As fast as China is growing, the hype surrounding China might be growing at an even faster pace.
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It is easy to see why some people might get a little carried away in their predictions on the Chinese economy:
- According to the state-owned China Internet Network Information Center, China's total number of Internet users rose 53% to 210 million at the end of 2007 up from 137 million at the end of 2006 and 162 million in June 2007.
- China's 2007 addition to its existing power grid is more than the entire installed generating capacity of the United Kingdom.
- 10 years ago, China has about 10 million cell phone users. Now, it has more than 500 million cell phone users.
There are only a few examples of China's tremendous growth. Although such shear growth may excite you, there are a few realities you should be aware of:
- Some sectors are mature, resulting in high barriers and no space for new entrants.
- Sectors that do not have high barriers are often in a constant state of price wars, leaving little profit to be made for most players.
- Barriers in most sectors are designed to place you, as a foreigner, in a disadvantaged position.
- Although China has made many progress since joining the WTO, local authorities still put up many restrictions of their own.
- Local competitors are much better positioned than you at gaining the favor of local authorities.
Relax; there are still many great business opportunities in China for you for profit from, either directly or indirectly. Here is a simple list of some of the sectors with the greatest potential in China:
- Retailing sector
- Manufacturing sector
- Automotive sector
- Biotech and medical sector
- Chemical sector
- Construction and infrastructure sector
- Energy sector
- Finance sector
- IT/telecommunication sector
- Media and entertainment sector
- Education service sector