How to do business in China

ElaineR — Sun, 14 Jun 2009 13:57:28 +0000

How to do business in China pointers

It is indisputable that China’s growing economy has got huge business potential.

Either you want to sell to or buy from China, here are some pointers:

1) Know what is Greater China Area
First of all, you will need to understand what is Greater China Area and how do they operate logistically and what are the differences in terms of culture and government policy.
Greater China Area includes China (also called Mainland China or PRC), Hong Kong and Taiwan. Each has its unique histoy, economic development and even language (e.g. Hong Kong speaks Cantonese and writes in traditional Chinese, Taiwan speaks Mandarin and writes in traditional Chinese and Mainland China speaks Mandarin but writes in simplified Chinese. More info can be found in Chinese language). Before you start your business, it is important to do some research on the differences.

2) Play by the rules
Economically, China is growing stronger and stronger everyday. To do business with China or start up a business in China, you need to know that the government has laid out rules for foreign companies to follow. China is vast. I respect its leaders because it is not easy at all to maintain the stability. Rules are absolutely important. Find a lawyer or a trusted organization to help you get started.

3) Find a local partner
No matter how difficult it is, find a local partner. This will offer you great help. But be cautious. Do not rush. Getting the right partner is very important. You will need to find out if your potential Chinese partner’s business has registered with the General Administration for Industry and Commerce of the People’s Republic of China.

4) Find out where to set up your business
Find out where to set up your business. Should you set up in Hong Kong? Should you set up a representative office in Mainland China? Should you go for Chinese-foreign joint venture? These are all important to know before you start.

5) Find out how to transfer money
The ultimate aim of doing business is to earn money. There are restrictions of transferring money out from China. Find out clearly first before you decide how to manage your account. Talk to your bank.

6) Learn the culture and etiquette
Many businessmen go to China with fantastic ideas and strong financial background. But this does not always guaranteed you success. You will neeed to learn and understand the culture. If you fail in relationships, you will fail in your business. Remember the famous word: guanxi (relationship)?

7) Understand the internet and publishing law
It is essential that you understand the publishing law, especially in the internet area. To run a revenue-driven or advertising-placement web-site in China, you need to be licensed. There are problems of bandwidth which will affect the loading speed of your web-site both inside and outside China. These are issues you will need to look into if you want to have a web presence for your business.

Resources:
China State Administration for Industry & Commerce of the People’s Republic of China
Hong Kong Trade Development Council

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How to do business in China