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Country Risk Analysis of Doing Business in China - What Businesses Need to Avoid in China
Doing business in China is different from that of Europe and America. There being late for an appointment is considered a serious insult. It is also necessary to be polite and to keep a distance; not being too friendly. Also, don’t say no directly to questions, only things like ‘maybe’. Unless these, and the time taking manner of doing business is not fulfilled, the business will not be concluded.
China also gives subsidies to their exporters, and puts tariffs on imported goods, putting their companies into a competitive advantage, both at home and abroad. This goes hand-in-hand with the next point, the size of the government and its influence in business. Obviously, the smaller the government is the better for private companies.
There are companies that are viewed as entities wanting to conquer the country, and its people. Therefore foreign investors, like McDonalds, have to spend a lot of money adapting to the local tastes, and to sponsor local entities, and events.
Finally, but certainly not least, the economic development is also a key issue in being able to be successful in China. In China the economy is much less developed, than in most European countries, and the developed world, decreasing the purchasing power also, having the foreign investor, like McDonalds, reduce its prices, and maybe even the profit margin it has got used to.
To conclude the above stated reasons are very important ones to consider for a foreign company, as the potential success or failure depends on it in its operations in this vast, continent-sized country, China.