Businesses need to be more selective and smart about investing in China, according to one expert. The Demand Institute recently published a report examining consumer consumption trends in China, and found an uneven picture. ‘We still see consumption growth growing at a pretty steady clip, over 5% per year over the next ten years,’ said Louise Keely, president of The Demand Institute. ‘But companies will need to make better regional investments than they have in the past.’ The report makes recommendations on which urban areas provide better growth opportunities. For example, The Demand Institute identifies six ‘super cities,’ including Beijing, Chongqing, Guangzhou, Shanghai, Shenzhen, and Tianjin. While those cities have high levels of wealth and well-diversified economies, competition is fierce for multi-national companies doing business due to the presence of foreign brands. The report also finds that since consumption is already high in those cities, further growth is limited. Keely said there are selective, smaller cities that can provide opportunities for businesses.
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