It is quite obvious that many companies and individual businessmen choose to invest into China with the trends of internationalization and globalization. However, as a China native businessman, I would like to advise you several things you must know before investing into China, and maybe you have to take these into consideration when you are deciding to enter the market of any countries.
- Stay away from politics
Politics can sometimes help a company go through a rapid development. But I would like to suggest you to stay away from politics, to give your company a healthy growing up. Especially do not get your company involved into any political disputes between China and your country. The Lotte from South Korea is a typical example. Its attitude towards THAAD irritates millions of China consumers.
- Relation matters
Chinese people pay more attention into relationships than most western countries. It is in Chinese words called “Guanxi” and it is one of the major issue you cannot get yourself avoid of if you want to make a successful business in China region. A good relation including relation with government & medias, relation with your suppliers, relation with your clients etc.
- A Chinese partner
A good Chinese business partner can help you solve a lot of problems, especially the varied relations that always puzzles foreigners in China. However, a good and trustable partner can make your business thriving fast, while a low-profile partner may put your business into a dangerous situation.
- Rising cost
You have to keep in mind that China is not what you thought it was 10 years or 20 years ago. China business saw great booming in last decade which results in a rising cost of not only raw materials & office rent but also the employed staff salary. The keep rising cost in recent years ripped many foreign direct invest company off China and they are now heading towards India, Vietnam and other low-cost regions.
- Contract & law effectiveness
Contract and agreement is important for a cooperation and transaction, but don’t think contract and law can always protect you. Your clients may bankrupt and cannot pay your balance if you suit them. Your partner may disappear with all the resources of your company but you cannot solve the issue even though law is there.
In a word, Chinese people are open, polite and easy going. You are mostly welcome to invest into China. However, in order to make a good beginning of a successful business, please be cautious and take a full investigation and a sound consideration of all factors before you make your decision of investing into China.