Many people reading this article will be interested to learn why China is seen by many as an emerging / underdeveloped economy and is part of the fashionable BRIC group of countries. The BRIC countries, Brazil, Russia, India and China and this is a group of countries put forward as potential superpowers of the future. But why would invest in China, the world’s second largest economy by nominal GDP and purchasing power, present above average risk?

The Chinese economy

One thing we need to value before looking for the Chinese economy is the significant stranglehold the Chinese government in all areas of daily life. While the control we see today is significantly weaker, at least on the surface than 20 years ago and even 10 years ago, there is still work to be done to “free markets” to develop. When the fact that China is the largest exporter of goods in the world and the second largest importer of goods gives an interesting snapshot of the current position to consider.

Strong trade relations with the likes of the USA, Hong Kong, Japan, Taiwan and Germany, for instance, the authorities have a very solid foundation from which to develop and grow the economy.However, the GDP rate per capita is only $ 7500 is the 93th highest in the world. It is this figure that perfectly reflects the very lucrative Chinese economy but also bring the public the relative poverty, which many Chinese still live in.

Changes in the Chinese economy

For many years the Chinese economy was solely run by the government, although in 1978 the government of the time realized that several Chinese companies arenas should be opened to both domestic and foreign investors. While these changes do not necessarily kick in until the late 1980s the development of the Chinese economy and China’s reputation on the international stage, is immensely since then. This often mysterious world of the Far East is now open to foreign investors, overseas companies and overseas governments, and while authorities are still looking forward to the relative control of the import markets as the Chinese people to hold great changes have taken place .

Ways to invest in China

Because of the size of China, the size of companies based in China and trade in China, it is possible to get exposure to the country through direct equities, collective investments and other similar investment vehicles. There are several large telecommunications companies in the world without exposure to China, there are few banks in the world without any form of representation in the country and this is just an example of two daily global business arenas. The main risks with regard to China, the political problems and the need for rules and laws changed to “hold” to international standards.

Conclusion

The China we see before us today is very different from the past, but there is still need for further development of business practices and regulation on business. The authorities will also need to reduce their stranglehold on the economy and businesses and entrepreneurs can flourish possible. The key to China’s growth in the future is certainly the import / export markets and improving domestic demand.