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Three Reasons To Like China

In 1994, China’s economy was worth around US$500m. Today, it is worth just over US$9 billion. The 18-fold growth, which is nothing short of phenomenal, puts into perspective the massive changes between my first ever direct encounter with China around two decades ago and my most recent visit to Beijing this week.

That is perhaps the first thing to like about China – exciting growth, which has not only changed the country’s landscape but also transformed the lives of its people, too.

During a taxi ride to one of Beijing ultra-modern railway stations, the cab driver told me lots – perhaps more than I had bargained for. She revealed to me that she often reminisced over her simple life in the 90s. But at the same time, she would be reluctant to give up her much-improved standard of living.

That is the second thing to like about China. Economic growth has increased the wealth of ordinary people. In 1994, the economic value of the average person in China was a mere US$469. Today it has grown to US$6,767. It is little wonder that the typical person in China now feels wealthier.

That is the second thing to like about China – wealth creation. The increase in wealth has spurred a motivation to continually improve, as capitalism replaces communism in the world’s second-largest economy.

Entrepreneurship is in evidence from humble street hawkers who are ready to haggle over the price of something as simple as a woollen scarf to established retailers who have learnt the secret of pile-them-high-and-sell-them-cheap sales tactics.

That is the third thing to like about China – marketing. China has reignited the latent desire to market in both its indigenous companies and overseas businesses. It bodes well for businesses that have established a foothold in the country.

These could range from heavyweight multi-nationals that make burgers, pizzas and fried chicken to some of our more nimble, consumer-focussed businesses such as ComfortDelGro (SGX: C52) and BreadTalk (SGX: 5DA), whose Xiao Long Baos taste as good in Beijing as they do in Singapore.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.