Since early 80s 1000s of foreign companies invested trillions of dollars in China, in the start few companies stepped in China but after the 21st century investing money in China became trend for foreign companies. These companies include many types of industries but mainly, Software, Mining and Cosmetics industry, many big names such as Google, Microsoft and Apple also have their offices in China. Now the question is what are the reasons why foreign companies are moving to China?
Recently Apple also have starts assembling its main product “iPhone” in China. So, this is not a just fashion to move companies to China, because these big companies only love to increase their profit, So there some important reason behind this move of foreign companies. Below are the some reasons why foreign companies are moving to China.
1: Change In World’s Economy Balance:
The main cause of the interest of the foreign companies in China is due to the change in world’s economy. Europe which “was” the strongest economy area of the world, but now after some crises in the main countries in the European nations like Italy, Spain and Greece, the whole Europe starts declining. America is also going down day by day but its is not realizing this situation yet.
But when we take a deep look on the Asian Countries like Malaysia, China and India they are developing day by day, companies from around the world are investing in Asia because they are getting extreme advantages from these countries. The main factor is that now Europe is declining but on the other hand Asia is developing, it is a true fact do not matter at all if European nations believe it or not. This is one of the main cause why foreign companies are moving to Asia particularly China.
2: Big Market Great Man Power:
This is another main factor which is forcing foreign companies to move into China, big market is the biggest advantage which foreign companies are getting from China. If These companies do not export these products from China to nations like European nations then too they can make huge profit by selling their products to only Chinese people. But keep in mind China’s current population is about 1.4 Billion ( its huge 😉 ).
On the other hand Foreign Companies can also enjoy huge man power from China, as China have 1.4 billion population then these foreign companies will never ran out of man power fuel while staying in China.
3: Low labor Cost:
This is one of the main factor for which Foreign Companies are moving into China, as China contains huge population that’s why there are very low labor costs which foreign companies have to bear in China. Due to this factor these companies are making huge profit and are saving millions of dollars.
4: Low Import Duties and Land Costs:
This is also one of the mains reason among top reasons why foreign companies are moving to China. If these companies want to import anything from any county then they will get huge concessions from Chinese government, this is also a plus point.
But there is another positive factor, if any company wants to extent its working area we mean wants to build new factories 🙂 then they will also get land on low cost.
5: Friendly Government and Stable Politics:
This is also an important thing which foreign companies consider before investing in any country. China have stable government and stable politics So, there Stock exchange will never fluctuates. There is another plus point, which there are few labor unions and there are no labor demands in China.
So, while staying in China Foreign companies will never face any problem by their labors. This fact will never stop there production process and will keep it on the right side always.
6: Stable Currency Rate and Better Security – Last Reason Why Foreign Companies are moving to China:
Stable currency rate is also main reason why foreign companies are moving to China, Big companies consider currency rates first, because it contains a lot of risk, the little fluctuations in Currency rates can turn over big companies from Hero to Zero 😉 . But as everyone knows that China’s Currency rates are very stable.
Security is also a main factor which influence a lot on the growth of any country, if security is Good then country will progress if it is not good then it can harm any country’s economy. Power generation system in China is also very good So, big companies also do not have to worry about this factor in China, China have world’s biggest Dams 🙂 .
Know the best:
So, these are the reasons why Foreign Companies are moving to China, after having a look on this list we come to know that Foreign investors can make huge profits in not only in China but also in Other Asian countries. These companies can enjoy low labor rates, cheap import duties, good security and good power system. We hope you will like the stuff but stay in touch with us because there is coming more 🙂 .