For many Western businesses, the attractiveness of the Chinese market is huge. Since 1995, China’s economy has grown 18.5 times, from US $ 735 billion to US $ 13,600 billion (excluding Hong Kong Special Administrative Region). In terms of purchasing power parity, China is now the number one economy in the world.

Over the years, many foreign companies have tried to find ways to build supply chains within China and set up mechanisms to reach the market of more than 1 billion people. American companies in many industries have invested more than US $ 276 billion in China since 1990. In 2018, foreign direct investment (FDI) from all countries into China reached US $ 139 billion.

China is also the largest retail market for General Motor. Meanwhile, while sales are declining, the Greater China region (including mainland China, Hong Kong, Macau and Taiwanese territories) still brought the third-largest revenue to Apple in the year. 2018.

Potential but not easily accessible

Despite its potential, for many Western companies, the way to access the Chinese market is still quite bumpy. A new study by The Business Times shows that China remains an inaccessible economy for most American businesses. Among the S&P 500 companies, only 41 companies generate about 10% of their global income in China.

In 2017, an analysis by Goldman Sachs showed that, while S&P 500 companies earned 30% of income outside the United States, China accounted for only 1% of their income.

In the context of trade tensions between the two superpowers still struggling, many foreign business leaders are hoping China and the United States will soon reach a trade agreement. There is even an as‌sumption that the trade war will create a "golden bridge" for American companies to reach more than 1 billion Chinese consumers.

However, according to The Business Times , a reasonable trade agreement cannot become a "universal key" because entering the Chinese market will be very difficult due to the business ecosystem - which has always been dominated by super corporations and State-owned companies, is quite complicated. This ecosystem consists of a network of suppliers, banks, distributors, retailers and trading companies.

In addition, the Chinese government also controls the business environment through the banking system. Many state-owned companies and groups are "held" by the Government when they receive loans with preferential interest rates, creating an advantage when competing with foreign companies.

Therefore, China’s business ecosystem has always been regarded as the main obstacle to Western companies’ efforts to access the billion-dollar market.

The outlook is bleak

Newspaper The Business Times said , the economy second largest world are faced with the "headwinds" serious and long term. The figures show that the Chinese economy is likely to slow down in the coming years and may even face a growth crisis.

China’s working-age population is shrinking. By 2050, China’s workforce will be about 20% less than it is today. This means that China will lose 200 million workers - about 60% of the entire US population.

The country’s fertility rate began to decline, even days from the decade before the one-child policy was implemented in 1979. In 2018, China’s infant population dropped 12%, from 17.23. million children / year ago to 15.23 million children / year.

In addition to the bleak economic outlook, the key factors that help boost China’s productivity improvement are also losing momentum. First, the Chinese economy is no longer based on a low base, so adding productivity to the current GDP is extremely difficult. Second, the country no longer has a plentiful labor supply from the countryside.

Third, Beijing is becoming increasingly difficult to absorb technology from outside as many multinational companies are considering transferring technology in exchange for access to markets. Finally, is China able to support growth through huge domestic investments as the debt crisis worsens. Government debt alone accounts for about 300% of the country’s GDP, more than double the US government’s debt.

Chinese state-owned companies also owe about 15% more debt than all US nonfinancial companies combined. This leaves the world’s second economy with almost no space to continue borrowing on a large scale to stimulate the economy.

World economic experts say that China’s strong rise is very vulnerable to the slowing growth of the economy. Foreign companies that are optimistic about the miraculous growth of China’s economy need to be alert to the tough challenges facing the country, such as declining labor force, slowing productivity, rising debt and crisis of growth.