The document discusses small and medium enterprises (SMEs) in China, outlining various myths, challenges, and opportunities. It notes key challenges including unclear regulations, a lack of transparency, burdensome fees and taxes, intellectual property right issues, access to capital, and corruption. However, it also discusses opportunities in sectors like technology, services, education, tourism, and energy. The document provides advice for SMEs looking to enter the Chinese market, including localizing management and staff while maintaining control, vetting partners carefully, and starting small in one city at a time.

1. China Trade Strategies "SMEs in China: Myths, Challenges and Opportunities"

2. "SMEs in China: Myths, Challenges and Opportunities" Definition of SME in China Overall Industrial Policy Sets the Stage Changing Trade Landscape Wholly Owned Venture vs Partnerships Workarounds Power of Commitment to the Market Spending ahead of revenue

3. "SMEs in China: Myths, Challenges and Opportunities" IPR Credit Standards Labor Law Anti-Monopoly Law NDRC Growing Influence Growing Nationalism & Trade Tensions Corruption and How to Deal with it

4. "SMEs in China: Myths, Challenges and Opportunities" Price & Quality Issues Local or Foreign Quality Assurance Firm? Overly Burdensome Admin Fees & Taxes Unclear Regulations, Lack of Transparency, Inconsistent Application of Regulations (EX: Business License) Lack of Access to Capital, Limited Financing Options

5. "SMEs in China: Myths, Challenges and Opportunities" Localized Management—Globalized Conduct. “Think China-Act Globally” Power of Control lies in HR and Accounting

6. Opportunities Technology All Services Education & Training High quality American products Tourism (both directions) Energy and Environmental Sectors

7. Getting Started Get on the ground and ‘just do it’ Vet partners but control your HR and Accounting Relationships are still important but growing influence of rule of law. If you go FICE use ‘contract workarounds’ to deal with sales, distribution, licensing, etc Localize staff but use foreign senior management to maintain vision, passion, values, and control your destiny One city at a time approach

8. Resources USFCS: Knowledge and advice, GKS US Citizen Services American Chamber of Commerce US China Business Council FESCO Misc: That’s Beijing, City Weekend, Beijinger, etc

9. China’s Leadership Agenda Economic Inflation Unemployment-Ripple effect of US crisis Pressure on currency appreciation Companies leaving China Climate Change Corruption Food Safety (China views this as political) Growing China-US-EU trade tensions

10. China’s Leadership Agenda Political Taiwan Pressure to reform & democratize Tibet Darfur Difficulty in controlling provincial governments

11. China’s Leadership Agenda Social Growing Unrest (Farmers, Environmentalists, etc) Falun Gong Infectious Disease: Bird Flu/SARS, Influenza Terrorism (recent incidents) Coal Mine Disasters Olympic Boycotts-Spielberg-Clooney Water and Food Shortages Three Rivers Gorge