Investment Opportunities in China

Investment Opportunities in China

China offers many opportunities especially for foreign investors from diverse industries.

China's economy has grown steadily over the last few decades, as China is the second-largest economy in the world with more than 1.4 billion people. China offers many opportunities especially for foreign investors from diverse industries. Starting with the economic reforms of the 70s, China has experienced exceptional growth to make it the perfect place for businesses that are looking to expand and invest globally. 

Can a Foreigner Open a Business in China?

Some people might wonder whether a foreigner can open business in China or not. The answer is “yes”, everyone can open a business in China. They can own a company by combining their business in China.

Foreigners can combine their business through wholly foreign-owned companies  (WFOE), open a joint venture,  begin a representative office or with Umbrella company.  

Then, the next question is how to open a business in China. Well, there are many ways to start opening a business in this country, one of them is you can consult with a company registration services that will help you to learn more about business in China.

Meanwhile, this country has made economic progress in various aspects and it is pretty open to foreign business such as imported food, organic food, cosmetics, fashion, health care services & products, traveling, baby-care, energy and environment and more. Those sectors currently are in rapid growth.

Business Opportunities in China for Hong Kong People

For years, the Chinese market has grown incredibly, with more and more foreigner companies and investors have been extending their business in China. This country offers a huge opportunity for foreign and local people with several industries growing at remarkable rates. China becomes the largest exporter and importer of goods in the world. Also, it provides affordable as well as reliable technology,and a highly productive workforce. These factors have made China become a strong place to do business.

In addition, China has many developing sectors such as agriculture,oil and gas, automobile,  manufacturing, pharmaceutical and tourism.

However, opening a business in China is not that easy, there are several challenges that prospective companies will face such as a language barrier. The language will make it difficult for foreign people who can not speak chinese to start their business. 

It will be easier for Hong Kong people to open a business in China than other foreign countries as they are not constrained by language.

If you are willing to start a new company in China, here is the list of profitable business opportunities in the China market.

Also Read: Benefits Of Foreign Companies Investing In China

Import and Export Trading

China is the second-largest importer and largest exporter in the world with $2 trillion in annual exports and around $1.6 trillion in imports. It is fair to say that China is the largest market for imports and exports of goods. 

China's biggest export partners are America, Japan, and Hong Kong, while China’s big import partners are South Korea, Japan, and China. In terms of products, the bulk of export revenue is generated by electrical and industrial machinery for China, furniture as well as apparel.

If you are looking to start a business in this sector, maybe you find difficulties understanding China's import or export industry. However, don’t worry,  this guide can give some things you need to know about exporting and importing in China.

  • Understanding the Types of Import or Export Business in China

Before starting an import or export business in China, it is important for foreign investors to understand all the role players in this sector namely export management company, export trading company, and import or export trader.

  • Export Trading Company

An export trading company trying to know the demand and supply by finding out what the buyer needs and then they will find a domestic company that can export the required goods.

  • Export Management Companies

If a manufacturing company in China needs to export electronic equipment, they should contact an export management company. As an export management company manages the whole process of shipping goods overseas. That includes distributor recruitment, marketing operations, and shipping logistics.

Education Services

If you have experience or interest in becoming an educator, a business in educational services can be a great opportunity. Educational services that can be held online, especially during the Covid-19 era, which require certain jobs to be done from home.

In China, online education services have been growing by 15 percent from year to year. It is due to the great emphasis on quality education in modern China. These are all part of a broader goal created by the government to move from a manufacturing economy to a more service-based economy. Education is an urgent and prioritized market with sustainable growth for investment opportunities.

Because of Covid-19, online education has been given an unexpected opportunity to develop even though many industries have been affected.

Start an Internet Business

As of 2016 over 780 million smartphones were activated in China, according to official information from the China Internet Network Information Center. Forty-nine percent of the population (668 million) already connected to the Internet, with Internet users spending an average of more than 6 hours 8 minutes on media every day, of which more than 3 hours on social media, 2 hours 40 minutes on TV, 11 minutes on the radio, 10 minutes on the newspapers, while  only 1 minute on the magazines.

With the advancement of technology in this century, opening a business in China has become less of a hassle than online marketing, but once you own and run your company, what's the next step?

You only need to go online. Here we will provide several ways to set up your online business in China.

  • Use a Website 

When you want to promote your business online, you need to provide users with a place that can provide the information about your product and that is your website. 

Keep in mind some important aspects so that you can count on a website as your best business card. 

  • You need to think about the domain name, hosting, and features.
  • Obtain an ICP license.
  • Youku

Video content is the best way to promote your product compared with a well-made press release. However, Youtube is not available in China, so your only option is to use Youku.

With over 150 million daily active users, the platform is gaining popularity in the Chinese market, with an average of 900 million video views daily, of which 400 million are on mobile devices. But does it have anything to do with an online business?

  • WeChat: 
  • With 1.2 billion users on WeChat in 2020, the potential of social networking for your business is unbelievable. You have access to a great volume of users that spend their time  on WeChat and using integrated third-party applications. 

    Adults in China spend 40 minutes/day on WeChat, with 55.2% of users opening the app over 10 times a day. It's amazing isn't it? you can use this platform to open your online business in China.

    In addition to the three online that have been listed above, there are still many sites and platforms that you can use to start your online business in China such as Baidu and Weibo. 

    Travel Agencies

    The Travel Agency Industry has been badly affected by COVID-19. Numerous travel plans were canceled due to epidemic precautions, it happened in February and March 2020. Industry revenues decreased during the first quarter of 2020 and many travel agencies closed.

    In mid-March 2020, the epidemic situation in China started to get better. However, the epidemic situation in other nations began to worsen. The government has applied several measures such as cultural coupons to encourage the industry to recover. 

    Foreign investors often choose a travel agency in China as their business as they do not think of complex formalities. Wholly Foreign-Owned Enterprise (WFOE) will be the best structure to open a travel agency as it is known for having a simple structure that integrates with most operations and which provides complete control over the company.

    Several requirements need to be considered when opening a travel agent in China, including

    -      You must obtain approval from the China National Tourism Administration to set up a travel agency;

    -       Your travel agent will run under WFOE rules in China;

    -   The registration of taxes and social contributions 

    Fashion and Clothing

    China has exceeded the US as the world's largest fashion market in 2019, according to McKinsey. The fashion industry in China has grown rapidly over the past decade and is currently growing at an incredible rate. 

    When it comes to market segmentation, China’s fashion industry is most likely to reach good development in the mass fashion as well as luxury goods with the mass fashion is especially driven by competitors that already stand out in the mid-market  as well as have an intense value proposition. As for the luxury market, it is driven by the rapid growth of Chinese economy as well as the prosperity that happens in the global tourism industry.

    The development of e-commerce especially in the fashion industry has made a domino effect for influencers on social media. The fashion style they used has affected young people, and a number of influencers began making their own brand and starting to sell their clothes on Taobao. 

    Agriculture and Processed Food

    Cultivation traditions in China are intensifying and the history of agriculture is quite long with a reported rural population of over 300 million people. China's local and national governments controlled modern industry until the late 1980s until specifically the rural agricultural sector and farmers were prioritized by the Chinese government.

    Agricultural mechanization in China is capable of helping to produce food for its people. And comprehensively, the level of cybernation of planting, harvesting, and land cultivation reached 68 percent in 2018. For example, wheat increased by 100 percent, while rice and corn reached more than 80%. Urgent commodities in China, including wheat, corn, rice, cotton, soybeans, peanuts, rapeseed potatoes, and potatoes, are the top exporters.

    China managed to produce a quarter of the world's grain to meet the food needs of a fifth of the world's population. This is very important to meet China's own food needs nationally and globally. This achievement makes China ranks first in the world's food production in terms of cotton, cereals, vegetables, fruits, meat, eggs, fish, and poultry.

    China is very advanced in the field of the food processing industry. China's food processing industry continued to grow in 2017 until its revenue rose 6.3%, or equivalent to $1.47 trillion, compared to the previous year. Technological developments are one of the factors supporting the growth of the agricultural and food processing industries in China. This can not be separated from the role of the millennial generation, which was revealed by the Director of Marketing and Communication Kate Ba as many as 71.5% of the younger panda generation, using online media to find out the advantages of the product they are looking for. 

    With the abundant availability of food ingredients and high technology, there is a great opportunity to do business in the food sector in China. The opportunity to open a business in China is very large for Chinese citizens themselves and even foreign nationals. 

    Seeing China's progress in various aspects of the economy that managed to excel compared to other countries made it the country with the second-best economic progress in the world.

    China's business will not only stop here, but it will continue to grow and it is not impossible that China will dominate all sectors of the world economy. This can be a good opportunity for Hong Kong people to choose to do business in China given the proximity of the two regions plus the common language.

    As various business opportunities in China have been listed above,  we hope this article gives you a view that you have a huge chance to have your own company in this country. So,  have you decided to open a business in China?