Investing in China. Minimizing risk and maximizing opportunities.

Despite perceptions to the contrary, China still offers significant market and investment opportunities. However, it also brings risk and complication, which means that US companies need to make well-informed decisions. Pamir Consulting is a trusted partner offering accurate, strategic advisory and risk assessment for investors and companies looking to enter the Chinese market or are already there.

There is a perception that investment in China has become increasingly difficult due to the ongoing trade war between the US and China. This is simply not true, there are just some caveats. With the right help, successful outcomes can be attained.

First, high-tech is a challenging sector due to the two-way export bans on technologies such as semiconductors and Artificial Intelligence (AI) and is largely blocked to foreign investment. Second, it means that investors need to make much more considered investment and strategic decisions when it comes to China market entry and investment.

According to China’s Ministry of Commerce, new actually utilized foreign investment in 2023 was 1.1 trillion yuan ($153 billion), 8% down in 2022. However, it’s still worth pointing out that $150-plus billion still amounts to a significant market opportunity.

Market entry, strategy, and investment in China and Southeast Asia becomes more complicated

At the same time, China's State Administration of Foreign Exchange also noted that while foreign direct investment in 2023 was down about 80% from 2022; however, inflows still exceeded outflows by around $33 billion. It suggests that the huge opportunity provided by the Chinese market is still attracting investment and businesses.

For example, China’s first airliner, the C919, which is aimed at competing with the Airbus and Boeing duopoly and meeting Beijing’s goal of becoming technologically self-reliant, was in fact made up of parts and components from the US and Europe, 90%, according to the Center for Strategic and International Studies.

There is no doubting that China’s economy has faced challenging times over the last year or so, but the sheer size of the market opportunity still makes it more than worthwhile. China’s Ministry of Commerce declared that 2024 will be the “the year of investing in China” and it developed 24 reforms aimed at boosting foreign investment, although only a few have been so far implemented.

Beijing has also given 12 countries visa-free access to the region. From 14 March to 30 November 2024, China has implemented a unilateral visa-free policy for ordinary passport holders from Germany, France, Italy, the Netherlands, Spain, Malaysia, Switzerland, Ireland, Hungary, Austria, Belgium, and Luxembourg. It’s aimed at boosting foreign investment from Southeast Asia and Europe.

Caution around China’s counterespionage and anti-corruption strategy

But it is also facing caution from foreign investors who are concerned about China’s weak economy, while a series of investigations and raids on foreign companies, including the arrest of company directors, means that there is understandable caution around how China will implement its counterespionage and anti-corruption policies.

It means that calculating the upside versus the risk has become a lot more complicated. US businesses have long benefited from working with Chinese partners. Advanced manufacturing, world-class research and development, and skilled employees enhance businesses and provide resources to help support and sustain growth plans.

But at the same time, companies and investors need a thorough knowledge of local ecosystems and supply chains so you can assess and evaluate partners, identify and manage your risk exposure, and enjoy the benefits that China can deliver. That’s where Pamir can help.

Pamir Consulting is a trusted partner for China market entry and investment

Pamir Consulting offers strategic consulting and advisory services centered on market risk assessment to help companies that are seeking to invest or have already invested in China. We help them to identify and understand existing and potential future threats to their businesses. We provide strategic mitigation services that eliminate negative impact, save costs, and protect your reputation.

Our services deliver a comprehensive view of current and emergent risk – for the complete supply chain and stakeholder ecosystem – based on a unique overview of the Chinese market and an innovative qualitative and quantitative research methodology. Backed by our ongoing publication and insight schedule, our services ensure that all threats are identified, across partners, people, and your portfolio, so that you can safeguard your current and future investments.

We are experts at providing proactive, accurate China risk and strategy advice and assessments to US companies. We always have our finger on the pulse in China.

Our strategic services assist companies in building the right strategy for their businesses in China, while validating and optimizing existing strategies. We work with our clients to determine how their overall corporate strategy may be impacted by their engagements in China, including Insider Risk Assessment & Monitoring, Research & Analysis, Brand Protection & Monitoring, Anti-Counterfeiting Assessment, Mergers & Acquisitions Analysis, Supply Chain Analysis, Cyber & Data Policy Evaluation, and other service lines.

To find out how Pamir can guide you through the benefits of China market entry, investment, China business strategy, risk assessment, and other requirements, contact us today.