When it comes to looking for foreign business and investment destinations, China is often front and centre in people’s minds. In many ways, it’s unique.Thisfast-growing Asian economy is by far one of the largest on earth, and it is a key investment location for many. This article will explain why China really is the new investment hotspot – and why businesses should consider it as their next choice.
Trade war ending
In recent months, attention has been focused on China’s status as a participant in the trade war it has endured against the US. The latter country has threatenedor actually placedtariffs on goods from various powerful economies, not just China. The reality is that China has managed to secure a phase one trade deal with the US, meaning that free trade between the US and China in many sectors is back on the cards, re-securing China’s spot as a top investment destination.
Another reason thatChina often surges in the minds of investors is because of its infrastructure. The Chinese government, unlike some others in Asia, hasgone to real lengths to ensure that everything from road connections to airports are as efficient as possible. The country has, for example, the world’s longest railway bridge in the form of the Danyang–Kunshan Grand Bridge which links Beijing and Shanghai. One key consequence of such good infrastructure means that workers can be more productive thanks to better travel to work, which has a positive knock-on effect for investors looking for a healthy return.
China has developed a wise approach to regulation in recent years, and it is one of the most successful countries in the world when it comes to balancing the interests of domestic firms with those of foreign investors. It offers clever incentives, such as cheap loans backed by the state, to foreign investors. Intelligent regulation has led to support for firms that are springing up across the country to help international businesses access specific sectors.For example, firms offering China clinical trials can help businesses enter the country’s pharmaceutical sector, whether it be to register a new drug or medical device.
Size and scale
China has a population of around 1.4bn people.Crucially, this means it also has an economy which has been designed to make the most of this phenomenal level of scale. This means that there is an almost unlimited supply of workers and land, which for a foreign investor or business leader helps mitigate risk somewhat. China enjoys an environment where so many key resources are plentiful, and this stands in contrast to other potential investment destinations where populations may be shrinking and where space may be at a premium.
There are all sorts of reasons why China is a great investment destination. From the promising resolution of the recent trade war to the infrastructure available, China has all kinds of things in favour of it being a place to open up a new logistics centre, drop off a chunk of investment or something else altogether.