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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.

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The 5 biggest problems regarding conducting business in china

  1. 1. THE 5 BIGGEST PROBLEMSREGARDING CONDUCTINGBUSINESS IN CHINAFor additional information about Business with Chinaplease visit
  2. 2. www.China-Business-Connect.comWhile there are plenty of upsides to conducting business in China,either through a partnership or by setting up an office, but there arestill major problems that you will face.Although most business people are optimistic about these problemsbeing addressed over the next five to ten years, China is notoriouslyslow to change their legal and business culture so these problems maybe relevant for longer than expected.The Chinese market is starting to open up and allow foreign businessesto market to their consumers and they are shifting away from primarilymanufacturing. By addressing the problems in at least a cursory manneryou will be better positioned to take advantage of the undeniableopportunity.2
  3. 3. www.China-Business-Connect.com1. MARKET ACCESS FOR THE SERVICES SECTORAs with most countries, setting up operations can be difficult with theadministration, permits, and finding local qualified workers and in Chinait’s no different.There are 8 major constraints that face service companies that arelooking to establish themselves or to grow their operations. Theselimitations and problems include: human resources and findingqualified workers; administrative licensing and approvals; competitionfrom Chinese companies; uneven playing field compared to localcompanies; volumes of competition from other foreign companies;investment restrictions; limited market penetration; and slow pace ofgovernmental and legal policy reform.3
  4. 4. www.China-Business-Connect.com2. DISCRIMINATION FROM CHINESEGOVERNMENT (COMPARED TO DOMESTICCOMPANIES)As the competition and number of foreign companies that areexpanding to China increase, the government is tending to favor thelocal Chinese businesses.Most businesses tend to agree that this is changing for the better, albeitat a remarkably slow pace.There are a few key areas where this is explicitly noticeable and theyconsist of: project bidding; receiving subsidies; unnecessary restrictionson business; and ability to open new branches at the same pace as theirChinese counterparts.4
  5. 5. www.China-Business-Connect.com3. TRANSPARENCY IN REGULATIONS ANDBUSINESS POLICIESThis problem contributes to most of the other problems to make themworse, and while the government insists that it is doing what it can toremedy this problem, most businesses that are operating in Chinaalready tend to disagree.It is hard to know where you stand in terms of project bidding orregulations if there is limited transparency.5
  6. 6. www.China-Business-Connect.com4. RESTRICTIONS ON INBOUND INVESTMENTS,SUCH AS FOREIGN OWNERSHIP LIMITSThe lack of transparency in regards to the amounts and specifics ofinbound investments has cost many businesses time and money, andcan be remedied with clear, fair outlines on investment limits.As there are different limits across different industries and types ofproducts, the restrictions that are in writing don’t always match what isrestricted in reality.6
  7. 7. www.China-Business-Connect.com5. STANDARDS AND A CLEAR FORM OFASSESSMENTAlthough there are rules and regulations on how products can bedesigned, manufactured, sold, used, and recycled, most businessesoperating in China agree that they are overly complicated.This complication is said to occur in order to protect the local Chinesecompetitors who get to essentially play by a different set of rules.7
  8. 8. For additional information about Business with Chinaplease visit