Academic literature on the topic 'Business education China Case studies'

In recent years, although the total funding for higher education by the Chinese government has been increasing year by year, there are still some problems, such as the unreasonable allocation of regional resources and poor funding efficiency. Therefore, it is necessary to evaluate the performance management and analyze government funding in higher education (GFHE). Based on the data envelopment analysis (DEA) model, this paper evaluates the performance of GFHE in 29 provinces in eastern, central, and western areas of China. An empirical analysis is conducted on the influencing factors using the panel Tobit regression model. The results show that from 2008 to 2020, GFHE performance in China is generally high, but offers a “W-shaped” fluctuation rising state. There are significant differences in the performance of different areas, and the scale level of GFHE in the three areas is not wholly consistent with the performance level. In further studies, the performance level of the 29 provinces is divided into three degrees, which are distributed in all three areas. The study also found that the influencing factors of GFHE performance in central, eastern, and western China are also different, and analyzed the positive and negative effects of influencing factors in each area. Finally, the study tests the theoretical hypothesis, and the results are robust.

Purpose The purpose of this paper is to investigate the institutions involved in providing experience to entrepreneurs in China and analyzed the types of experience they provide. Moreover, the abilities of related organizations to shape experience were analyzed. Design/methodology/approach By using a multiple case study method, this qualitative study examined various entrepreneurial experience providers (namely incubator, entrepreneurship training institution, franchise store, entrepreneurship training network, and family business experience transfer) to understand the experience types and their supplying competencies. Findings On the basis of the types of entrepreneurial experience and the criteria for entrepreneurial competency assessment, the study results showed that the primary providers in China are the Start Your Business (SYB) program, incubators, and family businesses. Furthermore, for-profit social training organizations provided less experience than did governmental or private ones. The five providers mainly provided “know-what” entrepreneurial experience. Among the providers, family businesses and SYB offered experience that was conducive to entrepreneurial learning. Research limitations/implications Entrepreneurs are the subjects of entrepreneurship education, while this study mainly focused on analyzing the experience supplying competencies. Thus, future studies should explore the required abilities that are developed during entrepreneurship for various learners. Practical implications This study interpreted how to achieve Chinese mass entrepreneurship and innovation strategy in the context of the low development of entrepreneurship higher education. To improve their competencies in providing experience, providers must focus on developing proper curricula, effective transfer methods and teacher resources, and incorporating entrepreneurship education. Originality/value On the basis of social learning theory and human capital theory, this study developed a set of criteria for the assessment of the ability of entrepreneurial experience providers. This study analyzed how related institutions enhanced entrepreneurial experience, thereby expanding the relevant learning channels and providing options for entrepreneurs to accumulate experience in China.

The use of live case studies in business education is growing. Mixing realism entices students to think critically in an unpredictable environment. Live cases are often deemed appropriate for international business and strategic cases. This study reflects on an experience in which a live case study was used as a mechanism to invite students, unpredictably, to consider an ethical dilemma in international business. The live case incorporates the notion of sustainability, ethics and global business development. For one semester, a senior business course in international marketing was charged with the task of finding a strategy to export bottled water to China, from a Canadian source. In the process, some students won their way to China to assess how a strategy can be implemented first-hand. The experience shows that students were conflicted with the underlying principles of the mandate which involved exporting a natural resource abroad. Given that they were asked to share information with their competing colleagues (co-opetition), students themselves faced an ethical dilemma on a personal level. Some limitations and suggestions for future research are made.

The research underpinned the assessment of the link between professional business education and job performance along with career progression in the case of Karachi, Pakistan. The research further tested the moderation of satisfaction level of stakeholders. The research design of the study was quantitative whilst the sample size of the study was 250 respondents of Karachi as the research used the primary method of data collection using a survey questionnaire. The techniques employed are correlation analysis, regression analysis and moderation analysis using hierarchical regression. The software used was SPSS. The results found that the effect on professional business education on job performance and career progression was found to be significant in the case of Karachi, Pakistan. Moreover, the moderation was also found to be significant of satisfaction level of stakeholders including corporate personalities, managers, students, and teachers between professional business education and job performance. However, moderation was insignificant between professional business education and career progression. The research was limited to Karachi, Pakistan and to the domain of professional business studies. In future, the improvements can be brought by conducting comparative research between Pakistan and other developing nations like China, India or others. The research has added value to business studies conducted in the context of Pakistan and specifically Karachi. It has further contributed to the body of knowledge by making it avid how stakeholders generally perceive students seeking professional education in Pakistan.

This study empirically tests the joint impact of trust, e-commerce diffusion and organisational capacity and collaboration and investigates the effect of the interaction among them on business performance. Basing on the literature review and seven pilot case studies, this research conducted hypotheses and mediation tests for collaboration and e-collaboration in interactive with two facilitating roles from trust and organisational capacity on business performance. Data analysis is based on a usable dataset of 395 responses (valid response rate of 79%) collected from the perspectives of CEOs and senior managers in Wenzhou China manufacturing electrical industry cluster. This research is supported by Department of Education of Zhejiang Province Foundation (Y201328223) and Priority Academic Program Development of Zhejiang Higher Education Institutions -Business Administration. Results indicate that collaboration plays a full mediator between the trust and business performance, as well as between organisational capacities and business performance; and e-business diffusion not significantly affect the output of collaboration. This result may be rationalized by the inability of these organisations to nurture an e-business diffusion culture and organisational process effectiveness in making collaboration with their trading partners and the organisations do not give attention to the with partners. The empirical evidence from this research implied that, e-business facilitated business interactions require sound organisational capacities and trusted relationship in managing wide value-chain wide interorganisational collaboration.

With the development of information technology, Many Internet enterprises have emerged rapidly, and to thrive in the face of fierce competition, it is vital for them to have efficient business models. These business models are a popular focus of research interest. At present, there is still no unified interpretation of the business model system of Internet enterprises. The existing theoretical research examines mainly individual enterprises; there are only a very few studies on the business models of platform enterprises. This study therefore aims to summarize the literature on the basis of existing theories combined with the enterprise reality, through a literature review and case study of the Tencent group of companies in China. This study explores the online trading platform for enterprises and its business model.It is instructive to correctly analyze the Internet business model of enterprises in the third party service platform enterprises.

PurposeAt present, in the increasingly global markets, one of the main challenges to international business is how to effectively manage human resources across cultural boundaries. In particular, high‐tech MNCs demand a specific pool of talented individuals with specific technical expertise and personal skills to be adapted to operate in an international arena. That is especially true in the case of China, which has attracted a significant variety of foreign investments from diverse countries and whose people management policies and managerial staff technical and personal skills are reported in some cases to be at a primary stage. The purpose of this paper is to explore the educational context development in China and its related influence on the recruitment and selection process in Western high‐tech MNCs in the People's Republic of China (PRC).Design/methodology/approachThis is a research paper based on multiple case studies and direct face‐to‐face interviews.FindingsChina needs highly trained and highly educated individuals who can work in a dynamic domestic and global marketplace. Under the centrally planned system, the curricula in different universities are not associated to diversification in response to China changing economic needs and scenario. In most of the Chinese universities, many of the disciplines are very narrowly defined because these institutions are responsible for the job assignment of graduates. Despite the unprecedented growth of Chinese higher education thanks to the recent government reforms, the educational system in China still needs to be further restructured in its curricula to provide a sufficient number of qualified managers but however it will take time.Originality/valueNowadays, China needs highly trained and highly educated talents who can work in a domestic highly globalised marketplace. The underlying study will provide insight into those education related factors and their impact on the labour market in China with a specific focus on the search for appropriate technomanagement talents. The paper also provides insights into those educational factors, which produce satisfactory and less‐satisfactory results in recruitment of local talents in foreign technology companies. It also suggests the need for further research in the talent management area and education in PRC in relation to the current lack of data. Recommendations for the possible integration of appropriate educational projects aiming at developing highly talented individuals into those foreign corporations are provided.

The primary objective of this study was to investigate the migration intentions of foreign students and to have a better understanding of their life experiences in eastern China with a focus to Anhui province. A questionnaire survey sent to foreign students studying in Anhui province and depth interviews were used to investigate these migration intentions. Screening method was employed to all 527 participants and only464respondents were considered for further analysis. The results show that few students arrive in Anhui with the intention of immigrating permanently. Various factors including business opportunities, security and personal factors among many others influence them in decision- making process. The results reveal that there is no significant intentions to stay permanently however, there exist instances with a slight increase in the length of stay from 0% (initial) to 1.9% (after two years) and a steady variation of 30% of all respondents who wish to stay for short -period ranging between 2-3 years was noted. On the other hand, family and societal factors as well as length of stay was seen to be the high contributing factors leading to 58% of all respondents’ decision to go back to their home countries immediately after completion of studies. Furthermore, results show that there is a gap in Chinese education system on human racial equality leading to lower satisfaction of African students living in China which may threaten China’s sustainable economic growth image in African market. This study is helpful for policy makers and education system upgrade plans. However, following the area limitation used herein, there remains need for further studies on the subject using large scale to avoid generalizations made in this study.

The fine-grained population distributions of different age groups are crucial for urban planning applications. With the development of information and communication technology (ICT), detailed population data retrieved from various big data sources, especially on a fine scale, have been extensively used for urban planning. However, studies estimating the detailed population distributions of different age groups are still lacking. This study constructs a framework to generate fine-grained population data for different age groups and explores the influence of various factors on the distributions of different age groups. The population is divided into the following four age groups: (1) early adulthood people: 18 ≤ age ≤ 24, (2) young people: 25 ≤ age ≤ 39, (3) middle-aged people: 40 ≤ age ≤ 59, and (4) elderly people: 60 ≤ age. The results indicate that education and accommodation factors have a major influence on the distributions of early adulthood and elderly people, respectively. Business, restaurant, and accommodation factors are the main factors influencing the population distributions of young and middle-aged people. The accommodation factor plays a major controlling role at night, and its explanatory power gradually decreases during the day, while the explanatory powers of the business and restaurant factors increase and become leading factors during the day. Specifically, the hospital factor has a greater effect on the distribution of elderly people. The entertainment factor has very little explanatory power for the population distributions of the different age groups.

Purpose The singularity of being the first Chinese manufacturer of drug-eluting stents to arrive in Brazil and the country being selected as the company's first experience outside its home country motivated the interest in the study of this case, vis-à-vis with the characteristic of internationalization medical device companies according to the Uppsala model. Considering this context, the following research question was outlined: “How did Microport internationalize before the distribution of its stents product in Brazil?” The aim of the study is to investigate Microport's internationalization process for the distribution of its drug-eluting stents in Brazil. Design/methodology/approach Exploratory research under the qualitative method was adopted. It chose the single case study as a procedure for data collection, as it is a revealing, exemplary subject that offers opportunities for access to unusual research. The company MicroPort was chosen because in the period when Chinese medical device companies were focused on gaining market share in China, MicroPort began its international expansion, choosing Brazil as the first country to have its own subsidiary. It consists in the case of the internationalization of a high-tech EMNE in an emerging country that has institutional and cultural differences. Findings Taking advantage of new technology in highly internationalized environments favors its insertion; the internationalization of medical technology can expand according to the Uppsala Model, which does not explain internationalization, but rather its evolution. Cultural and behavioral issues reinforce that the development of the market for medical devices depends on local perspectives and values. The formation of an ecosystem in the local market for internationalization is observed. One implication of the study is that MicroPort's experience and the application of the Uppsala model for international expansion can serve as an important learning experience for Brazilian multinational companies. Research limitations/implications Empirical analysis carried out in the context of a single company. Although the results can be used as lessons learned from the application of the Uppsala model for international expansion of EMNE in an emerging market, caution should be exercised when generalizing its findings. Future studies could carry out comparative cases considering other emerging multinational companies, from the same sector or even from different industries, investing in other emerging markets. There is a limitation of the fact that the case studied does not explore the concepts of the later stages of the Uppsala model. Practical implications High-tech EMNEs internationalizing in other markets need to adopt aggressive strategies. The need to adopt different strategies for supply chain operations according to the specificities of the markets in which they operate. Important contributions to the Uppsala model, with regard to the process of passing stages, learning and networking. The findings of this study have similarities to the process described as a sequence of distinct phases of activities. Social implications A local top management team is essential to deal with institutional issues of government agencies when EMNE is internationalized in a culturally distant market. When there are major institutional differences between the country of origin and the host country, the autonomy in the management of the foreign subsidiary positively influences the acceleration of the internationalization process of companies in the high-tech sector. When there are major institutional differences between the country of origin and the country of destination, the use of local social networks positively influences the acceleration of the internationalization process of companies in the high-technology sector. Originality/value Regardless of these limitations, the study provided an exciting case of internationalization of a Chinese company in Brazil operating in a high-tech medical sector. The challenges for the internationalization of EMNEs continue, which makes it opportune for future studies to include more research in this area. The propositions suggested in the study may be the first step.

The purpose of this study was to investigate how a group of Chinese business students understood the nature and the purpose of the instruction techniques they were exposed to in Britain, and the attitudes the students, Chinese lecturers in China and British lecturers in Britain held towards seminar discussions. The study also investigated how and to what extent students’ prior learning experiences predisposed them to certain attitudes towards seminar discussions. The student participants in this study undertook Part I of their degree programme at a Chinese university for two years before transferring to Britain to study for one year, graduating with a British Bachelors Degree in International Business. Data was gathered from classroom observations, follow-up and exploratory interviews, and a questionnaire survey to discover more about the students’ learning experiences in Part I in China, and from classroom observations, audio-recordings, and follow-up and exploratory interviews to investigate the same group of students’ learning experiences in Part II in Britain. A ranking task and interviews were used to identify the preferences of Chinese students, British lecturers, and Chinese lecturers from China in terms of specific group discussion methods. The study identified three discussion methods used by students in British seminars: these have been termed ‘spiral’, ‘exploratory’ and ‘individual’ methods. The Chinese students tended to use the ‘spiral’ method, repeatedly bringing the discussion back to the question provided by the seminar tutor, whereas the non-Chinese students tended to use the ‘exploratory’ method, reformulating each other’s opinions and building on them by bringing in new information. When discussing within Chinese-only groups, the Chinese students used the ‘individual’ method whereby a group leader took responsibility for the outcomes of the discussion and the other members did not build upon each other’s contributions. Chinese and non-Chinese students sometimes misunderstood each others’ intentions, but were not likely to notice that miscommunication had occurred. The ranking task and the follow-up interviews revealed that the British lecturers preferred the ‘exploratory’ discussion method, whereas Chinese lecturers from China and Chinese students preferred the ‘spiral’ method. The British lecturers were found to adopt a constructivist approach to group discussion tasks, seeing them as a means by which students could obtain professional experience. They treated Business and Management knowledge as divergent and ‘soft’. Chinese lecturers and students, on the other hand, were found to perceive group discussion as a kind of assessment and were keen to find ‘correct’ answers to case study problems, treating Business and Management as convergent and hard disciplines which offered judgements on good practice. The Chinese lecturers in Part I of the programme organised group discussion so that students could exchange answers and check their accuracy, and, perhaps because of this, in Part I the students learnt in an exam-oriented way, strategically dividing up their tasks and working individually on their own task portions in order to find an acceptable answer as quickly as possible. These students were found to continue to employ these strategies during group work after they had transferred to the British component of their degree programme. The study has made a theoretical contribution to knowledge concerning the cultural influences on students’ classroom interactional practices. The findings from the study have implications for the teaching of intercultural business communication, and the enhancement of students’ learning experiences in international business programmes, in business English programmes in China, and whilst learning within groups.

The rising globalisation, supported by rapid technology innovations has changed our current business environment within the last years. As a result, especially SMEs have to cope with a higher pressure of maximising their efficiency and competitiveness in order to survive on the market. Nevertheless, many managers recognised the great potential of outsourcing to utilise the enormous benefits of external suppliers to solve this problem. For instance, it enables the SMEs to concentrate on their core capabilities combined with exploiting synergy affects of the supplier cooperation as costs savings, access to R&D knowledge etc. But the outsourcing dimension changed as well, due to the increased globalisation, companies are not hesitating anymore to step over their country boundaries and offshore to high promising emerging countries like China. However, offshoring cannot perform miracles, more it presents one of the most strategic and complex decisions affecting the whole company.

Based on these facts, this Master Thesis investigates how an SME should outsource to China. The basis of the outsourcing decision is examined to make the right strategic decision, which is illustrated with a developed model. More, the supplier selection and maintenance are explained, followed by the description of the facts which have to be considered when offshoring to China. Particularly due to the focus on offshoring to China, this thesis will further look into the affects of the Chinese culture on the companies’ networks. The research is based on a case study, which is further used to derive general conclusions for other SMEs.

The result of the investigation is that SMEs should decide which parts to outsource from a strategic point of view. Further to cope with the lack of resources and the Chinese cultural issues the cooperation with an intermediary is recommended.

Aim/Purpose: In our previous paper, we have proposed a methodology to deliver an applied business course to the multicultural audience having in mind embedding into the course cultural sensitivity and create a safe place for multicultural students to use own cultural metaphors in a learning place. We have proposed a fusion of ancient storytelling tradition creating an overall context for the teaching process and specific use of rich picture coming from Soft System Methodology (SSM). The used teaching approach is promising and brings the required results. However, the proposed method, to be fully effective requires a computerized supporting tool in a form of sophisticated graphical editor/presentation application displaying in real-time case study progress along with the in-class discussion. This tool is a central topic for this paper. Background: The existing tools like for example MS PowerPoint, MS Visio, or Prezi used by us so far cannot be used for our purpose as the interactive image update distract the students. The MS PowerPoint and Prezi require visible mode switching between design mode (edit) and presentation mode. Whereas MS Visio editing is too slow for our purposes. This switching or editing time create a meaningful distraction during the discussion. Methodology: As a solution for the above problem, the authors work on the development of own specialized tool using open source software Blender 3D (http://blender.org) along with Python. The code will be released to open source domain to enable further co-operation with other researchers. Contribution: The described effort, if successful, should create a new presentation tool allowing among the other features, seamless in-class knowledge transfer and in the future will enable the way for gamification of case studies. Impact on Society: A definite improvement of teaching quality in applied business (however, not limited to) with further possibility to extend to deliver courses e.g. for company’s executives. The tool and methodology allow embedding cultural sensitivity into the learning process and will have an impact on digital inclusiveness. Future Research: The tool enables possibility for further analysis of the business situation by artificial intelligence interface. In fact, a whole interactive process of reaching the case conclusion may be observed (allowing collecting analytics and insights on teacher and student’s behavior and performance).

A professional English course in business administration studies at the university should lay emphasis on the specific demands and interests of students studying in this programme and requirements of English language knowledge imposed by the business domain. Development of business-related competences in the professional English course is essential for future entrepreneurs who will use English in multiple business contexts to run a successful and competitive business. The aim of the study was to develop and to approbate such business-related competences as business management and personal management in a professional English course in business administration studies. The author of the article emphasizes the idea that the development of business-related competences can be enhanced if the case study method is applied. The results of the study were obtained in a pedagogical experiment involving business administration students in case study modules within a professional English course. Participating in the professional English case study-based course the students developed business related competences comprising business management and personal management and the article describes the process of these competences’ practical acquisition.

Business is increasingly conducted in a global environment, and mechanical engineering students are expected to be proficient in leadership skills as well as strong technical skills. Many authors state that instead of adding more material and more courses to the engineering curriculum, which would likely turn students away from engineering, engineering educators need to respond by opening up access to engineering with the larger world. We found that one of the effective ways of bringing real-world issues related to the areas of manufacturing and design, thermal engineering, acoustics, vibration, welding and nondestructive evaluation into classrooms is through the use of case study methodology. The Laboratory for Innovative Technology and Engineering Education (LITEE) at Auburn University has developed eighteen multimedia case studies over the past ten years. Faculty and students partnering with various industries develop these case studies. The case studies focus on real-world problems that actually occurred in the chosen industry. All the technical and business details related to the problem are provided in the case study. Through the use of information technologies we created multi-media case studies that bring real-world decision making from the engineering industry into the classrooms. The students analyze the problem in the class using role-playing, thereby simulating the decision-making scenario that occurred in the industry. The students also have an opportunity to compare their solutions to what happened in the industry. This paper describes the steps involved in developing a LITEE case study, administering this case study in engineering classrooms, and the results of evaluating the effectiveness of this method of instruction. This paper also discusses the details of different case studies related to the above-mentioned areas available through LITEE.

This publication presents six case studies of public policies that promote the development and use of geospatial technologies and applications, which can be categorized in five layers: institutions, tools, data, skills and industry. The evolution of these technologies and applications over the past decade has been driven by the understanding that where people and things are located is central to smart decision making. As a result of low-cost launch vehicles, increasing numbers of satellites in orbit, new sensor technologies, machine learning algorithms, advances in cloud computing, and the emergence of other technologies such as drones and high-altitude platforms, the geospatial economy is now expanding into many new geographies and sectors. This expansion calls for the development of innovative applications that benefit government in areas such as agriculture, environment, energy, aviation, maritime, transport, health, education, business, and society.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.