • It looked very different to the city.

  • But with industrial development taking place over there,

  • we now have new buildings and factories.

  • The urban and rural areas are connected. There isn't a dividing line now.

  • This is a clear manifestation of strong economic growth.

  • At the heart of Wuhan's expansion is the construction of 13 metro lines.

  • When do you estimate all lines will be completed?

  • I think all 13 lines will be open by 2015.

  • Now we are bidding for five high-speed railway projects.

  • Wuhan may not have the glamour of Beijing or Shanghai,

  • but economists say it's this city and hundreds of others like it

  • that hold the key to China's future growth.

  • When you see Wuhan today, it's like a giant construction site

  • and almost like a ghost town.

  • But maybe 10 years later, it will become something like Shanghai's Pudong.

  • One of the most important engines for China's growth

  • is, really, the migrant workers.

  • There are no opportunities in the villages,

  • so they come to the cities.

  • Today, in Chinese cities, if 200 million migrant workers went back home,

  • the city would not run.

  • That's the secret of China's growth.

  • I used to live in Jiangsu and had never been to Wuhan.

  • It takes 11 to 12 hours by coach from Jiangsu to Wuhan.

  • Why didn't you stay in your home town?

  • As I work in the clothing industry and Wuhan has many clothing businesses,

  • it has more job opportunities for me.

  • Also, the pay here is higher than back home.

  • What Miss She has done is the same as millions of others.

  • She has taken the journey from countryside to city

  • in search of a better life.

  • That trend of urbanisation is driven by companies like her employer,

  • the Lovegod Group.

  • If they keep growing, the workers keep coming.

  • Lovegod Group's CEO and founder is Miss Hu Aidi

  • and she is confident the growth will continue.

  • Wuhan Lovegod Group was founded in 1995.

  • We have Lovegod shops

  • in premium department stores

  • in 98% of cities across China.

  • Do you manufacture products for others?

  • 90% of our exported products

  • are manufactured for other brands,

  • for example, H&M, Zara, among many others.

  • Meanwhile, we're exporting and promoting our own Lovegod brand.

  • For your transactions with foreign businesses,

  • have you ever considered using RMB?

  • We have talked about it with our clients,

  • especially our major European ones.

  • Their response has been positive.

  • For example, H&M settles some of the small trade in RMB.

  • Has HSBC been able to help the client transact in RMB?

  • Do you know what?

  • The Lovegod Group came to us for help

  • to mitigate its foreign exchange risk.

  • We at HSBC have a presence in over 88 countries in the world.

  • So, for example, we can ask a German colleague for help,

  • to talk with the Lovegod Group's end buyers.

  • And if their buyers are willing to pay in RMB,

  • the Lovegod Group can provide better terms and pricing for the buyers,

  • so it's a win-win situation.

  • People should be ready for the day when the RMB becomes a global currency,

  • like the US dollar or euro,

  • and is used in trade settlement.

  • Hu Aidi is making plans for the future.

  • She's building and investing for significant international growth.

  • I was born and raised in Wuhan.

  • The headquarters has always been based here.

  • We've almost finished our new industrial park

  • and if we can move in next year,

  • we will be able to set a three-year target

  • to double our current revenue of 1.45 billion.

  • How do you see the future of the Group?

  • We are driven to make Lovegod an international brand.

  • As companies like the Lovegod Group grow,

  • so does Wuhan itself.

  • This is no boom town.

  • The city is planning for the future and building for the long term.

  • The Chinese people, for the last 30 years...

  • What they have been trying to do is feed themselves,

  • but now the situation has changed.

  • The Chinese now are getting richer and richer.

  • They want to consume,

  • and they want to consume, not necessarily in China.

  • When they spend, they have RMB.

  • The Chinese will consume,

  • and that consumption will basically become

  • the main engine for the global economy.

  • It's clear that the last 30 years of strong economic growth

  • is powering the international use of the renminbi.

  • And now, it's the renminbi that will power China's economy

  • as it moves into its next stage of growth

  • in the coming years.

Fundamental changes to China's economy

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