The best business in China....

...could be truck-driving! You have read about infrastructure problems in China - looks like anyone with a truck is getting into the fray. Road and rail freight were a $110 billion dollar industry in 2006, growing at 14%. That is $13 billion in new business last year! Sole proprietors comprise the majority of trucking firms. Although the multinationals compete within China, this is a very fragmented market with low barriers to entry. Porter and his 5 Forces also tell us that low switching costs encourage new entrants.

Express shipping is ramping up with the big boys all focused on the Chinese domestic market. Everyone has been negotiating for the limited number of flight frequencies that Beijing will grant to foreign air carriers. DHL has been servicing China from a Hong Kong facility in a JV with Air Hong Kong. They just announced a new hub in Shanghai. UPS(Shanghai) and FDX(Guangzhou) have been there since 2005. These guys are betting on the express parcel shipments to balloon as infrastructure improves on the mainland and exports and domestic consumer spending continue to build.