The China market for its foreign investors

China is not a good market to put your money. This is about what a Shanghai-based foreign business owner, blogging as MyLaowai, said in a post at his China-bashing blog.

I’ve read quite a few China blogs, and his is one of the most personally vicious, so negative about his host country and its people, whining, chastising, satirizing, and complaining all the time. I must say reading his posts is a very depressive experience. (But, his and guests’ posts make very good jokes, though, if you read them that way.) I can hardly associate such darkness and gloom in attitudes with a typical can-do businessman.

MyLaowai’s style of China-bashing is relentless. He bashes everything about and never has a problem with insulting and offending the country and its people. For example, he makes fun of Chinese-English the Chinese people often use; and “debunks” everything the Chinese like, e.g. the noises Chinese New Year’s celebration fireworks make.

MyLaowai’s China-market claim is dubious. My common sense tells me it’s not true.

As is known, China is a developing country, which means that it has a long way to go before it can match the developed ones in the West in terms of market maturity. Though people like MyLaowai rightly have loads to complain about, this should not stand in the way for other investors who want presence in China. After much complaining, MyLaowais must get down to work to solve or shun problems they are complaining about. If they don’t, they might fail in a market of this size:

China, which excludes Hong Kong, Macau and Taiwan, had an inbound FDI flow of US$108 billion in 2008 and had the world’s third largest economy (and according to the latest statistics, the second largest). In 2009, the country exported US$1.2 trillion worth of goods (Office machines & data processing equipment ($134.5 billion), Telecommunications equipment (123.6), Electrical machinery (101.7), Apparel & clothing (95.4), Miscellaneous manufactures (55.5)) and imported US$1.01 trillion (Electrical machinery ($174.8 billion), Petroleum & related products (84.1), Professional & scientific instruments (48.6), Metalliferous ores and scrap (44.0), Office machines & data processing equipment (40.7)).

Building a “harmonious” society is a comprehensive program of the Chinese government. Looking at it historically, nothing is new about this concept. It’s just another slogan word that represents a natural addition to China’s national strategic aims it set more than three decades ago – to make China into a country of Wealth, Strength, Democracy, and Ethics. Though it’s true that China is a country far from being “harmonious”, at least the country is making great progress towards her goals.

China is a country that had increased the life expectancy at birth of her people from an average of 35 years in 1949 to 70.4 years for men and 73.7 years for women in 2004; grown its gross national product to US$2.6 trillion in 2006; and sent her people aboard her own spaceships into the outer space. China’s achievements represented by the three examples are extremely laudable in Human history, especially considering the country’s vast land and huge population and the short time in which the achievements had been made.

For the market prospering in such a country, investors should consider joining it instead of avoiding it, as their business dictates.

However, from an individual investor’s point of view, it’s up to him or her how the operations are run. It’s their business. China’s market welcomes successful companies and eliminates losing underachievers.

Running businesses in China and the rest of the world carries risks associated with management/administration, thefts, labor disputes, legal and judicial problems, and consumer preference (MyLaowai’s grievances). If managed badly,  these risks might lead to disasters. This is what running businesses is about, isn’t it?

Contrary to MyLaowai’s recommendation, my idea is that if you are an ambitious investor, are sure that you have the products and/or services the local Chinese consumers can use, and you are well prepared for a market new to you, come here, because the market here is for you. But, before and after you set up shop here, bear these in mind: don’t try to fight local people and their ways of getting things done; and go about things within the Law and Government Regulations.