Everybody who watches TV or utilises the internet will have noticed the incidence of comments being thrown about by business leaders and PM’s about China. China is having a massive influence on the world and world business because it has a weak currency, cheap exports and as a result of doing this for years has built up enormous amounts of cash savings. Now it needs raw materials, clean water and food to feed the 1.338 billion people in its borders. How will it achieve this?
First it has the money to buy just about anything – food, minerals, products, energy, oil, gas and much more. Secondly its annoying the developed world because they have currencies that have appreciated and China has not strengthened its currency. If China strenthens the RIM it could put all its industry at risk. So it has a balancing act to achieve, make as many friends as possible like South Africa, Brazil, Russia, Portugal…then secure long term supplies for its growth.
For businesses today China, Hong Kong and Macau are still attractive but going in as a foreigner is difficult and dangerous. China has made it hard for business to invest and extract profits at the same time and still harder for small and medium size businesses to enter the market. The censorship of Google is a good example of the difficulties faced, Google has had to step back and eat humble pie or so it is reported.
The online model can be one way but China still censors web sites and has developed long tenticles to manage and control the internet, its access and the ability to use it freely. The answer to working in the east lies in good local partnerships, strong joint ventures and a careful eye on your bank account. The other point to remember is that alongside China in the Pearl River Delta lies Macau. This tiny peninsula has special status and has become the dei facto face of China due to its tourism and gambling status which now surpasses Las Vegas.
For those in Europe and the rest of the developed world looking to access Asia, Macau could be their way in. It has first world status, excellent infrastructure and although its exports to China have declined it made 15 billion USD in new revenue last year from tourism and gambling while the rest of the world was in recession. Its growth in 2009 was 8% and it has 2.8% unemployment. Its also acts with Hong Kong as the gateway to Guandong region which is China’s largest economic zone with 160 billion USD in exports worldwide. Here the langauges spoken are English, Portuguese and Chinese.
Google is competing with Baidu the local internet search engine and its a battle, although Google is still outfront by some distance. The opportunities for ecommerce in China are vast and complex with language being first up as the biggest obstacle to success.However with 1.338 billion people, more new millionairres being created than any other country and 142 million consumers currently online you would be foolish not looking to tap into this enormous and complicated market.
Look east maybe the treasure at the end of the rainbow might just still be China in spite of the censorship, political challenges and the langauge…
Happy hunting….
John Norton
John Norton is an international marketing and web solutions specialist and has helped businesses worldwide generate over 130 million euros in new business.
