Businesses around the world are in the rush for the market of one billion customers. But how many of them will get burned in the process? This website is a starting point for people who want to do business in China.
Did you know?
- Three of the world's top 10 tallest buildings are in mainland China. And another four of the top 10 are in Hong Kong and Taiwan.
- There is a Starbucks in the Forbidden City. And at the Great Wall of China.
- More than 300,000 Chinese have a net worth over $1 million, excluding property, according to Merrill Lynch & Co. And Chinese are the third-biggest luxury goods purchasers on earth, with more than 12% of world sales, according to Goldman, Sachs & Co.
- The Rolls-Royce outlet in Beijing is one of the brand's top-selling dealerships. And Bentley Beijing has sold a half-dozen 728 stretch limos -- at $1.2 million each, the world's most expensive car -- more than any other dealership in the world.
- China Construction Bank, one of the four largest Chinese state-owned banks, went public last year in the largest IPO globally for the past 5 years. It is now one of the world's top 10 banks by market cap. (Not bad for a banking system the world had declared bankrupt.)
- 5,896 people were killed in coal mining accidents in China in the year 2005. (The figure for the U.S. during the same period: 22)
Starting Points
If you don't learn anything else about doing business in China, remember these key points.
2. Avoid joint ventures. Don't join up with a local partner, establish a "wholly foreign owned enterprise" (colloquially known as "WFOE", pronounced "woofey" by the cognescenti). Whatever you think you might gain in local know-how and contacts from a partner you more than lose in disputes, misunderstandings, labour problems and their blatant theft of your technology. If you want to be successful, go it alone.
3. Your technology/IP will be stolen. Even if you don't partner up with a local partner and give them your technology for free, your technology and IP will inevitably be "appropriated" by local competitors. Expect for this. Plan for it. Build it into your business model.
The China Boosters
These books give a helpful overview of China, the business environment and the opportunities that have attracted so many.
China, Inc.: How the Rise of the Next Superpower Challenges America and the World
An excellent overview of the megatrends shaping China at the moment, including some insightful glimpses into the day-to-day lives of China's urban dwellers, all told with an eye to how this affects the rest of the world. Highly recommended.
Amazon Price: $17.16 (as of 07/25/2008)
One Billion Customers: Lessons from the Front Lines of Doing Business in China (Wall Street Journal Book)
Amazon Price: $18.48 (as of 07/25/2008)
The Chinese Century: The Rising Chinese Economy and Its Impact on the Global Economy, the Balance of Power, and Your Job
Amazon Price: $20.43 (as of 07/25/2008)
The Doomsayers
Caution is warranted - anyone planning on doing business in China should read at least some of the following books for a bit of balance against all the optimism.
Mr. China: A Memoir
Anecdotes from the "front lines" - Clissold spent the 90s investing in China and then becoming involved in numerous disputes. His stories are both entertaining and essential reading for anyone planning to do business in China.
Amazon Price: (as of 07/25/2008)
The China Dream: The Quest for the Last Great Untapped Market on Earth
Studwell's book examines the West's long fascination with China, and reveals how the economic realities rarely match the illusory promises of the "China Dream". A sobering account providing some balance to the usual China Euphoria.
Amazon Price: $11.70 (as of 07/25/2008)
The Coming Collapse of China
Chang is one of the most prominent China Bears, and argues that it's only a matter of time before the entire Chinese System collapses.
Amazon Price: (as of 07/25/2008)
China Business News
Latest news from the official People's Daily
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