With its growing market, a wide range of industries, and blooming spending power, China is no doubt a top choice for a Canadian seeking to invest offshore. However, it is important to take a closer look and understand the available opportunities before setting off to incorporate a business in China as a Canadian entrepreneur.
This post highlights the top three investment opportunities that you should consider as a Canadian. However, before we get to the list of the three sectors, it is important that we briefly analyse the advantages of Canadian investors and businessmen looking to invest in China.
Why Investing in China is a Great Option for Investors?
In recent years, China has experienced vast economic growth. It has also created wealth for foreign investors in different sectors, ranging from manufacturing to IT services. With the world’s largest skilled population, easy business norms, and low taxation policies, China is emerging as one of the world’s largest markets for FDI investments.
There is a reason why businessmen in countries like the United States, Australia, United Kingdom and others have shifted their manufacturing facilities to China. They have been able to drastically bring down the costs of-
- Raw materials
- Labour costs
- Business overheads
- Electricity and power consumption charges
- Undue interference from governmental authorities
All this means that in addition to the money factor, businessmen have been able to heavily save on time, energy and effort. It also means that they have been able to expand business operations to other growing markets in Asia, including Thailand, Indonesia, India and others.
List of the Three Major Investment Sectors that can deliver Strong Results for Investors
1. Agri-Food and Consumer Goods
The potential of agri-food and consumer goods niches are correlated to the fast growth of the middle class in China. Today, China’s consumer tastes are becoming more complicated with a strong bias to premium offerings.
As you work on the details for company registration in China, you need to appreciate that the lower segment is pretty overcrowded with a lot of local products. Therefore, consider introducing high-quality products and market them as premium products.
When drawing your strategy, it is also crucial to think about China’s e-commerce market. It is one of the largest in the world, accounting for over 40% of the total e-commerce spending on the globe. Therefore, it will be a great idea to leverage e-commerce platforms to reach more Chinese.
2. Automotive Industry
China has one of the largest automotive industries in the world. Indeed, all Original Equipment Manufacturers (OEMs), from Toyota to Ford, have some presence in China.
So, if you are already selling to any of the OEMs back in Canada or in another country, it will be a good idea to consider doing business in China.
Today, there is a huge push for electric vehicles to address the problem of air pollution. Therefore, there is heavy research & development in areas such as connectivity, autonomous driving, and smart vehicles. Canada possesses strengths in these areas and a focus into the niche would be a great idea for your business.
3. Gas and Oil Technology Services
In 2019, China surpassed the US as the largest oil importer. To address the serious problem of pollution, China is promoting the use of gas as an alternative source of fuel. Again, China has well-established supply chains in areas of clean energy, and you can thrive as a service provider or equipment supplier.
To grow faster, it is advisable to avoid direct competition with local equipment manufacturers, but focus on working with them.
A number of the companies in the gas and oil firms actively source some of the parts and products abroad and resell in the market. So, if you can provide them with the products they want, they might prefer to source the products from your company in China instead of abroad.
The Bottom Line
If you are a Canadian entrepreneur, China is a land full of potential. Once you have identified the best opportunity, move to the next step, which is registering a company in China.
To make the process easier, faster, and more convenient, consider working with an agency. These are firms of experts that specialize in company registration and will also come in handy to help you during the early period of business establishment.