Doing Business in China – Part 2

China_banner_Part2

China in 2014 and beyond will be full of opportunities for a variety of industries and it will be unlike anything you’ve imagined China to be. Labor costs are rising, land costs are rising, cost of energy and water are rising, and the cost of capital is higher and will continue to increase even more. As a result of these drastic changes, companies can no longer afford to just manufacture products in China and sell them for a profit somewhere else.Companies will now, more so than before, be able to sell their products in China in addition to manufacturing them there. In other words, China is no longer just a cheap place to manufacture products.China is the world’s second-richest country and second-largest importer. Based on 2012 calculations (latest year for which the full numbers are available), China bought $1.7 trillion worth of imported products. This is a 54% increase from 2008.

This leads to the next question. What exactly is China importing? Well, here are the top 10 products that China is importing specifically from the USA:
  1. Oil seed: $15.7 billion
  2. Machines, engines, pumps: $14.7 billion
  3. Electronic equipment: $14.3 billion
  4. Medical, technical equipment: $10.1 billion
  5. Vehicles: $8.2 billion
  6. Aircraft, spacecraft: $7.6 billion
  7. Plastics: $6.3 billion
  8. Wood pulp: $4.4 billion
  9. Organic chemicals: $4.2 billion
  10. Coppers: $4.1 billion
But what about the future?

 

If the past is any indication, then we believe that the following product categories will be needed in China during 2014 and beyond:
  • Cereals
  • Sugar
  • Live animals
  • Vegetables
  • Dairy, eggs, & honey
  • Fruits & nuts
  • Coffee, tea, & spices
  • Leather & animal gut articles
  • Pharmaceuticals
  • Vehicles
  • Cotton
  • Milling products
  • Vegetable products
  • Meat & seafood preparations
  • Clocks & watches
  • Clothing
  • Glass
  • Copper
  • Fur skins and artificial fur
  • Cocoa
  • Tin
Does your company compete in any of these categories? If so, then right now is the time to consider exporting to China. If you are already exporting to China then this is the time to figure out ways increase your market share!