China’s profitability in the economic crisis

Following the beginning of the economic crisis last year in 2008, China has seen a major shift in its imports and exports, both domestic and international. This has taken a major toll on cities such as Shanghai, Guangzhou and Shenzhen-Major export cities throughout the East Coast that have helped to expand China‘s reach into Western countries. Beginning first quarter 2009 Shanghai saw a decrease of 15% year on year, with international freight volumes in Guangzhou facing the worst decline at
25% and Shenzhen following up a mid 21% based on reports from leading global analyst companies such as Bloomberg and Forbes.

This hasn’t had a major impact upon the Chinese economy, however, due to the fact that the domestic trade between the South and the North has increased substantially. Freight from Dalian and to northern China, for instance, has increased by 50% year on year and other ports in the north are showing growth due to strong domestic demand. This comes as China is shifting from an export dependent society into a consumer market and is also emphasized in its 8% economic growth this year alone despite the world gripping economic crisis.

What does this mean for people seeking to export goods from China or outsource factories here? With reduced freight comes discounted shipping prices over previous charges, allowing smaller companies and larger companies alike to take advantage of the affected market. It also indicates a strong growth of China‘s economy, which signifies that any investment in China now could profit companies greatly in the long run.

This is also an excellent opportunity for companies that have normally conducted business domestically to seek expansion overseas. Now more than ever is an excellent time to invest in both coastal financial centers such as Shanghai as well as internal production centers such as those in Shenzhen and Guangdong provinces in order to realize the greatest gains.

In short, investments in both production or outsourcing goods in the near future rather than the far future as well as possible overseas expansion into the Chinese market may hold profitable prospects for companies worldwide.

Written by Alexander Grimes

Written by Alexander