China offers business opportunities for U.S. companies
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After emerging from the global financial crisis, China is offering many business opportunities to U.S. companies in a post-crisis world, said a U.S.-China business strategy advisor in Chicago.
"China has shown itself to be strong, with its GDP growth rate at 8.7 percent in 2009," Anita Tang, managing director of Chicago-based strategy consulting firm Royal Roots Global Inc., said at the Consulting Roundtable held at the University of Chicago's Booth School of Business on Thursday night.
Tang's speech, entitled "Pause, Rethink, and Strategize: Capturing the Chinese Opportunities in a Post-Crisis World," discussed issues such as a new era in the global economy, China's economic development model as well as China's stimulus plan and "Going Out" policy.
"In a new era in the global economy, China is becoming a key player in global growth, security and stability. To emerge from the economic crisis, China took a series of economic stimulus plan, adjusted and modified its economic development model of nearly 30 years," Tang said in her speech.
"The old investment-oriented and export-oriented survival model weighed heavily on growth and lightly on development. It was founded on China's special situation which consists of three difference dispositions -- a developing country, a country transiting to market economy and a socialistic country," Tang continued.
However, "China is now steering towards achieving a people-oriented development model, with which it aspires to realize a 'prosperous, strong, democratic, culturally-advanced, and harmonious modern society' through a development model based on three pillars: net exports, domestic investment and domestic consumption," she added.
China's new economic development model provides plenty of business opportunities to U.S. companies. China is not only the factory of the world, but also a growing marketplace. For example, Tang said, in 2009, China sold 13 million cars, about 3 million more than the United States.
"Chinese consumer spending has risen from 1.6 trillion U.S. dollars in 2008 to 1.7 trillion dollars in 2009 and is expected to reach 1.9 trillion dollars in 2010. Chinese consumers have the money and are willing to pay more for brand names and product safety," she said.
According to Tang, in late 2008, the Chinese government rolled out the 2008-2009 economic stimulus plan in a wide effort to offset adverse global economic conditions. Tang said, "A fiscal stimulus equal to 13 percent of GDP and 1.2 trillion dollars in credit were pumped into the economy, which brings forward lots of business opportunities for Chinese companies and international businesses as well."
Another major move by the Chinese government is its "Going Out" policy, which was introduced in the late 1990s. "With the encouragement of the government, Chinese companies are going out to explore international markets with their eyes on brand, technology and new markets," Tang explained.
When asked about the recent media report on the sustainability and potential risks of the Chinese economy in 2010, Tang replied, "With the Chinese government doing very well in micro-economic planning using different respective policies to help the Chinese economy, the possibility of a crush is not big.
"Look at the figures. China might have already come out of the crisis. But at the same time this is a very critical moment. China cannot survive alone. China is a part of the global economy. So if the rest of world is not coming out of the crisis, China can only do so much," Tang pointed out.
Laraine Spector, managing partner at the Midway Strategy Group, told Xinhua after the presentation, "There are some fantastic opportunities for U.S. companies in China, but it is difficult for most Americans to figure out where the opportunities are and how to take advantage of them."
When asked about her advice to U.S. companies that want to attract Chinese investments, Tang said, "They have to understand where the Chinese come from, their culture, and what they want to achieve here in the U.S. The key is communication and what kind of value you can provide to the Chinese."
