China: Investment Opportunities As A Foreign Investor

As the economy continues to grow in high single digits in China, investment opportunities are flourishing faster than ever. Companies and individuals all across the world are looking to get on the bandwagon to try and ride the wave. It is true that China has seen immense growth in all the sectors, and the projections for the future look as rosy as ever. This is the main reason why we are able to find the presence of almost all the top companies of the world in China – whether it be large manufacturing facilities, or a simple trading office. While language and cultural barriers have deterred a majority of smaller companies and individuals from venturing into China, there are some opportunities that are still fairly lucrative for foreign investors:

Trading and Distribution

China is sometimes referred to as ‘The factory of the world’. You can find manufacturers of products ranging from toys to toilet seats in China, with each of then making dozens of varieties in the products they are making. A lot of foreign companies have started developing their trading, distribution and procurement offices in China. Instead of buying more expensive products from other parts of the world, these foreign investors are opening their own offices in China so as to get direct access to the cheapest sources available in the world. Since the product range and price range available are limitless, this suits the needs for all sorts of investors.

Manufacturing & Production

China has cheap labor rates and partially subsidized utilities for manufacturers, which is a huge incentive for foreign investors. Moreover China makes and feeds all the production facilities with the required raw materials that are mostly also made in China. For investors who may have a production facility in U.S, not only will they be paying a lot of labor costs, utilities and other expenses, but they will also be importing a lot of raw material for their needs. China becomes as a very good substitute for investors to relocate their factory to cater to manufacturing needs A lot of big companies have already moved their manufacturing facilities from other parts of the world to China to get price and production benefits.

Retail Sector

The huge Chinese population has a experienced a dramatic increase in spending power from all the employment opportunities that new investment has created. China has the largest population for a single country in the world, resulting in a phenomenal market for all retail consumer goods. The retail sector is on the rise with foreign companies like car makers, electronics, food and beverage, fashion, services and many more opening their retail locations in China to take advantage of the booming spending power of the Chinese population.

Financial Sector

China has the fastest growing economy in the world, and with a large number of investors moving in to seek opportunities has resulted in the need for sophisticated corporate financing and loans. China is slowly opening up its financial sector to international players, and this promises to be a growing segment for the foreseeable future in light of the high GDP and the target growth rates of the country. Similarly, the Chinese stocks have begun to get the attention of many western investors as Chinese companies burst into the international limelight.

blog comments powered by Disqus