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Investment trap

News center
2019/12/03 11:18
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  There is no development without investment. Investment is the only way to find new profit opportunities, and it also runs through the enterprise's operation: "investment in new projects, investment in expansion projects, investment in technological transformation, investment in holding shares." Investment has new hope, and every investment faces endless risks-especially for private enterprises, a single investment mistake may mean a lifelong depression.

  To investors, an unknown industry is like a beautiful mirage over a distant desert. It is beautiful because of its distance. Only after passing through, do you know that the beautiful distant view is just a picture of the fusion of various lights. Preferential policies, high profits and high returns in monopoly industries, high technology, etc. For entrants and new entrants, without actual investigation and sufficient risk preparation, they can only be a beautiful illusion.


  Policy opportunities are one of the most popular investment directions for Chinese companies. From a global perspective, the adjustment of policy directions and the introduction of new policies have a huge impact on related industries and have even made many well-known multinational companies. A large number of private enterprises along the coast of China have made full use of the opportunities of the country's reform and opening up policies, and formed China's most dynamic economic region. But the blind pursuit of policy opportunities often makes investors step by step into policy investment traps when they are unprepared.

  After China's entry into the WTO, due to its commitment to the protection of intellectual property rights and the consideration of improving the legal system, it will enter a very period of major adjustments in policies and regulations. Enterprises will experience more similar policy adjustments, and some will rely heavily on policies. If investment projects cannot be considered in time for retreat, turn, or reduce dependence on policies, once the policy is adjusted, they will face an embarrassing situation. In addition to the industry approval limits of policies, changes in policies, including risks to investors caused by adjustments in urban planning, time differences, space differences, and differences in enforcement of policies will become investment traps.

  To avoid policy traps, it is important not to rely too much on policy. Among domestically-invested foreign-invested companies, Singapore and South Korean investors have encountered policy traps and failed more, while European and American companies have relatively fewer. The main reason is that European and American companies are less attracted by preferential policies and more Look at the market environment of the place and the project's market prospects in the place.

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