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China’s most profitable businesses
The Epoch Times
Real estate is one on the fastest growing and most profitable businesses in China. The 100 richest men in China in the last three years are in the real estate business. Twenty-five real estate companies were among the top 100 most profitable companies in 2000 and thirty-seven in 2003.
The average profit for real estate in the world is five percent, but in most cities in China it is above 10%. Beijing’s real estate leads the way with a 17.1 percent profit margin for homes, but in some areas the profit margin soars to 20.4%.
Elementary and high school education
Administers and teachers can easily ask for extra fees from students and this is especially true in larger, more prosperous cities. In recent years education expenses have become a huge part of a family’s overall expenses. School administrators and teachers have collected an estimated 200 billion Yuan (US $24.1 billion) from the 300 million students attending school in China. Education in China is compulsory and free to the public for the first nine years, but this has not stopped the illegal collection of money.
Increased school fees is fast becoming the number one complaint for parents in China. Collecting fees does not occur in the poor, rural areas of China because students would drop out rather than pay.
Dazzling-looking selected books sold in books stores and by street vendors are often pirated copies lacking any credible content, are poorly copied and are out-of-date. However, publishing these pirated books is a highly profitable business in China. Some publishers reprint translated historical books and foreign masterpieces but the translation is often poor and the pictures do not match the subject matter. While the books are becoming more beautiful and elaborate the reader often just pays for a nice looking book with substandard content
National statistics show that the automotive sales profits rose 8.15% in 2003. This actually represents a dramatic drop in profits; in 2002 the sales profit margin was 14.8%. Consumers generally only buy sale priced automobiles and believe they pay more for a car than people overseas. Many consumers complain about the automobiles standard quality. While it might not appear to be a very profitable industry, there is money to be made with some automotive companies making huge profits.
According to statistics, more than 300 million people throughout China wear glasses and the number keeps rising. People in urban areas generally replace their glasses every 3-4 years and in major cities people replace them about every 2-2.5 years. Due to the high demand for eyeglasses, the industry is highly profitable. Approximately 50 million pairs of glasses are sold each year including sunglasses, bifocals, and protective lenses.
Many consumers complain about the high cost of glasses. The actual cost of the lens is not even 10% of the cost that the glasses are sold for. While the cost of glasses is about 20 yuan ($2.41) they are sold for 200 yuan ($24.15). Salesperson’s average about a 50% profit for each pair sold. No wonder many people exclaim: glasses are money in my eyes!
Telecommunication and cell phones
Telecommunications is a large service industry; it not only covers telephone communication, but also electronic production of television, radio, and cell phones. The most profitable sector of the telecommunications industry is telephones and cell phones. Due to the high demand, telecommunication industry ranked fifth as the most profitable business for 2003.
Last year there were 26,671 complaints and on the top of the list was consumers’ right to know more about the product being sold. However, due to high demand of the product the industry does not make needed improvements.
The high cost of medicine makes this industry highly profitable, but the industry has been plagued with an onslaught unlicensed doctors selling fraudulent medicine on the streets.
Medical costs are extremely high. A well-known Chinese expression goes: “The first tax is light, the second tax is heavy and the third tax is abyss,” meaning seeing a doctor is light, taking medicine is heavy and being in hospital is abyss.
How much does it cost to cure a cold? Ten years ago, the total price including the doctor’s visit and prescription, was approximately 10 Yuan (US $1.25). Today the cost of cold can easily total up to 70 Yuan (US $8.75) and sometimes costing as much as 100 Yuan (US $12.5). The price of medicine has increased 100-fold in the last 20 years with the costs of some medicine increasing 200 times.
For most residents in cities and towns, the cost of medical expenses is a heavy burden, but for rural farmers whose annual income is less than a 1000 yuan (U.S. $125) the cost is unbearable. Many rural residents cannot afford to seek medical attention and must endure the pain of their illness or else leave the family destitute due to medical expenses.
Intermediary agencies for studying abroad
Another profitable business is the intermediary agencies that help students studying abroad get through the paper work. These agencies generated revenue of 3,000 million Yuan (US $375 million) with 20,000 people working in the field. China has more students studying overseas than any other nation with over 200,000 students studying abroad last year. These lucrative agencies help students with application forms and visas. In 2003, this industry had the most consumer complaints lodged against it.
Along with the Internet has come the rising industry of network games. The relatively new yet highly commercialized business generated revenues of 2,450 million Yuan (US $306.25 million) for 2003, a 150% profit rate from the previous year. The online Internet guru Chen Tianqiao of Shanghai Shengda Network Development became the 10th richest person in China after starting the business three years ago. People say he is accumulating a real fortune -- virtually.”
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