Top Ten Investment Trends in ChinaSeptember 08, 2016
What are the top ten trends that will shape how business is conducted in China this year?
One of the challenges of doing business in China is navigating the constantly evolving landscape of regulations and policies, industries and new opportunities. Below we’ve listed the top ten trends US investors currently operating, or looking to operate in China, need to know.
- China’s transition from manufacturing to services and consumer based consumption
- The rise of infrastructure. China plans to spend $720 billion on infrastructure investment in 2016. Urbanization of China's population will also contribute to infrastructure.
- The continued growth of the services sector. FDI (Foreign Direct Investment) in the Service sector has overtaken manufacturing as the largest share of FDI into China.
- Greater market liberalization of key industries, particularly finance and telecommunications.
- China’s nationwide retail boom and the booming e-commerce industry will continue to expand. Investors will be looking to sell their products via reseller agreements, distribution agreements and e-commerce.
- Appetite for technology, high-end consumer items and infrastructure.
- Increased enforcement of IP rights in China.
- The enforcement of China’s anti-corruption campaign. US enforcement of anti-corruption laws against US companies operating in China will also be required.
- China’s development of its One Belt, One Road policy. Developments include: augmentation of infrastructure networks and connectivity, improved infrastructure via China’s western landlocked provinces, demand for commodities, and the ability for foreign investors to integrate their supply chains within the OBOR geographic span.
- Key industries to watch will be: energy, environmental & clean/green technology, automotive, healthcare, financial services & Fintech, travel/tourism, education, aviation and e-commerce retail.
Despite US investors looking to regions such as India and Vietnam, China is still a main player. China’s proactive approach in implementing preferential policies and incentives to attract FDI, improving infrastructure and negotiating trade deals enable US businesses to successful expand into China.
Our Global Tax Experts can assist your business in further understanding the process of operating in China.