Doing Business in China For Dummies®

Understanding China’s Appeal

The dragon called China has emerged on the world scene as a new economic powerhouse. Since China opened its doors to foreign business in the late 1970s, its transformation has been absolutely remarkable. Over the last 25 years, China has transformed itself from a centrally planned socialist state to a semi-market-driven, semi-command economy. For more than a decade, China’s GDP has grown over 9 percent each year.

China recently attracted over US$70 billion worth of foreign investments in a single year, more than any other country by far! Since China opened her door to overseas companies, approximately US$700 billion in foreign direct investment (FDI) has landed in China. China now ranks as the fourth-largest economy on the planet after the U.S., Japan, and Germany. Soon, it’ll be the second-largest economy in the world. Many economists are saying that China will be the world’s largest economy by 2025.

If the booming economy isn’t enough, this section can help you understand China’s appeal. (For more on potential opportunities for you business, see Chapter 2.)

Cutting costs to meet global demands

Manufacturers based in China have considerable cost advantages over companies producing goods in Europe or North America. Foreign investors in China continue to chase cheaper wages and lower operating costs, which translate into improved margins and greater ...