Is it too late to find big money making opportunities in China?
If China’s currency evaluates enough, then the country’s low cost advantage will be in seroius jeopardy. Wage increases are beginning to make headlines of prophetic price hikes in the electronics industry. How long can China really go on as the world’s low cost leader? The Chinese government is slowing the process as much as they possibly can and yet they are facing major inflation and growth that is much too rapid.
Therefore, with the problems that lie ahead, what will be China’s advantage over the rest of the world when they are no longer the place for your company’s next factory?
The answer: China will have a multitude of advantages.
China has huge surpluses of cash and they are investing those surpluses into their entire country. When I lived in Guangzhou, China, I counted over 30 construction cranes along the Pearl River and that was what I could see while standing in one spot! You could even say the crane is the national bird!
Only 20% of China’s population lives in the major metro areas of Beijing, Shanghai, Shenzhen, Guangzhou, and some of the other coastal areas. The rest of the population still needs modernizations and economic development. This process of growth could go on for many years. China will have growth income for a long time and the real strength of the Chinese market will be its increasing rates of domestic consumption.
So, if you want to start investing in future global trends, this is the biggest and most determined trend of all. Using China as a low cost leader to source products for American consumption is almost out of vogue.
The next big China opportunity will be selling products to China. It is time to start exporting and realize the importing will be a waste of time when all of the factories have moved on to places like Indonesia, Malaysia, and other low cost countries.
Don’t get me wrong, there are still great sourcing opportunities in China, but for how long? Certainly not as long as the opportunity of making money from a growing consuming giant of a country that the world hasn’t even the imagination to behold. In fact, scientists are scared of the global effects of China’s future consumption. It is going to change everything!