This latest recession which started more or less in the United States has slowly spread throughout the entire world causing a worldwide recession. In the past few months, there have been signs that this recession is finally slowing and a recovery is beginning to take place. However, there are economists who are still not as optimistic and warn of further difficulties before we finally recover.

For any business executive, this recession has forced their organizations to cut back on expenses, reduce the scope of the business, and some have turned to a reduction in the workforce to ease the pain. A reduction in expenses is the passive approach in trying to maintain status quo and keep the market share they have to survive a recession. Many of these organizations will go on to lose what market share they claimed as customers and clients are also cutting back. Enough loss in market share has lead to some companies to close their doors, even large companies like Circuit City and Mervyn's are not exempt.

During this time of crisis, the executive should not be thinking about reducing the scope of their business just to survive. "A leader must lead. Where others see obstacles, he must see opportunities. When others see problems, he must see possibilities ... Civilization is not built on a negation but on an affirmation- an affirmation of the bright and promising possibilities that the future holds for those who are enterprising enough to pursue them." (David J. Vaughan).

Expansion should be the thinking of the executive who is losing sleep at night about their future, losing money, and losing market share. One of the few countries with money to spend during this recession is China. For the organization serious about not just survival but for prosperity during and after this recession has passed should take a careful look at business expansion into the most populous Chinese-speaking market in the world. Below are four reasons why:

Stimulus Plan

A 4 trillion Yuan ($585 billion) stimulus package was passed by the Chinese government in November 2008. This stimulus money was to be spent primarily on developing infrastructure and to create programs to increase domestic spending. For the organization thinking about expansion into China, the focus on domestic spending by this stimulus plan will allow more consumers to afford the product or service you provide.

Savings Rate

Ingrained in the Chinese thinking is the concept of saving for a rainy day. In fact, the Chinese save from 30% to 50% of their annual income. The recession has not affected this savings rate for the Chinese and has remained steady even with domestic consumption steadily increasing. Unlike other countries with stimulus plans to encourage spending, the Chinese actually have the money to spend.

Domestic Consumption Increase

The National Bureau of Statistics in China reports in the first 5 months, purchases of clothing increased by over 20%, furniture sales increased by 33%, cosmetics purchases increased by 21.7%, automobile sales soared by 23.8%, and sales of gold, silver and jewelry skyrocketed by 28.7%. China is also poised to overtake the US in the number of vehicle purchases in 2009 with over 10 million.

GDP Growth

China recently released their 2nd quarter GDP numbers and reported a growth of 7.9%. This compared to the United States GDP at -2% during this same quarter. Even in a good year the United States GDP growth was at 4%. Many economists have revised annual GDP growth numbers between 7% to 9% for China. These numbers are extraordinary even when there is not a recession, but still down from the 10%+ averaged by China the past decade. The Chinese economy is still growing at a decent rate unlike many other economies which will continue to provide opportunities for consumers to spend.

In short, for the executive being kept up at night with the fear of losing their job, business, or market share, China may be the key to survival. Keep in mind, however, not every product or service may be appropriate for the Chinese market at this time, so careful research must be conducted in order to determine if it is China ready.



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