BOAO, China — China's economic reform efforts could create hardship, said Hans-Paul Bürkner, chairman of Boston Consulting Group.
The government is working to transition the economy away from China's old growth model — driven by manufacturing and exports — toward one supported via services sectors like healthcare and IT. But that means cutting back on overcapacity in areas like coal and steel, and retraining millions of workers to take on new vocations — a major challenge that could create social unrest.
"Some people will lose jobs … it creates hardship," Bürkner told CNBC. "It's not easy to train coal miners and make them become software engineers. I've never seen that happening anywhere in the world."
It will take delicate maneuvering, and it's these painful strategic reforms that Beijing must implement in order to sustain economic momentum and to continue attracting foreign investment into China.