The Break-in: Entering the Chinese market

0715_China_ftThe No. 877 bus ride from Beijing to Badaling, the Great Wall of China’s most popular tourist site, is about 50 miles long and normally takes an hour on the Badaling Expressway. As the bus pulled out of the station near Denshengmen Bus Station, in the northern part of Beijing last April, there was little traffic, despite the city’s reputation for car congestion. But once the 877 hit the expressway, it braked to a crawl. The traffic was dense. This was midmorning, well past an industrial city’s rush hour. Why all the traffic? Commercial trucks. Lots of commercial trucks, all heading north. For the Westerners on the bus, this was a surprise – not for the Chinese. They settled in for a long snooze. See, the expressway is usually jammed with commercial traffic, because that’s how it is in an economy that continues to boom.

To most logistics professionals, China is the Holy Grail of freight forwarding – both a shining beacon representing untold riches, yet somehow mythical and elusive. Its immense growth continues to draw in supply chain professional from across the globe, pulling the economic center of gravity eastward. By 2030, it is estimated that the Asian region will be home to 55 percent of the world’s middle class; by 2050, the region is expected to account for 50 percent of global GDP growth. Because of this wealth, e-commerce at online retailers such as Alibaba and is booming, creating tremendous demand for short- to medium-range freighter aircraft.

China has changed dramatically over the last 20 years, from a closed, totalitarian regime to a thriving economic engine – albeit one that has cooled off in recent months. However, some myths about the Chinese market continue to persist – that it is an impenetrable, mysterious fortress – while others have sprung up in recent years – that it is a no-holds-barred, capitalistic free-for-all.

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