Published on: 03/April/2022
Are you thinking of opening a business in China? It is one of the best decisions for your business because it can access a massive market of 1.4 billion people in China. Furthermore, the Chinese administration has adopted a raft of economic reforms that are making the country a revered global business hub. One of the primary questions that entrepreneurs ask when setting up companies in China is, “what is the best location?”
This post was created to help you determine the best location for your firm. We will also tell you why working with Hawksford is the best way to avoid common mistakes that people make when selecting locations for doing business in China.
China in Numbers
The most notable attribute about China is its meteoritic growth that has thrust it into the world’s second-largest economy. This is not all. According to the World Bank, China is expected to surpass the US as the largest economy on the planet. Let’s look at other numbers that describe China for entrepreneurs:
- In 1979, China adopted reforms that have resulted in a steady economic growth of about 10% annually for the last 30 years.
- In 2020, China’s GDP was estimated at USD18 trillion.
- By the end of 2020, the Chinese bonds grew to USD388 Billion.
- The service industry contributes 51.6% of China’s GDP. It is followed by industry and agriculture that contribute 40.5% and 7.9% of the GDP, respectively.
- China is the wealthiest country on the globe. Since 2015, the country has had the biggest middle-class population on the globe.
The Most Attractive Regions for Opening a Business in China
One mistake that people often make when opening a business in China is thinking that it is a homogeneous region. The country comprises different provinces with distinct characteristics, and it is crucial to understand them before deciding where to locate your business. To help you out, here are some of the best regions to base your transactions:
- Shanghai Region
Shanghai City is the most populous urban region in China. It is an international hub of commerce, finance, logistics, and innovation and has the highest GDP in the country. In 2018, the city’s GDP was RMB 3.3 trillion. To keep the cost of operations low, you might want to consider using the Shanghai Free Trade Zone.
Shanghai, and the neighboring regions, including Zhejiang and Jiangsu, would be an excellent place to open a business in:
- Electronic information.
- Bio-medicine.
- Auto-parts.
- Petrochemicals.
- Fine steel.
- Beijing-Hebei Region
Beijing is the second-largest city in China, with its GDP of RMB 3 trillion trailing that of Shanghai closely. What makes this city stand taller than its peers is that it is the seat of the Chinese central administration. Therefore, it is the headquarters of the country’s top state-owned companies. By 2018, Beijing was home to the biggest number of Fortune Global 500 companies in the country.
Being the government headquarters, Beijing boasts of highly developed infrastructure and has been attracting a lot of foreign investors. We must mention the three-year action plan (2019-2022) of the Beijing Municipal Commercial Bureau that was designed to attract more foreign investments and talents. You can take advantage of this plan to grab the best opportunities for your company.
Other high-potential areas for opening a business in China include Chaoyang (Beijing Wall Street) and Hebei. These regions are recommended for tourism, healthcare, education, and high-end technology businesses.
- Chongqing
If you want to set up a company in the Chinese inland, Chongqing is considered the gateway. The main reason why investors select Chongqing to the larger cities is that it is pretty cheap. It is also part of the Belt and Road corridor and, therefore, an important shipping hub.
Chongqing and other neighboring regions, such as Chengdu, can be excellent picks for your logistics, manufacturing, and hospitality business. Remember that you need to start by carrying out further due diligence, reviewing competitors, and understanding the targeted market.
This post has demonstrated that although China is one country, every region has its own characteristics. You can learn more about these regions and pick the perfect one by working with Hawksford, the best agency for opening a business in China. They will also be there to help you carry out due diligence, payroll management, and accounting needs.