Why China is an Important Foreign Market

The vigorous development of “Internet +” has driven the continuous expansion and upgrading of information consumption. In 2021, Chinese Market’s  online retail sales will reach 13.1 trillion yuan (RMB, the same below), making the digital consumption market the largest in the world. As the world’s second largest economy, the second largest consumer market, and the largest e-commerce market, China has huge market size and growth potential, complete industrial chain, and China accounts for one-fifth of the world’s population. sufficient labor force.

foreign investment satisfaction

Is the Chinese market a good place for foreign investment to trade internationally now and in the future?

1. China’s business environment continues to improve.

The World Bank report shows that China’s business environment is getting better and better, and its ranking among 190 economies in the world has jumped from 91st in 2012 to 31st in 2021. With the continuous improvement of the business environment, foreign investors’ confidence in the Chinese market has also been further enhanced. According to the 2022 China Business Environment Survey Report, 58% of US companies in China will achieve revenue growth in 2021; China is still one of the top three investment destinations for 60% of companies in their recent global investment plans; 66% of companies Plans to increase investment in China this year; 83% of companies have no plans to move manufacturing or sourcing out of China. )

2. China’s many favorable factors for attracting foreign investment have not changed, the policy dividends have continued to be released, and the epidemic prevention and anti-epidemic results have been remarkable.

According to the “Investigation Report on China’s Foreign Investment Business Environment in the Second Quarter of 2022”, nearly 90% of foreign-funded enterprises are “satisfied” with the evaluation of obtaining business premises, tax payment and market access; The policy of fee reduction, the anti-epidemic assistance policy, and the “green channel” policy for major foreign-funded projects are highly satisfied. 18.5% of foreign-funded enterprises said they had expanded their business scale, an increase of 2.1 percentage points from the first quarter of 2022; 72.5% of foreign-funded enterprises said they had maintained their business scale, an increase of 1.5 percentage points from the first quarter.

3. China’s market access space is getting bigger and bigger, and market access is constantly being relaxed. China has basically completely lifted restrictions on foreign investment in the manufacturing sector. Of the 160 sub-sectors classified by the WTO, China has opened up nearly 120. China actively promotes institutional opening up, implements the management system of pre-establishment national treatment plus a negative list, and lists the access restrictions for foreign investment in a comprehensive and standardized manner in the form of a negative list.

Foreign market size

Domatters‘ Advice for Foreign Businessmen Entering the Chinese Market

Entering the Chinese market is in the plans of many companies because the Chinese market is large and growing. However, it is very important to choose the strategy through which to enter the Chinese market.

1) Maintain a distinct brand identity

The Chinese consumer market is maturing, and the logic is simple: consumer choices have increased, and business possibilities in the consumer market have increased and become more diverse.

In the three years since the outbreak, most foreign brands have been hit in the Chinese consumer market, but there are also some new brands entering China. For example, lifestyle brand LOFT, retail supermarket Costco, sustainable brand Allbirds… These foreign brands are generally not eager to seek large-scale expansion. Retaining distinct brand characteristics and even unique brand values, with the help of the power of social networks and online channels, they have tried to develop their own brands with lower costs, more designed products, more interesting experiences and community activities. market.

2) Find a digital marketing company for online marketing optimization

Partnering with a digital marketing company may be the easiest and fastest strategy to enter China. Through SEO optimization, your company increases its visibility in China, brings traffic to your company, and thus increases sales.

It is attractive that these companies are officially certified, experienced, and have a mature basic experience in handling foreign trade, and we at domatters are such a company. We have rich experience and professional personnel, and can help you enter the Chinese market in all aspects, help you build your brand, and build product influence.

3) Enter the e-commerce platform

According to a report released by the China Internet Network Information Center, there are about 1.1 billion Internet users and 790 million online shoppers in China. When it comes to cross-border e-commerce platforms, there are integrated platforms such as Tmall International, JD.com, and Kaola Online Shopping in China that will charge registered companies a registration fee, an annual technical fee, and a commission for each order. These platforms are large and have many users.

Cross-border e-commerce is a kind of direct export, and enterprises can directly communicate with consumers, which is conducive to the updating of products. Of course, there are also some stores, especially large chain stores, that are blooming everywhere, and each platform has its own online store. But small stores or stores new to China can choose one of the platforms first.

It is recommended to export through e-commerce, without the need to transfer the business entity, which is fast and convenient. But business owners should choose the right platform based on their budget and product.

Of course, if you don’t know which platform to choose or how to register and enter the platform, you can also contact domatters, we will provide one-stop service to help you enter the platform smoothly.

4) Setting up a company in China

In the past, foreign investors had to set up joint ventures in China (in order to enter the Chinese market, there are many advantages such as tax exemption, foreign exchange settlement, etc. for cross-border trade). But today, the Chinese government encourages foreign investment and cross-border trade, and has made some adjustments to foreign investment, allowing foreigners to set up independent companies in China. Therefore, if necessary, companies can set up independent companies to explore the Chinese market.