Doing Business in China For Dummies®

Insuring Your Business Risks

China is a risky place to do business, and the risk is more than the possibility of losing capital in a failed market entry — or someone knocking off your product and selling it for a fraction greater than your cost. Just think about the physical risks to your business in China: typhoon, flood, earthquake.

The earthquake risk alone is enough to make you shake in your boots. Northeast China’s Tangshan earthquake of 1976, which registered 8.2 on the Richter scale, leveled the city and killed about 250,000 people. The government rebuilt the entire city.

You can’t prevent natural disasters, but you can make sure your company’s finances don’t end up in ruins. The Chinese market has opened up to foreign insurers in recent years. You can now choose from a good selection of companies and products to help your company with its insurance needs. This section goes over some of your options.

Controlling the insurance program

Chinese companies commonly want to control the insurance program instead of allowing you to take an active role, especially in joint ventures. But your company’s insurance arrangements are too important to leave to someone else to manage. And you never know whether the Chinese people you’re dealing with want control of the program because they have some financial interest in mind.

Make sure your company controls the insurance program — even ...