In a wide-ranging discussion on the future of China's economy in a post-COVID world, economists from Tsinghua University in Beijing and private equity firm PAG agreed the country's economic landscape will likely change as the world comes out of lockdown. 

Weijian Shan, chair and CEO of Hong Kong investment firm PAG, said in a webinar hosted by London's Financial Times that, while China's state-owned enterprises (SOEs) are currently more cash-rich than private firms, longer-term growth will need private sector productivity to rise. 

"Going forward, China's growth will depend much more on improvement, on efficiencies, both efficiency in the allocation of resources and efficiency in productivity. And to do so, I think you won't come through without the private sector," Weijian said. 

His view was backed up by Min Zhu, the chair of the National Institute of Financial Research at Tsinghua, who also predicted a future with a more mixed economy. 

"You will see the line between these two sectors become blurred, because China is going to carry out more SOE reform in the sense of a mixed-ownership structure – so to open the door, bring in the private sector, invest in SOEs and also bringing the private capital into the more resource-oriented sectors," Zhu explained. 

While the economists disagreed on the exact shape of China's recovery from the pandemic, the consensus remains that changes are coming to the globalized economy due to the weaknesses it has shown during the pandemic. 

Despite China's reopening of its domestic economy, Weijian Shan warned investors that a full rebound is reliant on the world economy. 

"China is not going to go back to normal until the rest of the world has come back to normal. Because China also relies on the rest of the world, an integrated global economy," he explained. 

Instead of stagnation, however, this realization that the truly global economy may take some time to reawaken may result in an internal stimulus, according to Zhu. 

"Reshaping the global supply chain is inevitable. I think that's happening. It will happen more now," he said. 

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[This article was updated on 15/5/2020 to correct the spelling of PAG in the first paragraph]