In late 1980’s, China started to emerge as a fast growing economy, with a high growth rate. After 3 decades, it has become the second largest economy in the world.
China since the 1980s
The market of China is a complex market with rapid economic development and change, a large population, diverse tastes and different experiences. Rapid economic development has impacted purchasing tastes and social behavior. Its economy is diversifying too, with so many sectors flourishing with complete expertise.
Until the 1980’s, the poverty level in China was too high and there were no developed economic sectors. The country had unskilled and cheap labor force in abundance. In 1978, the decision to make foreign investment open in China was taken and there were major reforms made in the infrastructure for the next few years to encourage the foreign investors. At the same time, the agricultural sector of China was established at a fast rate.
In 1980’s, foreign companies started setting up their manufacturing facilities in China due to inexpensive labor cost. More and more companies began to move their facilities to China with time and the economy started to flourish. An increase in income lead to educational reforms and the workforce became more skilled. This lead China to move from the production of simple items to sophisticated ones, including electronics and automobiles.
Changes in the Economy Require Strategy Research
China turned out to be a fast learner and used every available opportunity to hone its labor force. By 2005, there was a shortage of labor recorded and the work force stated to have better opportunities to select employment with high wages. This led to foreign companies moving their manufacturing facilities from China to other countries with cheaper labor costs.
The government of China also supported the development in order to expand their internal economic systems. With the foreign manufacturers moving out, China established their own manufacturing systems. Today, China is the largest exporter of manufactured consumer goods and rice in the world and the second largest importer of raw material. The two major sectors of the country remain agriculture and manufacturing, employing more than 60% of its workforce.
The Importance of B2B Strategy Consulting
The China market is still growing at a stable and fast rate and this growth is giving rise to ample opportunities for B2B marketers to venture into the country. B2B sectors that are increasingly benefitting from this growth are the e-Commerce and online service sectors and is estimated to grow at a high rate. Understanding the leading trends and forces in the China market can help provide business investors an insight to several untapped, small markets in the region that can be profitable.
Chinese Companies Going Abroad
In recent years, China is expanding its globalization strategy under which it is moving its business presence on a more global level. Reforms are being made to encourage Chinese FDI (Foreign Direct Investment) in other countries in order to improve the brand recognition of Chinese manufacturers.
China is increasingly focusing on resource-rich countries in Africa, Latin America as well as developed markets in Europe and North America. Chinese companies are increasingly investing abroad, as the Chinese economy develops into a dynamic economy.
As China expands, new opportunities and challenges are arising for foreign and Chinese companies in seeking growth. Business managers are increasingly looking to Market Research in China to help provide insight to a variety of topics such as profitability, maturing markets, unmet needs, acquisition opportunities, innovation, competitive insight, customer insight, regulatory affairs and beyond.