Important Factors Every Offshore Investor in China Has to Consider
China has posted high single-digit growth within the last two decades and it is expected to surpass the USA to become the largest economy in the globe within the next few years. China has a high population. Therefore, its economic growth is not expected to slow down any time soon.
The economy is globally known for the manufacturing sector, which stood as the largest in 2010. Even though the communist country has maintained numerous state-owned enterprises, it is shifting to a free-market policy that has encouraged more foreign investments.
If you are an investor interested in education, manufacturing, or technology, you should know that China offers many opportunities. After registering your company in China and adopting the right strategies, you are more likely to grow into a global giant. But before you start expanding your business to China, consider the economic facts about the country below.
A Brief History of China
To understand the reasons behind the high success of the Chinese business environment, you have to understand the history of the country. The success of the Chinese business sector dates back to 1976. After the death of Mao Zedong in 1976, Deng Xiaoping became the leader and launched the official modernization of industry, defense, agriculture, and science and technology. He adopted strategies that started pushing the economy higher and higher.
Deng focused more on reducing government control. Therefore, he opened the country to many foreign investors. Later in the 1990s, Jiang Zemin became the leader and privatized many state-owned firms as part of the modernization agenda. He also promoted foreign investments. By the end of 2020, the Country had adopted a market-oriented approach. Here are a few statistics that show the position of the country in the world.
- Around 91 percent of the state-owned enterprises appeared in the year 2020 Fortune Global 500 companies.
- China has ranked among the largest economies in the world since 2014
- Chinese nominal GDP stood at $15.66 trillion in 2020
- The country’s population was 1,394,015,977 people in 2020
None of the other countries in the Far East and other parts of the world can match China when it comes to nurturing businesses. That is one of the key reasons the country has been attracting many foreign investors.
The country’s administration has focused more on developing infrastructures, including inland container depots (ICDs), highways, bridges, roads, seaports, and airports to allow easier movement of people and goods. The effect of the development is a lower cost of business operations. Therefore, you will enjoy higher profits after establishing your business in the country.
Impressive Social and Political Stability
Perhaps, you have heard of political riots in the countries neighboring China and those in the west. However, you will rarely hear of riots in China. The country has a stable economic and political environment that allows investors to plan and achieve their long-term business goals. One result of social and political instability is usually hyperinflation.
Registering Your Company in China
If your dream is to expand your company and make it a big multinational presence in many countries, China offers everything you need to achieve that. However, before establishing any business in the country, you will have to complete the company registration process. You will have the option of opening a joint venture (JV), a wholly foreign-owned enterprise (WFOE), or a representative office (RO).
Unfortunately, the process of starting a company in China can be a challenge. You will have to deal with many government agencies and submit many documents. So, the best thing to do when opening a company is to work with an expert agency. The experts will help you register a business faster and start your operations within the shortest time possible.