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Introduction
FDI Strategies was
established in 2013 by
Eric Moraczewski to
assist middle-market US
corporations in taking
advantage of available
capital in China.
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Available Capital - Acquisitions
Capital has been moving out of China for a variety of reasons over the past several years, but in record numbers, in 2014 $102.9 Billion left in Outbound Direct Investment (ODI)
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Available Capital - Buyers
There has never been a better time to sell products in China. While average wages are still lower than established countries, the Movers & Shakers account for 10% of spending.
*Image from ChinaLuxCultureBiz
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Affect on US Companies
Rise of the Chinese
Consumer
Purchase of Foreign Goods
Purchase of Foreign
Companies
New Demands on Quality
and Diversity
Travel
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Will These Changes Continue?
Change cannot last forever, where do you fit in the growth of an economy
The Chinese economy saw 15% annual growth rates over the past
10-15 years, an obviously
unsustainable rate.
This allowed Chinese
businesses to stay within their
own borders.
While MNC’s have been
doing business in China for
years, small and middle market companies are just now getting the opportunity to sell to China.
Middle market companies are
just beginning to look to grow outside the
Chinese borders
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How Can You Capitalize?
Sell products to China
• Demand is rising quicker in certain sectors than others
• Approaching the market in the correct way
• Brand is still important
Sell business to China
• Many Chinese firms have cash on hand and currently are paying 12-20 times earnings for Chinese businesses
• Demand for foreign goods and IP continue to grow
Form a Joint Venture or License
your technology
• In many cases this is the best immediate opportunity to take advantage of the Chinese market with lower initial risk
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Drawbacks
Time
• Simply put, it takes longer to get a deal done with the Chinese
Currency Challenges
• Moving money in and out of China
• “PEG’d” currency rates
Poor International Relations
• US and China struggle to strike a long term deal