Since 1978, China has changed from a centrally planned economy to a market based economy. This has led to an exponential economic and social growth, with an economic growth rate of ten percent per year, lifting over half a million of the population from poverty. This aspect has helped the country to almost attain the Millennium Development Goals. According to World Bank, this developing country is the second largest economy in the world, hence providing a myriad of business opportunities for both local and international investors. If you are interested to find affordable business opportunities in China, here is how to find these openings.
1. Review The Government Strategic Plan
China is governed by five-year plans that give an outline of the focus areas within this period; the objectives and methods of execution that will enable the country achieve its economic, social and political goals. The current plan (2011-2015), which is the twelfth plan since the inception of this idea, lists businesses and industries that will receive support in form of grants and subsidies. Investing in the automotive, biotechnology, energy and IT infrastructure is profitable because the government is currently interested in growing these areas and will offer financial support and good will to ensure that these areas grow for the benefit of the increasing population. Note that not all these sectors are open to foreign investment; therefore, it is prudent to ensure that the sector you are interested in offers all the desired benefits.
2. China Economic Report
The China Economic Report is an outlook that gives the overall picture of the Chinese economy, highlighting developing sectors, their growth rate, opportunities and challenges. This gives you a chance to make an informed decision on what area to venture into and what strategy to employ in order to be successful. The report constitutes of economic forecasts and projections based on about thirty economic indicators, giving a comprehensive and reliable national economic report.
3. Investing in Green Technology
On June 30 2015, China dedicated itself to reducing its carbon emissions by sixty percent by the year 2030. The Intended Nationally Determined Contribution (INDC) document further states that China will ensure that the share of non-fossil energy carriers will be increased, as well as ensuring growth in the forest stock value. The government is focused on promoting and investing on green energy solutions that will in turn promote sustainable development. Being an industrial country where most industries are powered by coal- a non-renewable energy source, innovative business ventures into finding better fuel for the manufacturing industries, will definitely be profitable.
4. Wholly Foreign-Owned Enterprise (WFOE)
A joint venture is characterized by a partnership between a foreign business owner and a Chinese citizen. A Wholly Foreign-Owned Enterprise (WFOE) on the other hand, allows a foreigner to run a foreign company in China, according to the Chinese law. Although a joint venture is usually seen as a safe way of finding business in China, experts warn that it is a classic case of ‘same bed different dreams’ whereby the local citizen usually knows much more than the foreigner, manipulating the foreigner in some cases. Hence, the WFOE is regarded as a better and affordable way of finding business in China. Reports show that WFOEs offer freedom and independence, better legal protection in terms of intellectual property rights, thus offering reasonable business opportunities to foreigners.
Finding the most affordable business opportunities in China basically requires ample and accurate research from your end. Make consultations from available sources and if you are an international investor, ensure that the target area allows foreign investors.
Would you be interested in starting up a ‘greener’ business in China? Let us know in the comments section below.