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How Chinese Capital Affects US Corporate Growth

Introduction

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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.

Available Capital

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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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Available Capital

Affect on US Companies

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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

Will These Changes Continue?

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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

How Can You Capitalize?

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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

What are the drawbacks?

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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

10 Paragon Drive, Suite 1

Montvale, New Jersey

07645-1760

U.S.A.

(800) 638-4427

+1 (201) 573-9000

www.imanet.org

10 Paragon Drive, Suite 1

Montvale, New Jersey

07645-1760

U.S.A.

(800) 638-4427

+1 (201) 573-9000

www.imanet.org