China remains one of the largest growth markets in the agricultural engineering industry. The Chinese market will harbour an enormous export potential for the following years. The market of the food processing industry is also producing a positive image. The reasons for this lie in recent technical upgrades and modernisations in the agricultural industry which is supported by the Chinese government. Additionally, claims are to be found regarding the quality and quantity of food rising in the Chinese middle-class.
China is (behind France, USA and Great Britain) the fourth largest customer of German export products and the most important sales market for German machines world-wide. The Chinese market is vitally important for German engineering. The rising claims to quality and quantity of food in China are offering big chances for German companies to enter the Chinese markets in agricultural engineering and food processing.
Since the last year, China’s engineering has suffered under the weaker general economy and a decline of investments in almost every industry. The market for agriculture, however, has still large growth figures estimated for the following years. This is important because of the big changes in the economic situation in China, companies and exporters have to adjust to this “New Normal”. A diversification of the product according to the demands of different regions plays an important role in the competition.
China is the largest and fastest growing market in Asia in the agricultural branch. Besides, the market is huge and further growth is predicted, the technical level of the market is still low. The increasing demand of modernisation and mechanisation of modern agricultural engineering in China offers big chances for German companies of the agricultural engineering and supply industry as well as the food-processing industry. The German engineers have secured a good position in the Chinese market through their technology leadership. Their lead in precision, productivity, durability and energy efficiency is appreciated by Chinese customers. Naturally, there will be challenges; not only because of the local market becoming more complex, but also due to other strong competitors settling while the number of potential customers has grown. The German engineers have to pay attention about localisation in the Chinese market. There are big potentials particularly in the medium price range and in the import of high-quality machines from Germany.
Of huge importance is the fact that the agricultural and food sector is due to a share of 10 percent of the gross domestic product in China. In light of the population growth and the simultaneous increasing spending power of the middle-class, China is facing enormous challenges in the local food security. The demand of processed food with rising available income and claims of food safety will definitely add up. Accordingly, there are big market potentials in the value chain – from the improvement of the cultivation methods, over the establishment of continuous chill chains, to the development of sufficient store and transportation capacities.
The country seems to have been established as a permanent economy centre. Ignoring this could turn out as a mistake in future. European mid-sized companies have repetitively shown that they are able to adjust to the changing conditions in China.
The ECOVIS Beijing team consists of well-trained and experienced consultants. Our Chinese and international consultants on-site are proofed tax consultants, auditors as well as lawyers. We are supporting you at your market entry in China, so you can also benefit from the positive development. Through our extensive market knowledge and with our German-Chinese team, we are offering our immediate and professional support. Our services reach from accounting and auditing as well as tax and law consultation to advice in business creation, establishing branches in China, recruiting and market launch.
For further information about market opportunities in China read our articles about E-Commerce in China: Chances and Challenges for Foreign SMEs or Beijing will be the only true competitor to Silicon Valley.
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Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: firstname.lastname@example.org
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