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Angel Investors Turn to China's Expanding Market
Perhaps it is not new news any more, but China is on track to become a major economical superpower. The growth in China is so fast, foreign investors are taking a look inside, descpite all the potential red tape.
Foreign companies and investors have jumped onboard in the last few years, even with the risks associated with the red tape that seems a bit more complex in China's market than elsewhere. Foreign investment in China rose almost 50 percent for the first half of 2008 in comparison to the same period in 2007 (up to $52.4 billion), which was beyond all expectations and projections.
Over 14,000 businesses in China were financed by foreign investors in the first half of 2008, and this includes an increasing number of start-ups and small businesses. Many angel investors and entrepreneurs alike have been looking at making that step into the Chinese market. Factors such as the sheer size of the consumer market in China and the fact that Chinese residents' disposable income is expected to rise make this a potentially lucrative investment opportunity.
The market in China is still in its early stages, and that is perhaps the most intimidating part. Unlike Hong Kong and Singapore, foreign investment has only been allowed in recent years. Only recently has China allowed foreign investors to form companies owned by foreign capital. These new changes have helped increase business flow within the country, and more tax friendly incentives for start-up businesses have been formed via Special Economic Zones and Development Zones, but there still is a long way to go.
With a strong economic surplus forming, China is not just becoming a place where foreign companies and investors look, but where a new wave of angel investors are emerging. By the end of 2007, more than 5,000 domestic Chinese enterprises had established direct investments in 172 countries and regions around the world. However, statistics show that Hong Kong is still the top foreign investing country in this part of the world. Critics do say that part of this is via Chinese companies looking for a tax break.
Foreign investment has been a factor in the markets of Hong Kong and Singapore for slightly longer. For instance, US companies are the top foreign investors in Singapore, followed by Japan, but Angel Investment is still relatively new in these locations.
Having angel investors in these markets is not a far fetched idea though. Several angel investor groups such as the Angel Investment Network have noticed this and have formed branches in China, Hong Kong and Singapore. The markets are still developing but show a lot of untapped potential and the Angel Investment Network's portals should help bridge the gap between entrepreneur and investor.
More information is available on the Investment Network websites of China at: http://www.investmentnetwork.cn
Hong Kong: http://www.investmentnetwork.hk
and Singapore: http://www.investmentnetwork.sg
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The Angel Investment Network currently includes a wide range International investors looking for investment opportunities, along with entrepreneurs in China, Hong Kong and Singapore looking to get their business off the ground.