The world’s leading emerging economy accounts for 15% of global GDP. Its population is nearly 1.4 billion. 25% of unicorns—startups valued at over $1 billion—are Chinese.
Manufacturing is China’s mammoth industry—contributing close to 50% of China’s GDP—with mining, energy, and agriculture up there too.
But, with a growing middle class and huge government initiatives like Xi Jinping’s Belt and Road Initiative, new opportunities are being created for Western executives in China every day.
BusinessBecause caught up with Bo Ji—China expert and director of the China Mini EMBA+, a nine-day, five-city course for Western executives looking to do business with China—to find out more.
Here’s five high-potential industries ripe for disruption in China:
1. Clean Energy
In 2013, the Chinese government pledged $277 billion to combat China’s problem with air pollution. With the pollution problem well-documented, there are huge opportunities for entrepreneurs and businesses in the clean technology—cleantech—space.
“We’ll see a lot of innovation in green technology and cleantech,” says Bo. “Dealing with air and water pollution; all those things are in the national interest. The market is huge, and, if you’re an entrepreneur, you’re likely to receive government funding as well.”
Over 16% of the Chinese population is over 60 years old—around 230 million people. According to the World Bank, a massive 40% of the Chinese population will be aged over 60 by 2050.
Evidently, the healthcare and elderly care market in China is huge. And the need for developments in infrastructure and pharmaceuticals is there. State spending on healthcare infrastructure could reach $1 trillion by 2020—7% of China’s GDP.
“The Chinese people are enormously conscious about their health,” says Bo. “Unfortunately, China doesn’t have a lot of new drugs—foreign pharma and nutrition supplement companies are very interesting for the Chinese.”
3. Food and Beverage
“Food safety is also a big issue in China,” Bo continues. “So, people tend to buy a lot of imported products. We import so much milk from outside China it’s crazy! In our supermarkets, we have milk from Australia, the Netherlands, Germany, France, even Poland—almost every single country.”
With a massive population, more ready to spend, there are big opportunities for food and beverages firms in China. China’s food and beverage market grew at a rate of 30% annually between 2009 and 2014. Over the past two years, venture capital investment in China’s food and beverage startups has reached close to $2 billion.
A notoriously tough industry to break into, but leading luxury firms have a huge market in China—Chinese consumers account for around 30% of all global luxury sales, according Bain & Company.
While emerging luxury firms may worry about Intellectual Property protection in China, Bo says entrepreneurs shouldn’t be put off.
“A copycat might be your promoter,” he says. “You can balance off the market share you lose from the copycat with the savings on the money you’d spend to market your product. Plus, a copycat means market validation,” he continues. “If nobody wants to copy you, then your product has a problem!”
Cleantech, fintech, edtech, agritech, virtual reality, artificial intelligence—anything tech has big potential in China.
In 2012, 6% of all retail purchases globally were accounted for by online sales in China. WeChat, Tencent, and Chinese e-commerce platforms like Alibaba are gaining global influence.
Big data—that buzzword of 21st century tech—is big business in China too. Guizhou, which recorded the third-fastest economic growth of China’s 31 provinces in 2016, is fast-becoming China’s ‘Big Data Valley’, hosting China’s Big Data Industry Expo 2017.
The opportunities in China are there. But how can you take advantage of them?
“My advice is be entrepreneurial; take action,” says Bo. “And really understand the differences between Chinese and Western culture—that will make it much easier to work with the Chinese.”
Getting to grips with how to do business in China can be tricky. The China Mini EMBA+ explores topics like how to negotiate with the Chinese, how to build a successful Chinese business presence, and strategies for entering the Chinese market.
Starting in London in March 2018, the program’s participants will complete three modules over the course of three months; four days in Europe—in London and Paris—either side of a five-day expedition in China—in Beijing, Shanghai, and Shenzhen.
The new program is being launched by China’s Cheung Kong Graduate School of Business (CKGSB), whose elite-level alumni lead one-fifth of China’s most valuable brands, and include Alibaba founder Jack Ma.
What is the China Mini EMBA+? Bo Ji will be leading a webinar to explain how the China Mini EMBA+ provides professionals with the China insight and international perspective necessary for global business success. The webinar will run from 11am to 12pm GMT on Monday December 11th 2017. Register for free here.