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Monday, April 25, 2011

Emerging Markets Provide Opportunities for Business Growth | DOING BUSINESS IN CHINA

Dan PaulsonDoing Business In China with Dan Paulson

When expanding into China, look no further than... Hangzhou, Tianjin, Xian...

With China now occupying second place behind the US in the world economy, its no secret that opportunity exists there. Upon traveling to China in 2009, I witnessed tremendous growth. I would often joke that you could walk atop the high rise cranes from Beijing to Tianjin and never have to touch the ground. That is as true today as it was then. China has been going through a period of dramatic growth. Companies that are well positioned and intelligent about their approach stand to significantly increase their revenue through international expansion.

Often companies look to the power markets in China when they enter the country. Some believe their greatest opportunities are in Shanghai or Beijing. The truth is these markets represent a very small part of a vast and rapidly growing economy. In a recent report on China's Emerging Markets put out by the US Department of Commerce, it is important to note that the key to China's economic growth aren't the most recognized cities. Instead, 53% of China's total imports comes through "second-tier" cities. Shanghai, Guangzhou and Beijing represent the megacities with enormous populations while other cities such as Tianjin are smaller. Of course smaller is a relative term considering Tianjin has a population greater than 11 million people.

The truth is these second tier cities have a lot going on. They are centers for trade and logistics. Some even are centers for tourism (such as Xian). What's important to remember here is when it comes to trade in China, everyone thinks of Beijing or Shanghai. The numbers speak for themselves. Not only is it much more difficult to get things going in these mega-cities, it is also easier to get lost in the shuffle.

Consider Tianjin for a moment. Most people wouldn't know where to look on a map to find it. Yet it is one of the largest port cities in China and provides a direct line of supplies to the northern cities including Beijing. The TEDA (Tianjin Economic Development Area) is home to most of the Fortune 1000 companies and works aggressively to bring business into the country. This provides much greater opportunities than Beijing.

Since opening my foreign office a few years ago, I have been impressed by the willingness of these second-tier cities to facilitate business growth. When people ask my "why Tianjin?" I have plenty of reasons to share. For those seeking to grow in an emerging market such as China. The opportunities exist if you know where to look.

For more information, please visit Dan's TNNWC Bio.

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