doing business in china
TRANSCRIPT
DOING BUSINESS IN CHINATHE NEW NORMAL
Countless companies are going after business in China.
As one of the world’s largest economies, China holds the promise of huge market potential and revenue opportunities for businesses worldwide.
However, detailed planning is critical for success in China.
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China’s regulatory authorities are increasingly diligent.
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They are cracking down on corruption and are often aggressive when enforcing regulations.
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But it is still very difficult to litigate in China. Authorities often view corruption and fraud as internal company control issues.
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With a government focused on building credibility, politics has become interwoven into many aspects of doing business in China.
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This extends to the legal system. Chinese courts are not independent from political motivations.
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So compliance is absolutely essential.
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This is also the first generation of Chinese nationals to work
with international companies.
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Robust, locally relevant compliance programs are critical in letting employees know the correct way to do business.
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But beware …
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Compliance programs cannot prevent corruption.
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They can only slow down perpetrators and provide adequate ‘monitoring moments.’
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Given the corruption risks, it’s not surprising that 52% of companies we
asked were most concerned about HR considerations in China.
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Find good people to run your China operations and stay deeply engaged with them.
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Ensure your local legal representative or general managers are learning both Chinese and home
country laws.
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Your choice of entity structure will also affect many things, from hiring options to
business activity restrictions.
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Regulated by Chinese employment contract law, different entities
need to adopt different employment methods.
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If you fail to take this into consideration, it will definitely affect your ability to hire prospective employees in China.
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Know what you’re doing in china and why before you choose the mode of entry and entity type.
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You must also accept the fact that foreign companies are not treated the same as native ones.
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And some industries are off-limits to foreign investment completely.
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So get a deep understanding of the political and regulatory landscape.
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Do a thorough risk assessment of your business models.
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And adjust your business plan to China’s five year plan.
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Otherwise, you will find doing business in China very difficult.
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Need expert advice on planning your operations in China?
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