The Multinationals have gained a huge market and a large number of new consumers, but have not been able to realize the full potential of their investments in China. They have benefited from cheap imports but have not been able to sell their own products for equal value or quantity and have ended in a trade deficit with their Chinese counterparts.
However the Chinese too need the world markets as much as the world needs them and in this quid-pro-quo there is still a silver lining and by understanding and segmenting the market properly, lost ground can be recovered.
Ever since the Chinese came out of their Walled existence and opened themselves to the International communities, they have become the focus of the whole world. Having the largest population on Earth opened up a marketing opportunity that was beyond comprehension to most conglomerates. Added to that the purchasing power dazzled one and all and Multinationals of all hues went headlong to get a piece of the action.
Liberalization of the economy and a bent towards industrialization in a hurry offered huge opportunities for expansion. As of now as many as 320,000 foreign ventures have come up on mainland China, and they are growing by the day. China is the second largest recipient of Foreign Direct Investments that have crossed 400 billion dollars. Investments have come in from all quarters of the world, mainly from the USA.
China does offer great marketing opportunities due to its huge population and capabilities. It has abundant cheap labour, a good infrastructure and liberal open market policies that are loved by the Multinationals. There are huge opportunities in manufacturing. Labour intensive industries thrive well due to very high productivity level of the workers and vigilant government machinery that still keeps them in line with their firm labour laws. Liberalization has created more job opportunities and the growing population is easily absorbed in industrial activities.