Why China is an emerging market?
The businesses across the world are sinking their capital and time in emerging countries to take advantage of lying opportunities. Emerging markets are developing countries and are striving to become developed countries in the future. The emerging markets are often termed as transitional as they are transforming from a closed economy to an open market economy. It is a term to describe a country that is in the process of rapid growth and industrialization. The emerging-market provides many opportunities to the investors.
Characteristics of an emerging market
- Generally, emerging markets have a lower-to-middle per capita income.
- They also have a higher growth rate than in developed countries. The developed countries including U.S, Japan, Mexico, and Germany observed economic growth less than 3 percent in 2018 whereas the developing countries China, India, and Vietnam noted the economic growth by around 7 percent.
- The currency is volatile in emerging markets. Also, commodities are vulnerable. Because the emerging countries do not have the power to influence those movements.
- The emerging markets usually have some kind of regulatory body as well as a common currency. For example, China, the emerging country has a common currency, Yuan and regulatory
Why China is an emerging market?
China is one of the emerging markets in the world. It is the world’s factory where people manufacture a wide range of products to serve the demand across the globe. The country has a lot of scope for marketers to grow.
- Since the past two decades, China has reported single-digit economic growth, making it one of the fastest-growing economies in the world. It is also expected to outperform the United States.
- Also, it bears a considerable amount of U.S debt and is assured to become the largest economy in the world, gaining importance in global politics.
- Most of China’s largest industries are being privatized and the government is striving to privatize more companies. Privatization on a large scale will bring more innovation and growth opening doors to international investors.
- China has a strong finance service sector. The government is having a sound financial record responsible for lending. The buyer has an attitude of saving money in the bank ultimately providing banks to lend out to the new businesses.
Is China a better option for investment than the U.S?
- The United States is the largest consumer of Chinese exports. The U.S depends excessively on China for low-cost goods that meet the American consumer’s demand.
- The U.S heavily depends on China to provide capital for its budget deficits. China holds a large proportion of U.S Treasury Securities.
- China effectively implements technology than any other country in the world. Though the U.S is leading in discoveries of artificial technology, China is indeed a leader in the implementation of artificial intelligence. For implementation, it needs speed, data, execution and government support. China is way ahead than American counterparts.
- China’s environment is an amalgamation of ample capital, huge market and bold entrepreneurs who are ready to start and fail in the business. The marketers are keen to find market opportunities and to build products.
- According to the International Monetary Fund, China’s economy produced $25.3 trillion in 2018 due to its purchasing power parity, making it the world’s largest economy and the U.S is the third-largest producing $20.5 trillion.
- China has the world’s largest population and relatively poor in its standard of living. It allows companies to pay their workers less than workers in the U.S. This ultimately leads to making products cheaper thus allowing manufacturers to outsource jobs in China.