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Why the Year of the Rooster Matters for Entrepreneurs

 

Since 1978, Deng Xiaoping’s reform and open trade policy set China’s GDP on an unmatched growth rate in world history. For 30 years, China’s GDP grew 10 percent on average year on year. More recently, China’s growth has begun to level out, with 2016 carrying the lowest growth rate in 25 years of 6.7 percent. The Shanghai and Shenzhen stock market responded with high volatility and restrictions imposed by the government in an attempt to reduce risk while China’s economy transitions from manufacturing to more and more service and consumption.

China is set to become a leading consumer market, eventually rivaling the United States. Its economy is diversifying and while this may signal a slowdown for some foreign investors, it opens the windows to new kinds of investment opportunities: imports and services. At the Hong Kong border, the massive city of Shenzhen has become a huge and growing technology Startup Hub. Electronic reliant tech companies have moved to Shenzhen to take advantage of the readily accessible electronic market (the largest and most advanced in the world). The other go-to hotspot for foreign companies, Shanghai, has seen a rise in Wholly Foreign Owned Enterprises of diverse sectors such as diverse trading, services and technology.

China’s economic revolution is changing the way foreign investors approach the market. Manufacturing is slowing down, consumption and the service industry are on the rise in China. Between January and December 2016, foreign investment in China exceeded US$125 billion, a growth of nearly 35 percent over the previous year and is expected to keep rising throughout 2017 as investors attempt to catch the incoming consumer wave.

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