Mainland China
As in 2008, mainland China tops the Grant Thornton emerging markets opportunity index by a significant margin. The most populous country in the world, it is also home to the second largest economy in the world today. A huge consumer market, an increasingly open economy and its extremely rapid trade growth offer a myriad of business opportunities for potential investors. Between 1990 and 2000, inward FDI flows averaged US$30 billion; by 2008 these had risen to US$108 billion (United Nations Conference on Trade and Development – UNCTAD, 2009).
Figure 7: Expectations for research and development Balance percentage of businesses indicating an increase against those indicating a decrease Mainland China
52
Vietnam
51
Taiwan
47
Philippines
42
Turkey
41
Malaysia
39
Italy
36
Brazil
35
India
34
Global average
25
IBR survey results
Business optimism dropped sharply in mainland China last year as the threat of a drop-off in exports and FDI from credit-strapped investors took hold; a balance of +30 per cent of businesses in mainland China were optimistic about the year ahead in 2009, the lowest since surveying began in mainland China in 2006. However, this year businesses were much more optimistic (+60 per cent), reflecting the strong growth forecasts for the economy. In preparation for the upturn, 64 per cent of businesses in mainland China had looked at new target markets and 49 per cent at new products/services.
Source: Grant Thornton IBR 2010
“To develop quicker, foreign investors should be paying more attention to developing and training local talent.�
Xia Zhidong Grant Thornton, China T +86 10 88 39 56 60 E xiazhidong@cn.gt.com W www.grantthorntonchina.com.cn
10 Emerging markets