How Foreign Companies Manage with China’s Low Growth Goals

Published on Author haj18

Foreign companies operating in China seem to cope with the country’s low growth goal. Even though companies dependent on the government’s investment on fixed-assets such as building and infrastructure would be more affected by ones that are reliant on personal consumption, firms have already taken account of ‘new normal’ which has been forecasted for some time.

Rising purchasing power of middle-class shoppers contribute to relatively stable demand on electronic equipment such as cameras and printers despite weaker demand from government agencies. Moreover, online retail sales have largely accounted the total retail sales and the trend of e-commerce is still expected to continue.

In the automobile market, few companies set out gloomy forecasts. Toyota forecasted that the sale would consistently increase in the mid-to long term along with the growth of in land provinces.

Rather than slowing growth rate, foreign companies express more concern in demanding trade barriers and purchasing rules which the country has set up in attempt to “fight terrorism.” These limits not only can discourage initial market entry to China but also retards existing companies’ sales growth.


One Response to How Foreign Companies Manage with China’s Low Growth Goals

  1. How many companies can look to 7% revenue growth in the US? (I think it’s safe to say that US firms focus on income-elastic goods, so their revenue is likely to increase faster than GDP — another reason besides those Mr. Miller listed for not being too focused on GDP, and instead more focused on micro-level data.

    There nevertheless is a real possibility that certain sectors will end up with excess capacity. Automobiles are likely one: if you read the investor briefings of Volkswagen, Nissan and all the others, everyone is going to increase their market share and thus outgrow the market. Sorry, that’s an arithmetic impossibility!!