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Economic Overview

China is waking up!

For the last 10 years China is one of the driving forces behind Asia’s economy, with a growth rate superior to 9% a year, China offers numerous business opportunities. China's economy, the sixth largest in the world, is growing more than twice as fast as the five biggest -- the U.S., Japan, Germany, the UK and France. According to Experts, China could maintain such a high growth rate (more than 8% per year) till 2005 as far as the country respects all the measures imposed by the World Trade Organization. Then, China could put up a 9% to 10% yearly growth rate between 2006 and 2015. With 1,414 billion USD in year 2003, China is already the sixth world’s economic power. Already half the size of the American economy, China will be the world’s largest within 20 years if it maintains such an annual growth. The foreign trade expanded more quickly, to reach 851 billion USD in 2003 (compared to 21 billion USD in year 1978), ranked fourth in the global economy, up from the fifth position in 2002. Today, China is in the Headlines: Beijing Olympic Games in 2008, Universal Exposition in Shanghai in 2010...such events that are great opportunities.

An opening market

China’s economy is actually in a phase of triple transition from a state-controlled economy to a free market economy, from an agricultural rural economy to an industrial, urban and service’s economy, and above all from a close to an open economy. In 2001 China decided to join the World Trade Organization. Such a decision is a milestone for China Modernization: wider international opening, increased transparency, and more economic efficiency.

China : the New Eldorado ?

With 1,3 billion inhabitants including 350 million people living in urban area and within steadily increasing incomes, China is definitely becoming the most significant Market of the world. By 2010, the middle class will represent more than 500 million consumers in China. A growing city middle class, constant economic reforms and WTO membership make this huge market more and more attractive for foreign companies. But, obviously, the 1.3 billion people can not be considered as a homogeneous Market. Almost 1 billion people live with less than $270 a month and the average income by inhabitant is about $1000 a year. Nevertheless, the improvement of the standard of living has already favored the emergence of a well-to-do class, which represents about 40 million people. Today, 1% percent of the population can be consider as very rich people, that is to say more than 10 million people.

China is definitely seducing more and more foreign Companies. Nowadays, China ranks first for the foreign direct investment. Foreign direct investment in China rose 12 percent to $40.2 billion in the first nine months of this year. This directly accounts for about 5 percent of the nation's gross domestic product and the factories built with these funds produce half China's exports. Besides, many companies are trying to conquer the market and many examples of successful business development show the potential of this opening market. The business opportunities recover a wide range of sector: Luxury, Fashion, Franchise, Education, Telecommunication, Car industry... After entering the market, the biggest challenge that foreign companies will have to face is to manage to run and develop their business for years.