Opportunities for market expansion have emerged for businesses with operations in China due to certain changes in the PRC’s political, economic and social policies as well as certain fundamental changes affecting the PRC and its neighboring countries.
It is believed that China represents both a favorable environment for making acquisitions and an attractive operating environment for a target business for several reasons, including:
prolonged economic expansion within China, including gross domestic product growth of approximately 9% on average over the last 25 years, including 9.5% in 2004, 9.9% in 2005 and 10.7% in the first three quarters of 2006 (National Bureau of Statistics of China);
increased government focus within China on privatizing assets, improving foreign trade and encouraging business and economic activity;
favorable labor rates and efficient, low-cost manufacturing capabilities;
the recent entry of China into the World Trade Organization, the sole global international organization dealing with the rules of trade between nations, which may lead to a reduction on tariffs for industrial products, a reduction in trade restrictions and an increase in trading with the United States; and
the fact that China’s public equity markets are not as well developed and active as the equity markets within the United States and are characterized by companies with relatively small market capitalizations and low trading volumes, thereby causing Chinese companies to attempt to be listed on the United States equity markets.
- Avoid 
- Value Gap 
- Short-Term Growth
- Long-Term Growth 
- Long-Term Value 
