Doing Business in China For Dummies®

Considering Why and How You Want to Do Business in China

Before making the jump into China, consider your goals. Some people want to use China to improve their existing model or to sell into a growing Chinese market. Others think about China because their competitors are already there. Whatever your reason for considering China, think carefully about your objectives and keep them in mind throughout the course of planning and executing your business. The following sections explain the basics about how you can use China’s enormous population to achieve those goals.

Manufacturing in the World’s Workshop

China is often referred to as the World’s Workshop because of the many goods it produces for export. Since the 1990s, China has taken over manufacturing from many higher-cost countries and regions, such as the United States, Japan, and Western Europe. It has also welcomed manufacturers from places such as Hong Kong, Taiwan, and Mexico. Shifting factories to China has meant job losses in some countries, but it’s kept prices low for consumers everywhere.

At first, China manufactured low value-added products, such as toys and sunglasses. The country continues to do so, but China is becoming a larger player in manufacturing high value-added products. For example, China today is a major producer of semiconductors, mobile phones, and computers.

Surprisingly, China’s manufacturing labor costs — which are a fraction of the cost in developed countries — aren’t the lowest in the world. Other ...