China. Think big.

From the 1980’s onwards, China has secured its place as an economic powerhouse on today’s world stage. Through the economic reforms first initiated by Deng Xiaoping the Chinese economy has shown an extraordinary growth, at first fueled mostly by export.  As wealth has been increased in more recent years,  China has considerably expanded its consumption on the international market. In 2017, the increase in import amounts to 15,9% and has thereby surpassed export growth.

The current Five-Year plan, which came into effect in 2016, provides infinite business opportunities. Amongst Xi Jinping’s spear points are transparency and loosening restrictions, thereby enhancing China’s attractiveness for foreign investors.

McKinsey describes the coming decades as pivotal for China. Large infrastructural projects such as the Belt and Road initiative have the potential to ignite a new era of inter Eurasian trade. Furthermore, China’s dedication to sustainable development is exemplified by their highly ambitious goals for 2020. Simultaneously, a growing Chinese middle-class has transformed the nation into a consumer society.  These recent developments are an explicit invitation to European companies to exchange knowledge with their Chinese counterparts.

Expanding your Chinese activities

Does your company already have ongoing activities in China and do you wish to expand? Besides offering research for potential newcomers to the Chinese market, RPM has proven to be of value for a company´s ongoing activities in China. Among the possibilities are detailed performance analyses of your operation (e.g. logistics, manufacturing, warehousing), growth strategies as well as market analyses.

Sectors

Agriculture

China holds 7% of the world’s farmland, yet has to feed 20% of today’s world population. Simultaneously, with a growing middle-class, the Chinese diet is becoming more like that of the average American. Demand changes, but the farmer’s productivity remains relatively low. The Chinese government researches revolutionary ways to increase efficiency, food safety and agricultural output: This makes now the perfect time to do business with agricultural China.

Automotive

China has the largest single country automotive industry in the world, in which more than 28 million vehicles have been sold in 2017. The developing growth rate of the industry shows that it is transitioning into a more mature market. Consumers are becoming wealthier, indicating that they want to spend more on their personal vehicles. In April 2018, the government announced that legal restrictions on foreign ownership in the automobile industry will be lifted, implying that partaking in this immense market will become much easier for European companies.

In the new five year plan of the Chinese government, there is a big emphasis on new energy vehicles (NEV’s). Currently the Chinese NEV industry is already the biggest in the world and it is expected that it will grow substantially in the upcoming years. Furthermore, the demand for in-car-connectivity is increasing fast, meaning that the Chinese manufacturers are seeking new technologies.

Creative Industry

The sector creative industry has a lot of different sub-sectors, as design, fashion, architecture, movies, music, gaming and so on. These all together are an important part of the economy. As China is urbanizing rapidly, and the income level of the rapidly rising middle class is increasing explosively, this results in Chinese people between the ages of 25 and 35 spending more and more. The salaries in the city are now three times as high as in the countryside. Chinese consumers have more and more money left for luxury items, interior design and art objects. They are increasingly recognizing the added value of design, and the Netherlands is highly regarded in China when it comes to creative designs, as it is known as not only beautiful, but also functional.

E-commerce

China is not only the largest E-Commerce market in the world but also undoubtedly the most exciting, innovative & unique in the world. China is home to 770 million Internet users, it accounts for 40% of global retail e-commerce, and its mobile payment market is a whopping 11 times the size of the U.S. mobile payments market. In the meantime China shows a vastly growing middle class with increased exposure to the internet and foreign products, which are often considered of higher quality and status. The Chinese demand for overseas goods steadily increases every year. The Cross-Border E-Commerce market offers lots of opportunities for Dutch companies. At the same time the E-Commerce market in China is becoming more and more professional and organized. With the Cross-Border E-Commerce market in China expected to double in the next 5 years, there is clearly a significant opportunity for Cross-Border E-retailers in China.

Energy

China has the largest power generation capacity in the world and is the world’s largest consumer and producer of electricity. Although the ever-increasing demand for energy caused by its economic growth seems to slow down, the Chinese economy is still highly energy-intensive and inefficient. Also, China still relies heavily on coal to supply it energy needs. In the 13th Five-Year-Plan the government announced plans to support the transformation and development of the energy industry and promote the application of major energy-conserving technologies. It will also add 60 gigawatts of regular hydropower capacity and accelerate the development of dispersed wind power capacity. China has already been the world’s leading investor in renewable energy for years, resulting in an impressive 24% share in energy production derived from renewable recourses.

Healthcare & Life Sciences

China is as an emerging superpower, a country with opportunities contributing in the further development. An enormous growth in personal wealth and improved coverage of the health insurance (95% of the population is now covered), making the country even more interesting than just a few years ago. The policy of the Chinese government focuses on the quality of healthcare and continues to improve the creation of private facilities for the emerging middle class.

Moreover, major reforms in the Healthcare & Life Sciences sector make China a very interesting market for your international ambitions. The Chinese Government came with a campaign to set up an effective healthy China. New regulations for foreign innovative parties offer opportunities to enter the Chinese healthcare sector.

High Tech

The Chinese tech sector sees huge developments and is predicted to grow with a rate of 8% in 2018. Chinese President Xi Jinping has made developing his country’s technological capabilities a key priority, not only to wean China from its dependence on foreign technology but also to turn it into a leader in innovation. Xi Jinping has set a goal of becoming world dominant in artificial intelligence (AI) by 2030. China’s tech titans are now expanding into sectors such as healthcare, robotics, and most notably self-driving cars. China’s overseas expansion will also provide great opportunities for Chinese tech companies to drive business growth and gain strategic advantages for long-term evolution. 

Horticulture

The horticulture industry has always been an important aspect of the Chinese industry, due to its importance to the well-being of the Chinese citizen and by lifting people out of poverty it can be seen as a main driving force of the Chinese society. Today, various fresh vegetables are in sufficient supply throughout China and easy to get for consumers all-year-round in either supermarkets or retail markets. However, China is facing an increasing domestic demand, more quality demand, decreasing agricultural land, and cultivation problems which places pressure on the industry. In order for China’s horticulture sector to gear up, it must integrate both technology and skills. As China lacks both the Chinese government is seeking solutions from foreign companies through maximizing collaborations and innovative projects. Combining this favorable business environment with Dutch horticultural expertise is therefore a golden formula for your business success.

Maritime

Since 2013, the gross production value of China’s maritime industry grew by an average of 7.5 percent annually. With projects as the Maritime Silk Road and Made in China 2025 China is making a concerted effort to establish itself as a major maritime power. Despite being the world’s number one shipbuilder in 2017 in three categories (completion of ships, new orders, and volume of holding orders), China still lags behind Europe in the categories of high value ships and related high-end marine technologies. This is where the Dutch entrepreneurs can add value. Combining China’s development strategy, cheap transportation costs, availability of materials, and growing domestic demand with the well-known Dutch maritime expertise we believe that there are a billion business opportunities right there to be explored.

Water

China has only 6% of the world’s water resources while at the same time 20% of the world’s population. Consequently, the country faces several challenges regarding water. Whereas the North has to deal with water scarcity, the South experiences problems in managing the great amount of water. Overall, there are three main water problems in China; water quality, water demand and water infrastructure. The Chinese government recognizes these issues and the total investment is estimated to be €100 billion between 2014 and 2024. The Chinese water sector is expected to grow at an annual rate of 7.8% over the coming 5 years, including a growth of 5.6% for the number of enterprises in the market. In the rural areas, 300 million people do not have access to safe drinking water or the appropriate wastewater treatments like sewages. Climate change and the rapid speed of urbanization is leading to more flooding in regions like Guangdong and Shanghai. Therefore, China provides many opportunities for companies that can bring new technology to address these problems.