Q: Just how "hot" is the China market and should I get involved now?

A: Getting involved in any foreign market can never be perfectly timed. How you decided to enter these markets should be based on your overall business strategy, not something to chase after because of media reports and hearsay. This is especially true when these markets are described as "hot" markets, like China is today. If there is a phrase to describe if you should be involved in this hottest of markets in the world today, it is "Be Careful".

There are reports that claim that at one time at the beginning of this year (2005) that 40% of all the world's construction cranes were in the Greater Shanghai Region alone. Couple this with the staggering economic growth rate of the Chinese economy (projected to be around the 9.5% range annual rate), and the hype created by the media and you have the ingredients for a boom market. Foreign speculators, investors, entrepreneurs and adventurer's have all descended in China and have brought with them the design and construction professionals to create this intense environment of building a country that has an insatiable appetite for growth. Growth and new are highly regarded features of any new project in China and this helps fuel an overheated market. The Chinese Central government has tried to cool down this growth by limiting or taking away funding for large capital projects, but the private sector has caught the Capitalistic Bug and is continuing on its torrid pace.

There are signs that the China market is starting its gradual slow down which can be recently seen in the revised estimates of its GDP growth rate. The rate is expected to slow to 8.8 pct for 2005 compared with 9.5 pct for 2004, according to the report by the Macroeconomic Research Institute under the National Development and Reform Commission. The recent discussions of China un-pegging their currency from the US Dollar will also have an effect on the overall buoyancy of the Chinese market. These macro-economic measurements should be watched carefully as your decision to enter a market like China will be directly affected by the economic events outside of your direct control.

There is no right time for anyone to enter any market. Timing a market is an illusion can be very damaging to your organization. Best practice tells us that if you plan your entry into a market like China, do this as part of an overall strategic plan for your business. This will provide the proper Key Performance Indicators (KPI's) and tools, like a Balanced Scorecard, that will help you measure your efforts with the proper resources that are going to be required to be successful.

Thanks to Paul Doherty, AIA. He is the managing director of General Land Corp. a full-service, global real estate development firm with a focus on the Asia Pacific market. Paul is a thought leader, strategist and integrator of technology and business. He is an author, educator, analyst and consultant to Fortune 500 organizations, global government agencies and prominent institutions and is on the board of directors of the International Facility Management Association (IFMA). He can be contacted at pdoherty@general-land.com.

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