Chapter 1

The Business Landscape in China

This chapter is designed to provide a broad overview of the business landscape in China. Without a fundamental understanding of the key components that make up the business landscape, readers may find it hard to understand the intricacies of doing business in China and how it relates to the core topic of conducting due diligence in China.

Conducting due diligence in China requires an intimate understanding of the business landscape in China and understanding how these various factors interact together to pose challenges. An in-depth due diligence is critical in helping potential buyers to identify the workings of a company and its strategy, and to uncover any hidden issues.

In this chapter, we discuss the characteristics of Chinese political, business, and social landscapes and their relevance and impacts to the due diligence process. The three landscapes are inherently wide in scope and cannot easily be exhaustively covered as they are also dynamic and changing with the times. The purpose is to inform readers to pay attention to the context and unique circumstances that surround Chinese due diligence. The landscapes described may share some similarities with other regions or countries, but, seen as a whole, the Chinese characteristics of these landscapes are unique to China.

First, we cover the macro and structural domains that include a discussion on the macroeconomic conditions and system of rules and laws in China. We also cover the ...

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