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Trade and Business Opportunities in China

 

There are a multitude of trade and investment opportunities for exporters in the China market. Some of the major sectors currently experiencing rapid growth are: processed food and beverages, gambling, transport, IT and telecommunications, minerals and energy, environment protection, building construction products and services. Three of the major growth industries though are the exporting of education, processed food and wine products.

Education

The foreign education sector in China is split in two - students studying abroad and foreign education service providers establishing a presence in Shanghai. The type of students interested in Australia includes those who desire pure language study and those who wish to study university degrees right through to post-graduate/MBA studies etc.

As the cost of overseas study remains high, pursuing qualifications through foreign accredited institutions in China has become more practical and more popular. Course delivery can take two forms. One is the foreign school catering exclusively to expatriates, which can be wholly foreign owned and the investor need not be an education entity. The other is a co-operative arrangement or twinning with a Chinese institution where local students are the target markets. These schools are encouraged to provide vocational education. Foreign investors must have a Chinese partner who can lodge an application with the local education authorities for approval.

Processed Food

As Chinese become more prosperous, demand for more sophisticated products, with a greater emphasis on quality, convenience and freshness continues to grow. This means that considerable unsatisfied demand for elaborately processed foods exists.

There has always been a stable market for imported foods in China, especially in respect to hotels, bars and western style restaurants. Increasingly, Chinese consumers themselves are becoming to lay great stress on brand and brand loyalty than before. This means that companies with a strong international brand and aggressive marketing strategies continue to hold large market shares. Foreign companies that have been given permission by the Chinese government to set up supermarket chains include Yaohan, Wellcome, Parkson, Park 'N Shop, Careful, Pricemart and CHC. These companies are setting up supermarkets in a limited number of locations. When China enters the WTO (maybe sometime in 2000), it is hoped that official policies on foreign supermarket operation in China will be less regulated.

Wine

Wine is especially popular in the large cities of China (Beijing, Shanghai and Guangzhou) and has great potential given the increasing disposable income of local people, the health benefits of drinking wine and the government campaign against grain-based alcoholic drinks. However, many Chinese have little knowledge of table wine, and few people can differentiate quality and appreciate the taste. With this in mind, and excellent promotional tool could be wine appreciation and information courses to educate food and beverage managers, restaurant owners and waiters. This would also attract high-income earners and may ultimately stimulate the consumption of quality wine.

The Chinese wine market is price sensitive and consequently locally manufactured wine holds the largest market share. French companies are active in setting up joint venture either growing grapes and manufacturing wine or bottling bulk-imported wine. Better quality wine is limited to hotels and restaurants and consumed mostly by Western diners. To successfully sell wine in China, local bottling of bulk-imported wine is considered the most economical and practical way to supply the local market with a competitively priced product.

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