Why US companies keep choosing China?
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Today, we discuss investing in China. Welcome to The Bridge, enlightening conversations on world cultures, life, and everything in between. Hey, everyone. This is Jason Smith, host of The Bridge podcast from sunny California. If you like the show, don't forget to subscribe. We love The Bridge.

Hi, everyone. My name is Jason. I'm originally from sunny California, now living in beautiful Beijing. Today with me is Bei Bei. Hello, Jason. I mean, China is easing its rules for foreign direct investment. That means if you want to invest in China, especially in the manufacturing sector, it's easier now than ever before. I did the research myself, and U.S. and German investment in China is reaching record highs, as it is with French FDI. That's a foreign direct investment.

And I, you know, I wanted to actually know I really didn't understand this stuff. Like, so that's really one of the things that how do you invest in China? What does that mean? So, Bebe, do you think it's does it surprise you that U.S. companies are actually increasing their investment in China? No, not at all. I think that's a smart move. I mean, I mean, look at the world today, Jason. It's not like, you know, it's all peaceful.

And with our whoever has billions of dollars to spare, you know, where, you know, they'll look at the map and pick a place they think that is peaceful enough. Right. That is has a great future.

that has interesting things going on, new products coming in and new products going out, expanding into the world. I mean, it's China. That's where the future is. And also, you know, compared to a few other places, I was just thinking about this. So in China, you have peace and unity and prosperity and even greater future prosperity. And also another thing is that the government and the people are working together.

for a better future. You know how crucial that is to have the government and the people working together for a greater future? And not just for China itself, but for other countries that are willing to trade, willing to trade and work with China. And then you look elsewhere, you see conflicts and even hot wars and also political division, right? And the US, of course, has been talking about the return of manufacturing, but like how?

Right. There is where will the money come from? Will there be political consensus? And what about supply chain? And what about the cost of manufacturing and which will influence the prices of their products? And then you look at Europe. Right. It's it hardly even has political independence. I mean, see how torn Germany and France feel about investing in China. Right. Right.

They know that, of course, it's better to have, let's say, cheaper energy from Russia, to have cheaper and better, newer EV cars from China. But at the same time, they're imposing trade barriers to make it more difficult. So, I mean, if I had, let's say, a few billion dollars lying around, I would definitely come to China. I think this is the place to be, you know, for now and for the future. What about you?

about you jason if you had like 10 billion dollars that you don't know what to do with i'm thinking about people who have just hundreds of thousands how this is my question if someone who used to work in finance baby how again i've asked a lot of people lately a lot of experts so i've got a lot to say but i'm just i'm trying to get a feel for what people's ideas are how do you invest in china how does one go about say you have a hundred thousand dollars to invest in you're american you're

You know, you're putting some in gold. You're putting some in the U.S. stock market. You're putting some over there. How do you put some of it into China? How does that work? I really don't know about the details, but I'm sure there are consulting companies that can help you with it. And also China has been the government has been trying to make it easier for people to come and invest like in multiple ways. Have you heard of China's 24 measures? I don't know. Please. Foreign investment. So this well, this came out.

In, I think, July of last year, the State Council in China issued the opinions of the State Council on further optimizing the foreign investment environment and intensifying efforts to attract foreign investment. So basically, it's trying hard and harder to make it easier for people to come to China and invest. And this document is referred to as, you know, the 24 measures to...

to boost foreign direct investment. And this is subdivided into like 59 specific areas ranging from improving intellectual property rights to facilitating cross border data flows and also to, you know, extension, giving extension of tax breaks for foreign employees and domestic research and development equipment purchases. For example,

When it comes to tax breaks, it's beneficial for all foreign individuals working in China, as well as companies trying to retain their foreign talent. And a bit more detail, it includes tax exemption for items such as house rental, children's education costs, which can come to be quite high because I would imagine a lot of people, foreigners living in China, they probably send their kids to private schools.

which get really expensive. And also text exemption for language training costs. And it's thinking of ways to make it easier and to retain foreign talent.

And also another one underscores the Chinese government's sustained support for innovation in research and development sector by providing tax incentives. This policy has the potential to reduce the financial strain on R&D institutions. Mm-hmm.

So making it more attractive to foreign investors. And I think through this and other things, you can see a willingness on China's side to open up more and to welcome in foreign investment and foreign talent and technology.

So, I mean, the details, I think you have to go through, probably ask consulting companies for actually how to do it. Well, you know, I've been I've been really thinking about this intensely, like from a normal person's perspective, a non-expert perspective. One of the things I heard said this is from Jerry Gray is, you know, go invest in the U.S. stock market.

Because there are Chinese companies listed on the U.S. stock market. So it's actually easier for them to just go turn to the U.S. stock market and find Chinese companies that are listed there and to invest in them there. So that's one way that it can be done. And sometimes these are done through complicated mechanisms. But, you know, they're also checked by international institutions like Delwatt, who have a

a foothold in in china and actually go and check the books of these companies that you're investing in so all things are above board another way and this comes from a cgtn article from november this year china lifts all restrictions on foreign investment access in manufacturing sector

And I know this doesn't seem like easy for your average just American who has a job to use, but you can actually set up a factory. So, for example, right now, if you want to export things to your Amazon store or to Amazon

a store that you have or to a website where you're selling stuff right now you can comp you can get in contact with chinese companies and just order what you want and then ship them to the united states and pay all the tariffs and stuff which is you know depends on what it's very varies depends on your your product but a lot of companies do this or you can actually go to china and set up a factory and then you know that may seem like a huge step but because there's

investment access for foreigners now they can actually set up their own factory without having to use like a chinese interlocutor who owns 51 of the company i see and you can set it you can set up your own factory in china and then you can export from your own factory to united states germany wherever it doesn't have to be something big like cars it could be small things

all kinds of different things, radios or whatever it is that you think that you can sell in your home country. Are you familiar with the term greenfield investment? No. That sounds like what it is. So a greenfield investment is basically a parent company creates a new operation in a foreign country from the ground up. Like just as you said, you go there and build the whole facility, the company and the headquarters, distributing centers, offices, housing for employees, everything.

All from zero, rather than, you know, working with an existing company in that country. And so it gives the sponsoring company the greatest control over operations. But of course, it comes with greater risks and also larger commitment of time and capital involved.

But it can benefit and also it can benefit the local economy by creating new jobs, bringing innovation that improve labor skill. And in contrast to that is a term called brownfield investment. So basically, that's like when a company or a government entity leases or purchases existing production facilities to launch a new production activity. That's called like brownfield investment.

So it depends, right? What you mentioned sound like a greenfield investment. I

I'm thinking. Yes, but I wouldn't say I would I would say not buying apartment apartments and living conditions for your employees. Do it on it could be done on a much smaller scale. You could literally lease out like a really small space and hire like two employees in China who are or three employees in China who are making things and you don't even need offices or anything like that. I mean, it doesn't have to be a billion dollars. It could be done for hundreds of thousands or a couple of million dollars between a couple of U.S. investors or

wherever you're coming from. And then you could set up your facility in China. The advantage to this is this. Let's say you let's say you're in Germany and you decide that your phone holders that you put on your desk that are cute and look like Pokemon or something you want to make, make you want to order those from a Chinese factory. So you tell the Chinese factory what you want and how to make it. And then you order, you know, 100000 of those. That Chinese company doesn't

isn't yours they can just make them again only slightly differently and then ship them to your same market and become your competitor because they know what you're doing they know where you're shipping them so if you set up your own factory then you have your first to market and you are going to have less competition yeah sounds like a good strategy although it will take a lot more uh initial commitment yeah this is not for like someone who just got out of college yeah and

I think even if you start like a small business, you do have to fight against or, you know, the language barrier and the cultural barrier. So you probably do need some initial help, even though with, you know, the government support and all that. Yeah. You still need to be ready with localizing your business here in China. And you mentioned this article from CGTN titled China Lifts Up.

China lifts all restrictions on foreign investment access in manufacturing sector. It mentioned two areas that are newly opened for foreign investors. One is printing publications. That's interesting. And another is applying

traditional Chinese medicine processing technologies, processing techniques, and producing proprietary confidential prescriptions for Chinese medicine. So it sounds like something having to do with traditional Chinese medicine. And it's seen, of course, as a unique treasure of the Chinese civilization.

But in the article, it poses the question, is the industry ready for an influx of foreign investment? Can you imagine that? Foreign investment for Chinese medicine. And in this article, it presented pictures of foreign businessmen dealing with local Chinese companies. And the

And these two companies are so, like, their products are so familiar to, like, every Chinese person. For example, there's the Ma Yinglong Pharmaceutical Group. Like, we've known their products since, like, for generations. They have this, like, really famous cream for... What's the word? For hemorrhoid? Uh-oh. Like, this, like, super...

popular and well-known product. And the funny thing, the reason I know about it is it has a reputation of being a really effective eye cream. I was going to say that because in the West, we use those kinds of creams also. Models use them right before they go on catwalks and things under their eyes to remove the puffiness. Interesting, because I thought it

I thought it was so like, you just can't put the two things together, but somehow maybe it stimulates local circulation or something like that. So that's one of the companies like maybe working with foreign investors. And another one is called Golden Throat.

Have you heard of this product? It's in like every, like these products I'm talking about, they're in every single pharmacy in China. So they have like hundreds of years of history. For example, this Golden Throat company. So it's interesting to think that, you know, these companies will have foreign investment and maybe they will be able to sell to more foreign countries in the future. Yeah, I know a very famous business person. He opened Me and She online.

which is a company which exports Chinese medicine for, you can find him. His name is Arnaud Bertrand. You can order his products online. He's, he sells Chinese medicine related to unblocking, uh,

It makes it easier for women to lactate when they're feeding their children, their newborn babies. Because it's a Chinese medicine that opens that up and makes it easier for the milk to get through the human tissue. Interesting. Okay. Well, what I know about that is you like Chinese people. Usually they make fish soup for new moms. It's a, it has a reputation of generating milk quickly, but,

Anyhow, it's such a huge field that I think it has great potential because although we do have like Chinese medicine shops in other countries, like in Chinatown in the U.S., but still it's very localized, right? Usually you just find them in Chinatown or maybe there is like an old Chinese doctor with like five decades of experience that you know from friends. On that point, can I tell you a story? Sure, please.

Summer and I were recently, my wife and I, we were in Xinjiang and we were exploring the areas of the desert which are being afforested where they're planting the swastika trees. We've talked about that. But what I didn't say was that they also showed us that the local people had actually gone out to the desert to where the swastika trees are growing and dug underneath them and planted a root there.

And I don't know the name of this root, but we in summer, my wife ended up buying a hundred RMB worth of it. And it was a whole kilogram of this. We brought it home and she said, it's like a thousand times more than most people ever buy. And she's going to make, make me drink it every time I have tea. So my tea's become a little more bitter because,

But it's a Chinese medicine that helps like lower blood pressure and things like that. So she's basically got this, which is now being grown in the desert underneath the swastika trees that have been planted where there was nothing growing for centuries. Wow. And so it's a really just amazing. Actually, it's become an agricultural source of revenue for local.

the local public to, to grow this traditional Chinese medicine. And it would be really easy for someone to go there and just like link up with that company and start exporting it to the U S to help make tea and medicine for Americans. Yeah. And you've become the, the, the, what do you call it? The white guinea pig guinea pig. Yeah. Or, or white mice or something. Yeah.

Yeah. Well, the thing with Chinese medicine is that it takes longer for the effects to show up. Like, it's a cumulative process. But if you have patients and you have the right prescription, it really works. Yeah, it's pretty amazing. So I have another article here. And, you know, before I get to this article, I just think it's really interesting that most Americans, I think they...

The vast majority of Americans, in my opinion, don't know anything about China. So I just want to point out that we have KFC. We have Taco Bell. We have Pepsi, Coca-Cola. You go to the grocery store. I buy a Gillette blade. I think that's Johnson and Johnson, right? You can go through this Lay's potato chips and Hershey's chocolate. So all these companies, these American companies, they're doing massive business on the consumer side also. It's not just Chinese companies exporting goods to America. It's America.

American companies exporting goods to China as well. Hey, speaking of Lay's potato chips, you know how many different kinds of flavors there are in China? Like, I can't even count it. I once saw in this video, like a college student, he made a booklet, like a giant folder collecting the wrap, like the packaging of all kinds of Lay's potato chips, like in different flavors.

It was like a thick stack and it has like xiao long xia flavor, which the Chinese kind of lobster, you know, the small red lobster. Yeah. Yeah. And my favorite flavor,

I like like original flavor, but also there's new kind I found, which is wasabi flavor. It's not, I would never have taken you as a potato chip person. You're so healthy. No, I love you. I imagine you just sitting around drinking green tea and eating vegetables. Well,

Well, I do that too. I love vegetables, but like for years, I really liked potato chips. But after I became a mom, it became harder because whenever you eat junk food, of course, you know, you have to hide it from the kids. But they always, they'll always find it no matter where you put them, where you hide them in the house. You need a safe. You need a safe for your potato chips. Exactly.

Exactly. But the thing is, like, I probably won't be able to remember the password. I have to ask my daughter to remember the password. So I'm just... Then you open it. It'll be nothing in there. So next time you try it, try it. Lays potato chips, wasabi. I don't eat chips. I'm sorry. I won't do that. Well, that's fine. That's fine. You're listening to The Bridge.

I was looking at the data in terms of – because right now we may see the rise of tariffs in the near future again.

And I think it's really strange because I was going over the numbers with some economists that I know, and it's 2.7% of China's GDP is exports to the United States. So if they were to increase tariffs, it wouldn't be the end of the world for China. China would just be like mildly inconvenienced by it at best. Mildly inconvenienced. Yeah.

Well, there are other markets, too. Yeah, that's right. And China has been developing those markets for over a decade and more. China exports more to the developing world than it does to the United States plus the European Union. So, like, I mean, the reality is there's – and the European Union is still very dependent on China. I was just looking at it today. It's like 53% of Chinese solar is going to Europe.

So Europe's not going to follow the United States on a massive tariff thing with China, in my opinion. So if the United States... My feeling is if the United States raises tariffs on China, then the United States, we're going to see inflation in the U.S. But in China, people probably will barely notice. Well, I don't think the people will notice much. But I think consumers in the U.S. will definitely notice. Because for decades, U.S. consumers have been so...

dependent on cheap and affordable products from China. And all of a sudden, the whole scene is changing. So I feel bad for U.S. consumers and also for people who want to buy nice and new cars, EV cars in Europe. Why do they have to pay so much more because of their government's policy? Hmm.

Yeah. But hopefully let's see what will happen in the future. So this is an article from RHG.com. Don't stop believing the inexorable rise. Don't stop believing. I know. Firstly, it's don't stop believing with an apostrophe. And then it uses the word inexorable. So do they have a lot of

wide vocabulary or not. I'm confused. It was the inexorable rise of German FDI in China. And it goes on to argue that Germany is increasing, doubling down on its investments in China. And, you know, we see the increase of FDI from the United States. You see an increase in FDI from France. You see an increase from FDI from Germany. All these mega economies are investing very heavily in China. And you will and you may I'm just going to give you a

Pop quiz. Sure. What is China, the number one source of FDI into China from abroad? Any idea? It's Singapore. And it's by a huge margin. Singaporean company. Number one? Singapore, by a massive margin, is the number one investor in China. Really? Well, I knew about...

Germany and Singapore, but I didn't know that it was number one. Oh, it's really, really high. Wow. I do have the numbers here that between January and June of 2024, investment from Germany and Singapore in China increased by 18.1% and 10.5% respectively, which high

highlights a rising interest from these two nations, even as overall FDI experience a broader decline. So in the first half of this year, Germany's direct investment in China surged to 7.3 billion euros. So that's over 8 billion U.S. dollars.

surpassing the total investment over the entire year of 2023. And this dramatic increase, particularly evident in the second quarter, when investment rose to 5.36 billion U.S. dollars,

underscores the robust confidence among German enterprises in the Chinese market. When it comes to Singapore, the rising investment from Singapore is particularly notable in light of recent developments such as the 2024 China-Singapore Economic Cooperation Forum,

which was held in Singapore, I think in February this year. And it has the aim to boister business collaboration between the two countries. So both sides are willing to deepen their economic relationship. And also China, it's still Singapore's largest trading partner. And Singapore continues to be a major source of new investment for China. I just didn't know that it was number one. That sounds pretty...

Unbelievable. You know, I was looking at the numbers a lot over the last few weeks. This is from China Briefing dot com. And it has the number and it's really, you know, there's this idea because there's some data that was put out which showed liabilities showed the amount of FDI going out of China.

from Chinese companies and Chinese investors and the amount of FDI going into China from abroad. And it shows that FDI, based on this calculation, is decreasing. But actually, it's not. What's happening is rich Chinese companies are investing abroad. But overall, FDI has increased

increased the whole time so this is from china china's top fdi sources 2014-2023 from the national bureau of statistics i'm just going to go over a few of these numbers so uh it lists singapore

in 100 million units so this is 5.8 billion uh dollars in 2014 but it is closer to nine point oh sorry trillion did i say a million a trillion a 9.8 trillion singapore 2023 japan

Also, it's basically stayed the same over the same 10-year period. Korea stayed the same over the period. United States increased from $2.37 trillion to $3.4 trillion. FDI coming into China. United Kingdom went up in 2014, $7.4 to $3.4 trillion. So all these countries...

are increasing constantly over the last 10 years, either maintaining the same or increasing consistently the amount of money that they're investing into China, manufacturing, consumer-based, all kinds of FDI that's going to all kinds of different places. So what gets me is you have these weird politicians who are like, oh, we're going to decouple or whatever. You know what's going on? The companies –

The investors who care about profit, they're not decoupling. They're going all in. So like while the U.S. politicians may have one like vision of how things should be going, the people who care about the investment, their company, their success of their investments, they're going more. They're saying we want more China. We want to be in China. We don't care what like two or three lunatic politicians are saying. We care about the future of our company and the future of their company is in China. I think.

think um in this one paragraph from the article from rhg.com can show the i guess the dilemma or the controversy when it comes to this um so in this article it says even it says the trajectory of germany's economic ties to china represents a major challenge for european policymakers

So the dependence of German industry on the Chinese market, which for some big firms is only deepening, will continue to influence German policy toward China at a time when European Commission is pressing ahead with an ever broader de-risking agenda. And although

Although the Commission succeeded in imposing duties on, let's say, electric vehicle imports from China, over the objections of the German government, it is difficult in the longer term to envision a EU-China policy that is at odds with the perceived interests of

of its largest economy and member state. So you see this tension, you know, between what the policymakers are trying to do, but what the businesses do want. I mean, the benefits of investing in China is really pretty obvious, right? Where else can you get, let's say, such benefits

cheap and afford and cheap and new and absolutely amazing electric vehicles, right? Especially at a time when energy prices have been going up for European countries. So I think this paragraph is a good summary of the dilemma that, you know, some European countries and economies face. You're listening to The Bridge.

Well, I want to talk about a couple of advantages of manufacturing in China that I didn't know about a few weeks ago. So I was talking with Ben Norton and he pointed out something I already knew, but he reframed it for me so that I actually understood it. Sometimes you have knowledge and you don't actually know where it goes in your calculations.

So he was pointing out that all of these state-owned enterprises in China, they control what is theoretically called the commanding heights of the economy. This is the socialist part of the economy. And that is things like telecommunications are largely controlled by the state-owned enterprises. Water is controlled by state-owned enterprises. Energy is controlled by state-owned enterprises.

And so you have all of these utilities that we used to we used to let the nation control in the United States also. And those utilities essentially ensure that telecommunications are one twentieth the cost for data as they are in the United States. Wow.

Your water bill in China is going to be ridiculously cheaper than it is in the United States. Your electricity bill is going to... But this is not the only thing. It's not just for people in their homes to be able to live their lives. But think about... If you're a factory, right. If you're a factory, you need water. You need electricity. You need telecommunications. These are all critical parts of your infrastructure. If the price is rock bottom, then the cost of manufacturing in China is rock bottom. And your margins are higher. Your

Profit's going to be higher. It's not the cost of labor. The cost of labor in China has increased dramatically. And the cost of hiring a Chinese person is considerably higher than hiring someone in Bangladesh. But the cost of everything else is just so cheap. Plus, if you say you're making shirts with buttons, you go to a

one area, right? And it's going to, there's the whole entire hub for making shirts and pants and everything. They're all 20 kilometers away from one another. So you need a shirt, you need this button, you need this thread. It's all there in the same area. Logistics are cheap. You want to get it to the port.

Great. Almost all the ports are becoming AI operated and they're really efficient and exporting from China is cheaper and more logistically feasible than ever. You make something, you get it to the port the same day you export it. You know, the cost of doing business is cheap. The logistics is efficient. Say you want us to make that same shirt.

okay, now you got, and you want to make it outside of China. Okay. You got the fabric in Vietnam and you got the factory that puts it all together in Bangladesh and you got the buttons in India. Getting it all together is a nightmare logistically for your company. Right. If you just do it all in China, it can all happen all at the same time and be exported to the market where you're going to sell it somewhere else the same day. Hey, Katie,

imagine, let's say someone, you know, come investing in China and you can just hop on a motorbike, let's say of a factory's owner and he'll be like, here, come with me. Let me show you my whole supply chain. And you can reach like the entire supply chain in like, I don't know, like two hours from the beginning to the end. And it's actually not impossible, right? Depending on the field you are. Speaking of which, can I just mention

Some of the reasons why, you know, people should come and invest in China. Please do. I found this article. It's from FDI China dot com. It came out in July of last year. So the name of the article is top five reasons to invest in China for maximum growth.

Number one is the power of China's rapid economic growth. I know that people have been talking about, you know, decline of economic growth in China, but no country, you know, can sustain a GDP growth of 8 or 10%.

year after year for decades. You know, that is just not possible. And China is aiming for 5%, which is really high. I mean, look at the numbers for other countries, like one, two, well, maybe two. I haven't heard a lot of other countries sustaining over 3% GDP growth. So you need to consider the whole environment. So number one, China's rapid economic growth, especially

I think China is, you know, moving toward a new stage of economic development. It's no longer just about buttons and shirts, right? We're talking about, you know, electronic products and the most advanced ones. We're talking about AI and we're talking about like space travel, things like that. So China's remarkable economic growth has positioned it as a global powerhouse.

and attracting more business professionals seeking investment opportunities. And also, the second reason is the robust domestic market. I mean, there are 1.4 billion people, right? We got to eat, we got to dress, we got to drive cars. Even if we

if we don't have like crazy desires, you know, for the most fancy lifestyle, everyone needs the basics. And that market is huge enough. I think LVMH is more popular in China than America. Yeah. And also because of China's strategic focus on infrastructure building,

and technological advancements and government reforms. I mean, look at the whole scene now, right? You can go anywhere you want connected by high-speed rail and also nicely paved roads literally into all the villages. So basically, the vast consumer market, right? If you, let's say, come and...

start a factory, you can sell like you open your door and there is an enormous consumer market. You know, it's just easier. Right. And also China's rising middle class and their increasing willingness to to spend to buy premium goods and services for education, for for traveling, you name it.

So middle class is on the rise and fueled by organization and economic development. They have tremendous appetite for innovative products, for luxury brands and for just, you know, for good experiences.

So that's another thing. There's also just evergreen products, right? That every family needs a baby bottle, right? Every family that has a baby needs a baby bottle. A? You mean five? At least. My point is there's some things, no matter what, people will all,

Always buy, no matter how the economy is doing. So in China, you have like a billion people, like you mentioned, in the middle class or whatever. However, we want to calculate that. But every single couple needs certain things, like basic things. Everybody

family needs cups and glasses, all these evergreen products and tables. And so if you're making these kinds of products in China, oh my gosh, it's like, yeah, it's a dreamland to sell that kind of stuff because P everyone needs that stuff. I don't think you can find a better market, you know, with more, uh,

consumers with enough money to spend on these fancy things, fancy or not. Another reason that people should come and invest in China is because of the government support and reforms. We mentioned that already. You can see the obvious intention of opening up further to make it easier for people to come and start, you know, for foreigners to come and start their own business.

And also there's the Belt and Road Initiative, right? Jason is an expert, which enhances connectivity and cooperation between China and other countries, especially along the ancient Silk Road.

So if you're worried about, oh, what if I start a successful factory and have this wonderful product, but have no markets to sell? Well, besides the market here in China, you have the rest of the world. Even if the U.S. or some other Western countries are not willing to buy or have really high tariffs,

There's still so many other countries that are connected to China. So many other regions, you know, in Central Europe, across Asia, Africa, you name it. And the roads have already been built, right? The ships going, trains going, everything, the ground has been laid, tracks has been laid down, everything's ready. So the Belt and Road Initiative, it presents so many opportunities for businesses and investors to participate

participate in, let's say, just in infrastructure projects. Can you imagine, right? Including transportation, energy, telecommunications, logistics. China has been investing so much in the construction of roads and not just in China, but also in other countries, right? Railways, ports, pipelines. If you're in this business, think of the potential. It's still, you know, available.

So I can't even think of anything else in other parts of the world that's comparable. I think your demographic for who we're talking to is different because you're thinking of all these people with in companies with billions of dollars trying to invest in like rail companies. And I'm thinking of like, you know, people like me or you who could put to pull together a hundred thousand or a few hundred thousand. How could we get into China?

Because like I'm certainly don't have a billion dollars to invest in like a railroad company or in Africa. Like, you know, certainly that has got to be done by people with I don't even know what thousands of times more money than I have. But so I'm thinking like, you know, you mentioned Africa.

If you open a small factory, let's just say, let's go back to the example of a phone holder, because a lot of people have a phone on their desk. They want it upright so they can see it while they're typing on their computer or whatever. This little phone holder that it looks like a dragon or something, right? So maybe you're an American and your initial...

idea is I'll export them to the United States. But, you know, what Bebe just said is true. You know, people are going to along the Silk Road, which is all over the world now, 154 countries ish. It goes up and down one or two per year. But those countries all have ports that are linked to Chinese infrastructure that are already ready to go. And, you know, they need cell phone holders, too. They all have smartphones. The

Yeah.

all of the BRI countries and, you know, Nigeria and South Africa and Iraq and all these countries that they might want to buy your little dragon shaped phone holder too, whatever it is. I think, you know, a lot of people, I watch a lot on Instagram of these big professional companies, the CEO of Nvidia or like,

Steve Jobs, they always say the same thing. If you want to be an entrepreneur, you need to throw yourself out there. And I think for those people that are like me, that just have enough money to invest in something like this, it would be a massive investment.

Risk, yes. But if you come to China and you set up a shop where you can have stuff made, you know, efficiently, a shirt or a glass or a set of coffee mugs, whatever it is, and start exporting it, I think it could be really worthwhile investing in China right now. Because China's going to be growing at high speed for the considerable future. You're listening to The Bridge.

Okay, so you know, there are other ways, obviously, you can invest in China, you can invest in a Chinese company in China by coming to China and investing in their company face to face with those people, you can invest in Chinese banks, Chinese banks have CDs, and you can buy CDs, and those CDs will mature and they will do investments for you. And you can get your normal kind of investment back, you can also invest in the Chinese stock market, you can also

so there's a lot of different ways you could set up shops, you could set up storefronts, you could set up restaurants, you could set, you could set up factories. You can invest in the U S stock market, which has Chinese companies listed. I mean, I'm just trying to think of all the ways for people who are interested in investing in China, that they can get into that market. You're like looking at your own bank account and in your own pocket to see how much money, like what kind of investment can I do? Well, it's, well, if that's the case, then I do,

I am investing in Chinese banks because I put in like 50,000 RMB in a CD bank account. There you go. Yeah. That's the baby. Baby is already betting big on China. I just want to mention that we are a share in China's construction bank or something. I just want to say for for legal reasons in the United States, we are an entertainment show and none of the advice we give you for your investments is

You know, you have to go to a real investment company for official legal advice on how to invest in China. We are here for your entertainment. Jason, that's very kind of you to make that clear. But I was thinking, you know, if you want to start, let's say, making some cell phone holders...

of some very unique design that you're very confident of. Maybe you can check out like, you know, Yiwu City, right? In China. Oh, yeah. I think everyone should go there. Not even people, investors, just for the sake of going. Yeah, it's just so well known as the heaven of these all kinds of gadgets and products. I mean, they said that, let's say election time, even before people in the US have an idea of who is, you know, leading or who has an edge. Yeah.

by just looking at the products orders from Yiwu you can get a sense of who is winning because by the number of caps and t-shirts that you know different parties have ordered it's just so interesting even that it's a small city but it's like the center of global

manufacturer of like small gadgets things like like t-shirts and cell phone holders and things like that so yeah if you come if you think about that maybe you can take a trip there and i'm sure people local people can point you in the right direction i would love to go there you know you know i i just want to tell people a little more about it like what baby said is exactly exactly right and every year western media like cnn and msnbc they do stuff about uh

Because Christmas is how big Christmas is going to be in the United States is determined in EWU. So you can go there and see how many Santa's costumes and how many hats and how many gift bags and Christmas trees and stuff they're exporting from there are going to determine how decorative America is going to be that year. It's a pretty ridiculous.

reliable meter of how economic activities are going in the U.S. and some other countries. Yeah. And I just want to... Sorry. I just want to give people an idea of what it feels like to be there. So you can literally go from shop to shop. So you'll walk into a shop and maybe this is the button shop. And all they will have on display are a few of 10,000 different kinds of buttons. Goodness.

So if you come from a company like, for example, The Gap or some other company like that, they will send people there to determine, OK, we're going to design a shirt. Which kind of buttons do we want? And they will, OK, this one we would like to order, you know, 100,000 of those. And then they will place an order in EWU for that button.

You go to the next shop. It's got wheels. It's just every kind of wheel you can imagine for every kind of little robot and skateboard that you might build. OK, we need that wheel. We're going to order, you know, so you just go from shop to shop to shop. And they're just like whatever coffee cup shop or like the little dragon shop or it's just a.

It's like a mall experience, except instead of seeing many different kinds of products, you see all one kind of product of various types from one shop to the next. You see expertise. And you see rock-bottom prices that you probably can't get anywhere else. Yeah, that's pretty much it. This is where the world stuff comes from. Yeah.

And well, that actually leads me to another reason why people should come and invest in China because of the great access to global supply chain through, you know, you can get through investing in China. It's robust manufacturing infrastructure and skilled workforce and cost effective production capabilities. It's hard to find anywhere else. Didn't

Didn't Apple just move back like part of its operations back to China? Two years ago, they decided they wanted to be in India and they tried to start setting up in India as an alternate supply chain. They never intended on leaving China, but it didn't go well. And so they're just going to remain in China and they're probably slowly closing their operations in India. Yeah. I mean, there are reasons why they're doing that. Right. And so all these reasons combined together, a strong economy, a

Oh, yeah, absolutely.

We mentioned earlier, you don't necessarily have to have a Chinese hand in your company. You can set it up yourself as a foreigner depending on what you're doing. But you probably don't want to do that in reality, even though you can. You probably do want to go 50-50 with a local Chinese person because they're going to be able to help you navigate the government and taxes and personal relations. And it's more money, obviously, because they're going to put some of that down as well, potentially. And so having...

you know, a foreign and Chinese joint venture on a company that you're setting up in China is probably the best way to go. All right. So I have another article and this is positive outlook for foreign investment in China. And there are some graphics here. This says there is a, according to a research report on China's foreign investment business environment in 2024 Q3 by China council for the foundation of international trade. There is a 90% reduction

positive outlook for foreign-funded enterprises that are surveyed that are satisfied with the Chinese business environment. So 90% of people doing business in China, happy to be doing business in China. That's what they report. I think that is important. You know, they're also in major cities...

A different kind of investment that we maybe didn't really cover. I know you don't go out as much as a lot of other people, but if you go to Sanlitun or Shuangjiar or Wangfujiar or all of these jars. Fancy places.

in Beijing. Yeah. There are like fancy burger restaurants, fancy taco shops, fancy, you know, Mexican food restaurants. And most of them are run by foreigners. So you have a lot of bars. There are a lot of bars that are opened by foreigners because they're like

For example, there's a restaurant called Morel's and it was started by a Belgian man, I believe, who was just tired of there not being good Belgian food. So what did he do? He's like he opened his own Belgian restaurant. And now if you if you're in Beijing and you really want Belgian food, you can show up at his restaurant and get it. And that's just one example of it.

You go to cities, there's all kinds of special restaurants opened by foreigners. There's Indian food. There's Pakistani food. There's all kinds of Japanese, Korean restaurants and stuff all over the major cities. It doesn't have to be a factory. If you want to invest in China, there are other ways to invest in China. Like we said, the cost of water is low. The cost of electricity is low. So if you wanted to open a restaurant at home in America, oh my gosh.

those things are expensive. But if you wanted to open a restaurant in China, the costs of doing business just drop considerably. Yeah. When you mentioned Belgium food, my mind was like blank. Yeah.

I literally, besides fries, I have no idea what other things they do eat. But maybe someday I should check out this restaurant. But it's true that I have to go to these fancier places for like Indian food or Pakistan food, things like that. But they're all available. I'm just in the middle of like nowhere, like on the periphery of Beijing. I'm a little bit further away. Like I can't get an Indian takeout. But if I move a few...

I don't know, like 30 minutes into the city, then they will be much more available. You know what you can do? I can tell you how to hack the system. And you have to pay more. Yeah, if you're in your Alamah app, which is an app we use here in China to order food. Think of it as Grubhub, but they came sooner to market and they're better. So you go to Alamah.

And instead of just choosing from the options there, if you search for something very specific, like yindutsai, which means Indian food, it'll show you the place that's 25 kilometers away. It will still let you place an order. But instead of taking 30 minutes to get to your house, it's going to take two hours to get to your house. Well, maybe not that far.

because I think they're on like motorbikes and they're a little faster than driving. But it's available. Like if you really... You're just dying to have like a cake from a certain restaurant. You can order from like all over Beijing. And they have this Shansong. It's another delivery service that's the fastest you can get. It's more expensive. Like the only...

does inner city deliveries. But like, let's say you forgot your keys, right? And you have to like give keys to your wife somewhere else in the city. And this is a service you will call. They'll arrive at your home.

usually on a fancier like a motorbike like those professional motorbikes instead of those scooter bikes and usually it's like a cool younger person with you know helmets and everything and uh and they'll take that order and just drive it straight to the destination it's usually like it's it'll cost a little bit more i've used a couple times um for like an hour trip they'll probably charge not too crazy like eight dollars ten dollars equivalent in r&b

So all kinds of ways to get what you want here in China. So convenient here. I mean, that actually reminds me of something else. Say, again, I'm talking about setting up a restaurant or a small shop of some kind in China, in a Chinese city, in a Chinese town. Another great thing is you don't need...

a restaurant that seats 50 people to serve 50 meals. You could have a restaurant that seats 20 people and still be serving 50 meals because most people, in my opinion, I don't have the data, most people in my opinion are at home ordering food from restaurants. So you have a countertop with bags of food going out and you're serving the people sitting there at the same time. You know, you can dramatically increase the amount of customers that your restaurant is able to help. Yeah, I think

talking with you today opened up my mind as to what investment means. Because when you talk about investment, you know, you think about big things. It's abstract. Or you think about stock market. Like, it has, I feel like it has nothing to do with me because I'm not, like, I'm not in business. But then, oh,

like a bubble shop bubble tea shop is an investment right and setting up like a like these stand for weekend markets could be an investment also yeah

Yeah. So I guess people shouldn't be as afraid of it as I am. If you're interested in, you know, riding on the train of high economic growth here in China, there are limitless ways you can do this. I got a question for you because in America and this, this happened to me, this happened to my neighbor. This was a very common thing in America. Oftentimes to teach kids about how to become an entrepreneur, how to invest, how to get, start your own business.

American families will have their kids set up like a lemonade stand or something like that, where they sell something in the front of their house for a week or two, just so that the kids know about how much it costs to invest and how customers come by and how much to sell for and what profit is. Is that something you would ever consider doing with your daughter? We've done similar things, but the culture is different. So the way it was done was very different.

So we understand the value of, you know, training your kids to understand, you know, money and how to do business. But the thing is, you don't want to make money from your neighbors or from your family members. So if I let's say we set up a lemonade stand, right?

you know, in the neighborhood, then it will be, your customers will be neighbors, you know. And it's a little awkward for us to be making money, you know, from people you know really well, like your friends and family. So we did try something similar, but

It was for an event in the summer, like for in our neighborhood. So we did set up a really nice stand offering like pastry and other things that we bought from the pastry shop.

We made some, but we bought more like ice cream and things like that. And instead of selling them for money, like my husband gave out tickets, like fake tickets to the other kids coming to the event. And they can come and buy the products my daughter was quote unquote selling with these tickets. So they weren't paying anything. We pay for everything. Yeah.

And my daughter, she had no idea. She thought she was selling to make money. So she was really into it. She was working hard, you know, sweating and really happy that her business was doing really well. All the kids came over to get these pastries, to get ice cream. But then at the end of the day, when she found out that, you know, we weren't making any money at all. I would actually spend a couple hundred because it was a fun experience.

Activity, right? Well, you know, I think that is all the time we have. If you guys want to let us know everything we got right or wrong, please email us a message, a video message, an audio message, or a message that you want us to read online. You know, maybe we will read it on one of our next shows. You can email us at welovethebridge at gmail.com. Thank you so much for your time, listeners. Thank you for your time, baby. Thank you, Jason. And we'll see you guys next time. Bye-bye. Bye-bye.

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