Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.
Although a challenging marketplace, China’s vast size, growing wealth, changing demographics, and economic transformation continue to create opportunities for well-prepared U.S. firms.
Although a challenging marketplace, China’s vast size, growing wealth, changing demographics, and economic transformation continue to create opportunities for well-prepared U.S. firms. China represents roughly two-fifths of non-U.S. global gross domestic product (GDP) and its market is larger than that of the United Kingdom, Japan, and Germany – combined. And though Chinese economic growth has moderated in recent years and contracted sharply in the first quarter of 2020 due to the COVID-19 pandemic, the Chinese economy has rebounded much more quickly than most of the world. The IMF forecasts that China will be the only major economy to post positive growth in 2020 and its economic growth will rank among the top economies in 2021.
China’s status as a global manufacturing powerhouse is just one driver of this growth. Over the past two decades China’s middle class has experienced one of the fastest growth rates in the world. The shift from the traditional low-wage, labor-intensive manufacturing economy towards more technology-intensive high value-added production, has fostered a burgeoning middle class in China that has generated increased consumer demand for a broad range of products. Indeed, Chinese consumers play an increasingly important global role, now the world’s largest market for a wide range of products from vehicles to air conditioners to video games. As a result of this growth, retail sales in China are expected to outpace those in the United States within the next couple of years.
Many of the headwinds that the Chinese economy faces, including an aging population and shrinking labor force, falling return on capital, and the need to provide services to a population with greater expectations could open opportunities for American firms. Despite tensions in the U.S.-China bilateral relationship, American products continue to be viewed favorably by Chinese consumers.
As part of the Phase One Trade Deal signed by the United States and China on January 15, 2020, the Chinese agreed to take action to address several structural barriers in China that impeded export of U.S. products and committed to substantial increases in purchases of U.S. goods and services in 2020 and 2021. China’s commitments cover a variety of U.S. manufactured goods, food, agricultural and seafood products, energy products, and services. China’s implementation of these commitments should provide significant opportunities for American exporters.
In this report, we will explore several top prospect sectors, including:
- Cosmetics and Toiletries
- Design and Construction Services
- Environmental Technology
- Travel and Tourism