China

• The third economy in GDP terms.
• The second economy in trade terms.
• The first economy in terms of reception of foreign investment. Average 60 billion per year.
• The fourth economy in terms of out-flow of foreign direct investment.
• 6% of World GDP (45% in 2050)
• Internal savings rate of 30%
• The core of the Asian regional integration.
• 100 million of middle class consumers (600 million in 2025)
• Generational leaps in infrastructure
• Generational leaps in IT growth (Over USD150B in R&D centers)
• IT, High Tech Trends
• Growing private sector
• East Asia/Asean is moving towards a common market

China. Complexities

• Intertwined political, economic and legal systems.
• 56 ethnic groups, 32 provinces and more than 200 languages.
• Geographic concentration of industrial clusters;
• Economic development plans based on political planning and public financing;
• Business management that may include social considerations beyond “efficiency”;
• Financial system driven by social-political considerations;
• Government interference on business decisions;
• Asymmetries on economic incentives and tax benefits, per region, per sector;
• High foreign direct investment;
• Growing mixed economy, growing private sector;
• Complex patterns for mixed companies;
• Strong regulatory framework in strategic markets;
• Complex, fragmented and changing legal system.
• Complex arrangement of actors and alliances;
• Complex arrangement of manufacturers, traders and agents.

Biggest Challenges

• Understand. Success in the China = Success in the World Market
• Understand. Take distance from western paradigms
• Be able to recognize that “I may know nothing” or “What I know may not be useful this time”
• Be willing to invest in a learning process, exploration, observations
• Be willing to create “real relationships”, not only “business relationships”
• Search for true “innovation”
• Duly design, develop, test, refine, revise, plan and duly execute your entrance strategy
• Focus on competitive advantages from increased profits, lower costs, access to new markets, increased exports and sales
• Companies that do not have a China strategy, do not have a global strategy, and therefore do not have a local strategy either.
• Waiting means risking the future of your companies and your communities
• Look for the best available experience, judgment and contacts of China experts.