Though plagued by insufficient policy enforcement and unsophisticated legal systems, plenty of business opportunities are expected in China after the country privatizes its state-run enterprises, investment analysts said yesterday.
Speaking at a seminar on investing in China, Taiwanese businessmen and industry representatives agreed that as China undergoes significant reforms -- including privatizing more than 80 percent of its major enterprises -- there will be lucrative opportunities for foreign investors, including those from Taiwan.
"More than 150,000 large state-run enterprises and 48,000 small and medium companies will face privatization to sustain its competitiveness amid the impact of flowing foreign investment in China after its WTO entry," said Chen Ho-tai (
Chen also said that Taiwanese firms operating export manufacturing businesses in China can benefit from larger exports to other WTO member countries, as China will enjoy lower tariffs on its exports.
At the same time, WTO membership will mean increased imports for China -- also an opportunity for Taiwan manufacturers to enter China's large domestic market.
"China's traditional industries, such as food, cement, chemical fiber, automobile, bicycles, textiles, light industries, home electrical appliances and retailing will be new opportunities for Taiwanese investment," said Frank Y. P. Hong (
Hong has been an investor in China for more than five years.
Meanwhile, Hong said he also sees electronics, computers, telecommunications, software and the Internet as key areas of interest for Taiwanese firms.
Tsai Hung-ming (
In addition, Hong said, Taiwanese investors may also want to consider investing in China's cheap land or tourism industry, as the demand for land by foreign manufacturers is expected to grow, and tourism is anticipated to take off as well.
But despite the business opportunities China offers Tai-wanese businessmen, there are also many risks involved.
"Personal connections remain to be more dominant than laws in China, and instabilities in policies is common," Hong acknowledged.
Tsai also warned that Taiwan's major exports to China -- including machinery equipment, textile, electrical machinery and chemical materials -- which have been larger replaced in recent years by South Korea and Southeast Asian nations, could face increased competition after China opens up its markets further.
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