Why China?
As the second largest economy in the world, China continues to be an attractive market that no major company can afford to neglect. Despite the systematic uncertainties arising from political reforms, local government debt and shadow banking, the 7% economic growth simply makes China the most dynamically-growing economy. Industry-wise, China remains as the biggest manufacturer and exporter of goods. China possesses fully-established supply chains and infrastructure for a wide range of industries and is constantly looking for collaboration to expand and improve operational efficiency. Consumer-wise, China is world's fastest growing consumer market and second largest importer of goods. As the most populous country in the world, China is by nature a huge consumer market. The rise of middle-class, increasing disposable household income and on-going urbanization will continues to drive private consumption. More importantly, the central government is determined for industrial upgrade and transition to a consumption-driven economy. Beijing has adopted all-round policy support to attain its ambitious goal and this means a lot in command economy such as China.
How to benefit?
Although blessed with great market potentials, China remains a tough market to penetrate. The business culture and the consumer habits are strikingly different from that of the western world and evolve rapidly overtime. It takes time and efforts for western companies to build up everything from scratch and even if local business is done in the form of partnership, there are substantial localization risks due to divergent interests. Nowadays, western companies can benefit from the China market in a more effective way. Thanks to the fortune accumulated during the exponential growth stage, Chinese companies are now eager to make strategic investment in western companies. The proceeds will be allocated to exploring the China market in conjunction with the investors' local resources. As the economic interests of the investor and the investee are combined together, our western partners can have rapid access to the China market without losing control over the parent company.