Doing Business in China For Dummies®

Setting the Stage

Along with a good business model, the following elements can help your company succeed in China. Some of them may seem self-evident; however, many foreign investors forget them by the time they start getting serious about China — or never knew them at all.

Being in the right state of mind

Avoid having a must-do attitude about China. China isn’t the right place for many businesses (see Chapter 1); however, some of them don’t find that out until after they’ve already made the plunge. If you go into your feasibility study thinking that your company absolutely must be in China, then your evaluation process is going to be flawed. You’ll almost inevitably conclude that your company will do well in China. When you’re operating under this pressure, you may compound the mistake by rushing and cutting corners.

The proper approach is one of cautious optimism. If you think China may have an opportunity for your company, you should investigate it impartially. If your original notions of how to do business there look like they may not work, see whether changing the model works better. Above all else, don’t lose objectivity.

Budgeting enough money

China is an expensive place in which to do business. You’re going to need to hire good lawyers, accountants, and consultants. Partly because of China’s bureaucracy, its developing legal system, and the language issues, these professionals ...