While there are plenty of upsides to conducting business in China, either through a partnership or by setting up an office, but there are still major problems that you will face.

1. THE 5 BIGGEST PROBLEMS
REGARDING CONDUCTING
BUSINESS IN CHINA
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While there are plenty of upsides to conducting business in China,
either through a partnership or by setting up an office, but there are
still major problems that you will face.
Although most business people are optimistic about these problems
being addressed over the next five to ten years, China is notoriously
slow to change their legal and business culture so these problems may
be relevant for longer than expected.
The Chinese market is starting to open up and allow foreign businesses
to market to their consumers and they are shifting away from primarily
manufacturing. By addressing the problems in at least a cursory manner
you will be better positioned to take advantage of the undeniable
opportunity.
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1. MARKET ACCESS FOR THE SERVICES SECTOR
As with most countries, setting up operations can be difficult with the
administration, permits, and finding local qualified workers and in China
it’s no different.
There are 8 major constraints that face service companies that are
looking to establish themselves or to grow their operations. These
limitations and problems include: human resources and finding
qualified workers; administrative licensing and approvals; competition
from Chinese companies; uneven playing field compared to local
companies; volumes of competition from other foreign companies;
investment restrictions; limited market penetration; and slow pace of
governmental and legal policy reform.
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2. DISCRIMINATION FROM CHINESE
GOVERNMENT (COMPARED TO DOMESTIC
COMPANIES)
As the competition and number of foreign companies that are
expanding to China increase, the government is tending to favor the
local Chinese businesses.
Most businesses tend to agree that this is changing for the better, albeit
at a remarkably slow pace.
There are a few key areas where this is explicitly noticeable and they
consist of: project bidding; receiving subsidies; unnecessary restrictions
on business; and ability to open new branches at the same pace as their
Chinese counterparts.
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3. TRANSPARENCY IN REGULATIONS AND
BUSINESS POLICIES
This problem contributes to most of the other problems to make them
worse, and while the government insists that it is doing what it can to
remedy this problem, most businesses that are operating in China
already tend to disagree.
It is hard to know where you stand in terms of project bidding or
regulations if there is limited transparency.
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4. RESTRICTIONS ON INBOUND INVESTMENTS,
SUCH AS FOREIGN OWNERSHIP LIMITS
The lack of transparency in regards to the amounts and specifics of
inbound investments has cost many businesses time and money, and
can be remedied with clear, fair outlines on investment limits.
As there are different limits across different industries and types of
products, the restrictions that are in writing don’t always match what is
restricted in reality.
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5. STANDARDS AND A CLEAR FORM OF
ASSESSMENT
Although there are rules and regulations on how products can be
designed, manufactured, sold, used, and recycled, most businesses
operating in China agree that they are overly complicated.
This complication is said to occur in order to protect the local Chinese
competitors who get to essentially play by a different set of rules.
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8. For additional information about Business with China
please visit www.China-Business-Connect.com