Investing in China – Is Investing in China Worth It?

Investing in China has been a hot topic of conversation among industrialized nations ever since China went communist in 1949. The veil of secrecy that covered China for many years made it difficult for companies to get into China and difficult for investors to find ways to put money into the country. But investing in China has started to gain momentum as the Chinese government has started to warm up to the notion of allowing outside investment. The country has seen a rise in industrialization and the standard of living for Chinese people living in the cities has started to go up as well. You can start to see wealth in the cities of China, but many companies are still wondering if it is worth it to invest in a country like China where the government still controls the media and information is hard to get.

The people of China have showed a desire for democracy in the past and continue to give indications that democratic ideas are flowing among the younger people. What is helping this feeling of independence is the investing in China that western companies are doing and the change that investment is having on Chinese culture. The idea that American fast food restaurants would flourish in Beijing was not something that people thought they would see anytime soon. But many of the larger fast food chains have been encouraged to consider investing in China and the result has been the infiltration of western ideas in a very closed Chinese society. But trade with China still has its challenges and those tend to surface from time to time.

Investing in China took a hit a few years ago when toys that were made in China were showing up in American retail stores with lead paint. In a rare humble moment, the Chinese government apologized for the indiscretion and promised to rectify the situation. At that point, people thought that investing in China would pick up again. But it took months for Chinese manufacturers to really solve the lead problem and trade with China suffered.

If your company is considering investing in China, you will want to spend a lot of time reviewing the laws of commerce for Chinese companies. Investing in China is much different than most other countries. If you do not follow the rules as they are written, you may find your investment was wasted.

About Richard Wilson