How China Stocks Work
China has one of the largest economies in the world and has survived the recession well. The Chinese government has had an active stimulus program and the economy is growing. It is little wonder many investors are seeing this emerging market with thoughts of investing in China as the best way to invest in the world. There are a few options international investors rate highly.
It is difficult to start operations in China or even to buy out existing Chinese operations as a foreigner. Instead in most instances a joint venture with a local company needs to be entered into. These deals help get around cultural traps but are not risk free as a number of foreign firms have found. Last year a number of large milk companies with ties to local milk joint venture lost millions when a chemical scandal hit.
Another option is to invest directly in Chinese companies. With a growing level of consumerism and the largest domestic population in the world opportunities for growth abound. Areas that are seeing enormous growth are wireless telecoms and construction. While this is an investment area you need to keep in mind there are a number of restrictions on foreigners purchasing Chinese shares.
Private Equity funding works but some private equity firms have chosen to avoid China. They have found that having to rely on local partners has meant they have not had the information they require or in the time frames they would like.
Property Investments are another growth area. In the two big cities of Beijing and Shanghai there are less opportunities as the market is crowded with players. However outside the main centers there is much growth able to be capitalized on.
Investing in China is an option with many advantages and possible good returns. But like any foreign market you need to have some understanding of the subtleties and rules of that market. - 23208
It is difficult to start operations in China or even to buy out existing Chinese operations as a foreigner. Instead in most instances a joint venture with a local company needs to be entered into. These deals help get around cultural traps but are not risk free as a number of foreign firms have found. Last year a number of large milk companies with ties to local milk joint venture lost millions when a chemical scandal hit.
Another option is to invest directly in Chinese companies. With a growing level of consumerism and the largest domestic population in the world opportunities for growth abound. Areas that are seeing enormous growth are wireless telecoms and construction. While this is an investment area you need to keep in mind there are a number of restrictions on foreigners purchasing Chinese shares.
Private Equity funding works but some private equity firms have chosen to avoid China. They have found that having to rely on local partners has meant they have not had the information they require or in the time frames they would like.
Property Investments are another growth area. In the two big cities of Beijing and Shanghai there are less opportunities as the market is crowded with players. However outside the main centers there is much growth able to be capitalized on.
Investing in China is an option with many advantages and possible good returns. But like any foreign market you need to have some understanding of the subtleties and rules of that market. - 23208
posted by X - Men @ 1:55 AM
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