If you own or manage a U.S. corporation with plans to expand operations globally, at some point you will undoubtedly face the prospect of doing business inside China. This is almost inevitable. With the world’s fastest-growing economy, this 5000-year-old society’s growing consumer class increasingly follows Western trends and demands Western products and services.
When contemplating a business venture in China, some interesting facts to consider are:
- The current population of China is 1,415,201,432 as of Thursday, July 12, 2018, based on the latest United Nations estimates.
- China population is equivalent to 18.54% of the total world population.
- China ranks number 1 in the list of countries, by population.
- The population density in China is 390 people per square mile.
- The total land area is 3,624,807 square miles.
- 59.3% of the population is urban (838,818,387 people in 2018), compared with 49.2% in 2010 and 35.8% in 2000.
- The median age in China is 37.3 years.[1]
Comparing these numbers with those of the United States puts into perspective the enormous opportunity for those who opt to enter the Chinese market.
- The current population of the United States of America is 326,827,894 as of Thursday, July 12, 2018, based on the latest United Nations estimates.
- The United States population is equivalent to 4.28% of the total world population.
- The U.S.A. ranks number 3 in the list of countries, by population.
- The population density in the United States is 93 people per square mile.
- The total land area is 3,531,837 square miles.
- 83.7 % of the population is urban (273,368,693 people in 2018), compared with 81.7% in 2010 and 79.8% in 2000.
- The median age in the United States is 37.8 years.[2]
In other words, with roughly the same land area, China has more than four times as many people and its urbanization rate is six times that of the U.S. since 2010. Add to this the fact that China now trails only the U.S. in the number of billionaires. In 2017, there were 563 American billionaires, while China counted 318.[3]
Mainland Chinese dollar billionaires are a new phenomenon. Whereas today there are just over 300, in 2000 there was only one. Furthermore, unlike in most of the rest of the world, where the newly hyper-wealthy are largely Internet entrepreneurrs, Chinese billionaires come from many sectors – even some where we might believe that state-owned enterprises have all the advantages and dominate.[4]
This translates to consumerism on steroids. Failure to visualize – and capitalize on – this awakened economic giant as a market or partner for your corporation could mean failure to realize the potential of vast profits. You will miss out on this essential facet of globalized commerce. The most important question for those who decide to participate is how to pursue opportunities in China without losing your shirt.
Before owning, and/or operating Chinese investments, it is critical to acquire the “Ground Truth.” This is best defined as actionable intelligence from in-country resources to provide the “know-who” and “know-how” to effectively navigate the cultural, political, and business currents unique to your specific situation. It must be employed on both the tactical and strategic levels if you expect to successfully function in China.
Ground Truth is not a “one-and-done” undertaking. It must be developed and utilized on a continuing basis. Operating in the Peoples’ Republic of China, especially, could probably be best likened to hitting a moving target while advancing through a minefield. Constantly evolving governmental policies affect all aspects of foreign businesses, and failure to anticipate and properly respond to impactful changes can be disastrous. Proactive use of reliable human assets can enable the corporate manager to anticipate and plan resolutions to problems before they arise. In China, knowledge is golden.
In today’s – and tomorrow’s – global economy, meaningful competition at an international level increasingly involves China. The ResultQuest team can help position you to establish and maintain a presence in China. Call us at 713/781-9040 to tap into our network of exceptional specialists who are skilled at developing the “Ground Truth” you need to “Enter the Dragon.”
[1] http://www.worldometers.info/world-population/china-population/
[2] http://www.worldometers.info/world-population/us-population/