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Learn from the pioneers

2011

Many foreign companies regard China as homogenous and assume that, as they migrate westward in search of new markets, they will encounter the same China they have become familiar with in the more highly developed eastern coastal regions. They will not.

The 12 provinces of Western China ("the West") comprise two-thirds of China's land mass but barely a quarter of its population. But that's still 365 million people, more than the population of the 17 countries of the eurozone. Recent consumer purchasing power statistics suggest the West as a whole is about six years behind Eastern China ("the East") in its economic development. It is unlikely to follow the same growth trajectory as the East, but the statistics and the government's commitment to raising the region's living standards create a favorable environment for both industrial and consumer enterprises.

It is almost virgin territory for foreign companies. Only 6% of the 260,000 registered foreign enterprises in China are based in the West. Real opportunities exist for some industries in the West, but many risks and challenges await.

A recent Roland Berger study on behalf of the German Ministry of Commerce asked experts and the China CEOs of major European companies about the importance of various factors when deciding where to locate operations.

Experts

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