Is China Market Still Attractive?
There are many WOFEs leaving China Market recently. It becomes a critical issue that “is China market still attractive to the foreign investors?” The answer is negative. It is the time for China industrial restructuring and it still has the investment potentials for the foreign investor.
As mentioned in the “Researching Report on the Business Environment of Year 2015” issued by AmCham in China, over 60% of their member company still considered China as the top three investment destination. Further, according to “2015 World Investment Report” issued by the United Nation, there was USD 129 billion as the foreign investment flowing into the China market in Year 2014, which was increased 4% year on year. China has replaced USA and been the biggest country for foreign capital injection.
It is true that some foreign investor, especially the traditional manufacturing industry was leaving the China market. For example, Panasonic relocated its manufacturing base from China to Maxico for the purpose of saving the labor cost.
But, oppositely, some foreign investor increased their investment in China. For example, DELL will invest extra USD125 billion in the coming five years. INTEL purchased 20% equity of Beijing Ziguang Spreadtrum Communications Inc. at the price of RMB 6 billion. Up to Year 2020, the total investment for SAMSUNG in China will be USD 40 billion for the purpose of expanding and resource integrating of “the top technology equipment industry”, “financial”, “new energy” and “intelligence city” markets.
On the other hand, there are more and more foreign investors set up companies in China for providing the products and services to the China market. According to the latest data from AmCham, 80% of their membership in the south east China provide such services, as increased 50% than that in the past 10 years.
We found that the foreign investor changes their priority of investment from “MADE IN CHINA” to “Intellectually manufacturing in China” OR “MADE FOR CHINA”. The investment industries become “lighter” and “newer”. China market may become the biggest consuming market in the world.
With a better understanding on the China investment environment, we believe that the foreign investor can have a good control on their investment in China and gain more profits.
If you want to know more details, please contact our senior consultant.
Ms. Jojo Hu
TEL: 0086-21-68868335 ext 324 / FAX: 0086-21-68868021