Growth opportunities in China

China: A paradise for companies seeking growth

Lisa W. Hess, a money manager, writes in Forbes, "The war-related economic drag (on US economy) will not be over soon. Since religion is involved, this struggle will last years and years, if not decades. The "war on terrorism" is a polite way of referring to a conflict between radical Muslims and mainstream followers of Judeo-Christian tradition....With the US embarked on such a self-defeating path, it is folly to keep the bulk of your portfolio in domestic issues." Or in other words, look at growth economies like China.

Why is China an interesting market for companies seeking growth?

China is the biggest consumer market in the world. Its middle class may be as large as 200 million people. And these are not people who are fed up with advertising and have no more place in the home to buy anything else (a very American problem). These people can't wait to buy stuff and their savings are meant to buy the next consumer product that is on their wish list.
Membership in the World Trade Organization (WTO) has made it somewhat easier to do business in China.
The Chinese Government has also made some progress in developing a legal system and making it easier for foreign companies to operate in China.
Chinese consumers are fascinated by branded products, and if marketed right, they are ready to spend their money.
China has consistently been attracting highest amount of direct foreign investment for about ten years now. Foreign investment in October 2004 increased 23 percent from a year earlier to $53.8 billion after gaining 21 percent in the first nine months, the Beijing-based Ministry of Commerce reports. That exceeds last year's tally, which was an all- time high.
Wal-Mart Stores Inc., the world's largest retailer, this month opened its 40th store in China and said it plans to open as many as 15 more next year. France's Carrefour SA, the biggest overseas retailer in China, said in May it aims to open as many as 15 superstores a year in the country, its largest and fastest- growing Asian market.
Disposable incomes in urban areas, home to a third of China's 1.3 billion people, rose 7 percent in the first nine months of this year to 7,072 yuan per capita. China's gross domestic product (GDP) is expected to rise to $5,078 per person in 2030 from $1,139 this year, according to UBS AG. This is when Chinese government has been trying desperately to stop the economy from overheating.

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