Niche opportunities abound in China

During the last 10 years, a sea change has occurred as to how Indian businesses view China. The fear and awe has been replaced by a realistic understanding of Chinese import ‘threat’. Over the decade, Indian businesses acquainted themselves with Chinese Markets by visiting Chinese trade fairs and developing business relationships.

However, during this limited exposure to China what Indian businesses, particularly SMEs, missed was the rise of Chinese Markets: for imported consumer and producer goods as well as for raw materials and intermediate products for processing for export to third-country Markets. Indeed, China is set to overtake Japan as the biggest importer in Asia by around 2015. Many countries, particularly Asian, have lapped up the opportunities in the burgeoning Chinese market.

Asian exports to China increased on average by over 46% a year from the year 2000 to reach $52.4 billion in 2005. That was much higher than the annual growth rate of 4.3% in Asian exports to all Markets outside China. Malaysia became the largest exporter to China ($12.7 billion) within Asian in 2003, a position previously occupied by Singapore at $10.1 billion. The previous trade deficits became surpluses in Malaysia and the Philippines, while deficits were lower in Thailand and Singapore in 2003. The Philippines’ exports to China have quintupled since 1999 (2005).

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