China: The next Asian Superpower?
China is now the fourth largest national economy in the world by nominal GDP (US$3.42 trillion in 2007) and in second place according to purchasing power parity GDP. The annual average GDP growth rate of 10 per cent since the 1990s has been fuelled in part by China’s export-oriented economy. Increasing the central government is encouraging the movement away from export led growth to growth based on domestic demand making China a huge market of an estimated 1.3 billion people, which absorbed US$953 billion of imports in 2007. In terms of regulatory considerations, China’s membership of the WTO (China joined in 2001) means that investment measures, intellectual property rights and trade in services (including financial services) are, in theory, subject to WTO regulation and infringements actionable under the WTO’s dispute resolution mechanism.
Such developments present enormous market opportunities for foreign enterprise. And yet China is still a difficult market to crack where only the patient and the tenacious can succeed, why?
Despite its rapid economic development, China is still a developing country with a limited, albeit a growing understanding, of contract law. Intellectual property rights although underwritten by international regulations are often breeched and patent infringement is a common occurrence. Locational costs in key economic centres, such as Shanghai, can be high and even simple things like finding a suitable Chinese business partner or staff can be difficult. Factor linguistic and cultural peculiarities into the business framework; “no guangxi (relationship) no business” and China can appear quite a daunting place to do business. The World Bank (2009), for example, ranked China as only 83 out of 181 economies when it came to the ease of doing business whereas the US was number 4.
The Eurasia Consortium has been working in the Chinese market since 2003 and has had a physical presence in China since 2004. We have had successes and failures in the market - thankfully more successes than failures - but we have always abided by the traditional Chinese proverb that stipulates that "Failure lies not in falling down. Failure lies in not getting up." Our years of experience in China plus our dedicated mainland Chinese staff (all Western educated to business Masters degree level) puts us in a very good position to assist your business to develop its link or presence in the Chinese market. Simply put, The Eurasia Consortium can provide a one stop shop for all your needs in China from market research, to market access strategies, to legal and human resources support.
