The China Opportunity

China is a large and populous country comprised of a vast commercial spectrum, ranging from first-class global corporations, financial institutions, infrastructure and systems on the one hand, and hundreds of thousands of state-owned enterprise, private mid-sized companies, and small family and sidewalk businesses on the other hand. Governing over all is a web of central, provincial and local government policies, regulations and controls which include varying degrees of both socialist and capitalist elements. The country is in the midst of an unprecedented transition from a planned economy to a market-driven economy, providing a wealth of interesting yet challenging investment opportunities.

China's economy experienced rapid growth since economic reforms started in 1978. GDP growth, averaging 10% annually during this period, has helped China become the third largest economy in the world by 2008, accompanied by low inflation, high employment, and strong fiscal and external balance of payment positions.



China's land area exceeds 9.6 million km2, making it the world’s third largest country after Russia and Canada. Moreover, unlike Russia or Canada, its vast expanse from north to south means that it can profit from various climates. Combined with China's geologically diverse terrains, this great natural resource allows for a wide diversity of production industries and agricultural plantings to thrive.

Due to various factors, including historic legacy, demographics and geography, the various regions of China have developed to markedly different extents, and therefore offer economic and investment opportunities today of very different stages and nature. The investment climate of China's regions can be ranked as follows:

Regions, in order of investment and economic development (Highest to Lowest)

Pearl River & Yangtze River Delta (Jiangsu, Shanghai, Zhejiang, Fujian, and Guangdong) Bohai Bay (Shandong, Beijing, Tianjin, and Hebei) Central (Anhui, Henan, Hubei, Hunan, and Jiangxi) Northeast (Heilongjiang, Jilin, Liaoning) Southwest (Yunnan, Guizhou, Guangxi, Sichuan, Chongqing, and Hainan) Northwest (Shanxi, Shaanxi, Inner Mongolia, Ningxia, Qinghai, Gansu, and Xinjiang)

As China develops, the government is making it a priority to increase economic and investment activities in the less developed Central and Western regions of the country. DPG believes the traditional rural hinterlands dotted with antiquated state-owned enterprises and smaller collective enterprises are transforming steadily into dynamic economic areas where, in our view, the next wave of opportunity and development will arise.

Please choose one of the links below to read more on the China Opportunity:

A Growth Economy
A Market for Investment
Private Equity Opportunity
Summary