China’s Evolving Story

Great Wall, China

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Below is a news item that we sent today to clients and friends of JFP Holdings regarding some of our findings since I started the company two years ago. If you are not on our mailing list and would like to be included on all future mailings, please respond to MTD or to my e-mail address which is included at the end of the post.

Since JFP Holdings was founded two years ago, American, Chinese and European companies of all sizes have benefited from our on-the-ground experience and extensive range of contacts to expand their businesses, both in China and abroad. Considering the country’s high growth rate and constantly evolving economy, it’s no surprise that we have witnessed many changes over these past few years.

China’s capital markets are developing, providing new financing opportunities. The most dramatic change we are seeing is the rapid development of China’s capital markets. Today, foreign invested enterprises (“FIEs”) and private Chinese companies have unprecedented opportunities to access funds in China, and we are working with many of our overseas and Chinese clients to tap into these new capital pools. We are finding new sources of capital from domestic PE firms interested in funding FIEs and companies in China’s private sector. We are working with Chinese financial institutions that are willing to make four- to five-year loans, loans that were only available to large state-owned enterprises in the past. Also, we are structuring long-term leasing programs for land and buildings, thereby reducing the amount of capital needed to start up a factory in China. These options were not available when I first came to China, and are covered in more detail in my blog post: New Sources of Capital in China.

Good partners with cash can now be found in China. Many Chinese companies now have cash and no longer rely on foreign partners to provide all of the capital in a joint venture. Instead, their priority is to gain access to world-class management, good technologies and high-quality products, and they are showing a strong interest in establishing joint ventures, entering into license agreements and, increasingly, investing in or acquiring companies with these resources. This has enabled us to identify many financially strong potential Chinese partners for our clients.

A presence in China is key. For almost any company, whatever the product or service, China remains the single largest growth opportunity in the world. Companies with innovative and affordable technologies that offer solutions to China’s many problems are finding an especially receptive audience here – one that is willing to embrace new ideas, and embrace them quickly. However, in order to fully capitalize on these opportunities and gain a significant piece of the China market, it is imperative to have a presence in the country. As testimony, the CEO of one of our clients told me that export sales doubled after we helped him establish his China operation.

JFP Holdings can help. Over the past two years, JFP Holdings has worked with companies in industries as diverse as auto parts, clean-tech, consumer goods, distribution, education, financial services, health care, industrial products and equipment, insurance, Internet and renewable energy. We now have a dozen experienced professionals in Beijing, many of whom worked with me for ten or more years at ASIMCO, as well as representatives in the United States, Europe and the United Kingdom. If you’d like help with your China business, we invite you to visit us in Beijing or e-mail me at: jperkowski@jfpholdings.com.

Sincerely,

Jack Perkowski
Founder and Managing Partner

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