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Tips for Doing Business in China

Updated on October 15, 2009

Vital factors pertaining to doing business in China?

With enhanced government reforms and drastic improvement in international relations, China has emerged as a lucrative economy for investments. The rapid economic growth, and ever growing foreign investments, provides potential investors with a chance of expanding their businesses. Doing business in China implies constant interaction with the Chinese bureaucrats and locals. Thus, one of the imperative tips of doing business in China includes getting to know more about the business etiquettes and culture that exists there. You have to get familiar with protocols and negotiation techniques here for maximizing the scope for your business. Researching about cultural facts and how it can influence the existing commerce culture and etiquette need to be evaluated.

One of the benefits of doing business in China includes the essence of Confucianism, which largely affects the economic sector. The theory of Confucianism largely rotates around notions of harmonious relationships. There is a subtle manifestation of avoiding conflicts and trying to maintain appropriate demeanor here. Business in China is largely affected by the way you express yourself, along with your body language. For example, aggressive shaking of hands is not considered to be a positive gesture. The Chinese don’t believe in physical contact when doing business, and so putting your arms around the associate’s shoulders must be avoided.

Knowing a few techniques and business etiquettes would make you familiar with the ease of doing business in China. Simple tips include using business cards with Chinese translations of names for the convenience of the receiver. Always try to establish your contacts by acting as an intermediary because it provides you with multiple benefits of getting references, navigating through the bureaucracy and also getting familiarized with the local business networks. There are three main areas where potential investors can establish their business and make investments. These include the completely foreign-owned enterprises, cooperative Chinese-foreign enterprises and the Sino-foreign cooperative ventures. The option that you choose should be dependant on the investment direction, total amount that you want to invest, and also the environment.

Some of the challenges of doing business in China include economic domination by the government since China is a socialist state. It is vital for all foreign investors to learn the norms for coordinating with the Chinese government at different levels. Getting a local partner can help you to reduce the delay caused in this processes. Some of the vital relationships that you need to focus on include the government body, local partners, investors, and the relationship shared with the staff.

The four main areas of focus for the prospective investors in China should be-

  • Learning about the functional and changing government rules and regulations
  • Influence of the government in the private sector
  • Crossing language barriers
  • Researching about the precise functioning of the business sector in China

Comprehensive evaluation of these factors would ensure that you are able to get over some of the common problems suffered by potential investors. This would also help you to create a niche market base for your business, and its expansion. More about doing business in China.

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