2003-09-02 10:53:12
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2003-09-02 10:53:12
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Big market attracts foreign investors
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| Author: WANG WU | ||
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By flipping the pages of recent issues of China Business Weekly, one can easily see stories about foreign companies trying to establish, or expand, their operations in the Chinese mainland. The current issue reports that Japanese supplier of hard disc drives Hitachi announced last week it will spend several hundred million dollars to move the major capacity of its global media manufacturing operations from the United States and Japan to Shenzhen, a boom town in south China. Wal-Mart, ON Semiconductor and Budweiser also announced recently their intentions to expand their businesses in China; Bank of America Corp said it will cut jobs in Hong Kong and Singapore and open new facilities in South China's Guangdong Province; and Thailand chain store Ek Chor Lotus is racing against time to open two shops in Beijing. Foreign investors are attracted to China by three favourable conditions: Fast, steady economic growth; the huge consumer market; and inexpensive labour resources. When defending its plan to move more jobs from the United States to China and other developing countries, IBM said it had no option if it wanted to remain competitive because many other companies were doing the same thing. ON Semiconductor also explained its plans to increase investments in China's product-designing and logistics sectors by saying that it "aims to become the best supplier in this extremely important market." The market appears to have limitless potential. Take supermarkets, for example. French retailers Auchan and Meroy Merlin, Spanish chain store operator DIA, German firms OBI and Metro, and Britain's B&Q recently began their marches into Beijing, China's capital. More newcomers, such as Japan's 7-Eleven, will enter the market. While exciting, some might wonder if Beijing's market is big enough to accommodate so many competitors. We say there is no need for such concerns. You don't have to look beyond the long queues at checkout counters - in Carrefour, Hualian, Wumei or any other supermarket in Beijing - to realize how avaricious Beijing's consumers are. If you need more, stronger evidence of Beijingers' purchasing power, try to find a street in the city without a restaurant. Statistics clearly indicate there is ample room for foreign retailers. Beijing will allow foreign retailers' sales revenues to make up 25 per cent of the city's total by 2010.Currently, they only make up 5 per cent. Of course, Beijing is a metropolis, and more of its residents, compared with small communities and rural areas, have bulging purses. Lack of consumption by rural residents has long been confronting authorities, who desperately want to foster healthier growth of the gross domestic product (GDP). But there is no disputing China's consumer market is incomparably enormous. China, which last year replaced the United States as the largest receiver of foreign investments, is facing a new wave of capital inflow. It is only natural international investors favour this sunny land over the still-gloomy global economic realm. No wonder the United Nations Conference on Trade and Development has chosen Xiamen, in South China, as the venue to release this year's World Investment Report. The document will be made public next week when the annual China International Fair for Investment and Trade will be held in the beautiful seaside city of Fujian Province. (Business Weekly 09/02/2003 page1) |
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