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Navigating the Challenges of Doing Business in China: Avoiding Common Mistakes

Entering the Chinese market can be a lucrative opportunity, but businesses often face challenges that lead to mistakes and regrets. Common pitfalls include inadequate preparation, choosing the wrong location, or partnering with unsuitable entities. Understanding the importance of due diligence, cultural differences, and clear communication is crucial. This guide highlights the essential steps for successfully establishing your business in China, ensuring informed decisions in a complex landscape.

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Navigating the Challenges of Doing Business in China: Avoiding Common Mistakes

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  1. Avoiding problems, mistakes and regrets in China Giles Blackburne 16 May 2013 Add text here

  2. What kinds of Problems, Mistakes & Regrets? • Lack of preparation and research • Entering the market for the wrong reasons • Choosing the wrong location • Choosing the wrong structure • Choosing the wrong partner • Conveying the wrong message • And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

  3. No excuse for not preparing well….. http://www.eusmecentre.org.cn/

  4. www.cbbc.org

  5. What kinds of Problems, Mistakes & Regrets? • Lack of preparation and research • Entering the market for the wrong reasons • Choosing the wrong location • Choosing the wrong structure • Choosing the wrong partner • Conveying the wrong message • And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

  6. Are you entering China for the right reasons? • China is a large market…………. • China has low cost labour……….. • Not much competition for my product……

  7. What kinds of Problems, Mistakes & Regrets? • Lack of preparation and research • Entering the market for the wrong reasons • Choosing the wrong location • Choosing the wrong structure • Choosing the wrong partner • Conveying the wrong message • And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

  8. Getting the location right….. • Proximity to market • Proximity to ports • Proximity to raw materials • Development Zones • Coastal vs Inland • Efficient infrastructure • Cheap labour/educated labour • Welcoming and flexible local government support • Preferential policies and tax concessions?

  9. Opportunities in cities you may not have heard of……

  10. Sector: Advanced Engineering

  11. Sector: ICT

  12. What kinds of Problems, Mistakes & Regrets? • Lack of preparation and research • Entering the market for the wrong reasons • Choosing the wrong location • Choosing the wrong structure • Choosing the wrong partner • Conveying the wrong message • And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

  13. Choosing the right structure for you….. • Export • Agent/distributor • Representative office • Investment • Ownership: • Joint venture • Wholly Foreign Owned Enterprise • Activity: • Manufacturing • Trading • Consultancy • ‘Holding Company’; ‘Minimum Registered Capital’ • Is investment in your sector ‘encouraged, restricted, prohibited or permitted’. • Chinese employment law

  14. What kinds of Problems, Mistakes & Regrets? • Lack of preparation and research • Entering the market for the wrong reasons • Choosing the wrong location • Choosing the wrong structure • Choosing the wrong partner • Conveying the wrong message • And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

  15. Choosing the right partner…. • Considering the locationof the partner and proximity to actual market opportunities • Understanding the technical expertise already possessed by the Chinese partner • Assessing the existing production and distribution capability of the partner • Knowing the quality of the partner’s relationships with other players critical to success • Understanding the objectives of the partner. Are they suitable? • Knowing the background of the partner

  16. What kinds of Problems, Mistakes & Regrets? • Lack of preparation and research • Entering the market for the wrong reasons • Choosing the wrong location • Choosing the wrong structure • Choosing the wrong partner • Conveying the wrong message • And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

  17. Conveying the right message • Selecting a brand name that suggests something about the product benefits and product qualities and which does not carry poor meaning in Chinese • Conveying your company background clearly and confidently in the appropriate language • Communicating product benefits within the context of relevant government policies • Keeping communication consistent and through the right people • Consider adapting your offer or business model to suit the Chinese market

  18. What kinds of Problems, Mistakes & Regrets? • Lack of preparation and research • Entering the market for the wrong reasons • Choosing the wrong location • Choosing the wrong structure • Choosing the wrong partner • Conveying the wrong message • And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

  19. Due diligence • Registering intellectual property • Protecting intellectual property • Paying attention to cultural differences

  20. Thank you! • 谢谢

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