The China Integrated Analysis is our newsletter published on a regular basis, discussing the latest business trends along with providing practical operational tips that we share from our acquired know-how.
Even with China’s GDP growth slowing in recent years, business opportunities for international companies are accelerating. Absolute GDP numbers which are those that matter to enterprises and the exploding middle class shows that it is a perfect moment for foreign companies to develop in China. The middle-class expansion is finally turning China into the consumers’ market that foreign businesses have been expecting and is becoming a bona fide target market for most quality products. This whole new set of opportunities for foreign firms is highlighted.
Two articles from the Neue Zurcher Zeitung have implied that Swiss and European companies are not making profit in China, particularly SMEs, and that China is a “necessary evil” for business people. We take the opportunity to have a deeper look at the 2012 EU Chamber Business Confidence Survey. Rather than a decline, this EU survey and other available data on Swiss companies unmistakably points to increasingly positive results in China for EU and Swiss companies over the years. In particular the profitability of international businesses in China keeps increasing and it is now on average higher than in the rest of the world!
Raising wage is a priority amongst China’s most recent Five Year Plan goals: the Chinese government plans to raise minimum wage to nearly double by the end of 2015. Does this labor cost rise spell the end of China as a production base? This analysis demonstrates, with elements such as automation or inflation, how the country still remains a low-cost production center while China turns as well into a consumer market.