The China business has grown by leaps and bounds in the last few years. The strong foundation of its economy and current developments have played a major role in making it the world’s fastest growing nation and the emerging attractive business house.
China has become a member of WTO and Beijing will be hosting Olympics 2008 and World Expo 2010. This has fascinated various companies to make foray into the China business.
Some of the companies which are looking for foreign partners to expand their operations are exploring this opportunity to serve the customers of the dragon country.
The Current China Business Scenario:
Below mentioned are some of the prime movers of the China business:
According to a Boston Consulting Group (BCG) survey, the combined wealth of households have risen to US$ 1.44 trillion in 2004 from a figure of US$ 890 billion in 1999, implying nearly a 100 percent growth in 5 years. But a poor growth of wealth management services has left wealthy Chinese keeping 71 percent of their property in cash. This indicates that private banking in China is yet at a nascent stage. This situation has automatically invited many world-class banks like Citibank, Standard Chartered, HSBC to enter China business that can yield profits equivalent to ten times of what one can garner from American and European markets.
The insurance sector growth has been the peer of banking grandiose. The concept of ‘investment linked insurance’ introduced by foreign insurance companies has become a hit in the Chinese market. According to official data, about 45 insurance companies from 15 countries have set up more than 120 branches in China by the end of June 2007.
China has about 162 million internet users. However according to Ma Yun, president of china,alibaba,com, China still lacks a real internet company which can handle at least 200 million internet users. The prospects in this sector are bound to grow as the Citigroup has already predicted that the number of Chinese netizens will exceed that of United States in the next two years..
Most economists hold the belief that the average P/E ratio for listed companies will rise as structural bubbles exist in the current stock market.
Last Updated on : 25th June 2013