Is it Still Worth Investing in China?

Pedro Nueno pits Asian giant's strengths against slowdown

07/10/2015 Barcelona

Pedro Nueno

“China needs to open up to the world to become its leading economy”, according to IESE professor Pedro Nueno / Photo: Jordi Estruch

All is not well in the Chinese economy. Not only did the country's stock market recently plummet by 8.5% in a single day, but the yuan has undergone a 3% devaluation (the largest in 2 decades), imports and exports have fallen in the last 12 months, and GDP growth has slowed for the first time in 17 years. So, would you invest in China?

You certainly should, according to IESE professor Pedro Nueno, founder and president of the China Europe International Business School (CEIBS). Signs that the world's second largest economy is decelerating have sparked fears of global repercussions, but Nueno firmly believes the time is right to invest in China, which he described as “a country of opportunities” at an event for IESE alumni.

Based on the extensive knowledge of China he has built up over three decades, Nueno stressed that the Asian giant is an excellent market for foreign investors. “China wants more firms, more businesspeople and more entrepreneurs”, he told his audience.

Nueno expects Chinese GDP growth to continue slowing over the next few years and bottom out at around 5%. He feels that the Chinese authorities have planned their measures perfectly to reduce the country's social divide, improve the quality of life of its 1.5 billion inhabitants and prevent potential unrest that might undermine the government. “The State still has large foreign exchange reserves and its priority now is international integration”, he said. “China needs to open up to the world to become its leading economy”, he added.

Nueno also offered some tips for firms looking to invest:

  • Look into an investment's advisability.
  • Remember that all good business models are global.
  • Ensure you have the right people in your team for the investment.
  • Ensure all the elements of your business are correctly integrated.
  • Secure buy-in.
  • Show plenty of humility and respect.