A process of starting your business in China
You have heard the siren call of business in China. The President's recent trip, with all the associated stories, raised your awareness of opportunities there. The photographs show modern cities with high-rise buildings, busy airports, golf courses, and beautiful scenery. There are logos of well-known American companies juxtaposed with just enough of the ancient and "different" to lend some sense of the exotic. There are even lists of Chinese companies that have projects for which they are seeking outside partners.
So you begin your homework. You investigate the availability of land and buildings and the possibility of special enterprise zones. Then you check on the necessary infrastructure to support your needs -- energy, transportation, and communication. You learn about the tax and accounting laws; determine whether your business is one of those favored by the government with special rates on property use and taxes; decide whether you would be better off doing a joint venture or owning your own business there. You investigate the labor supply, labor laws, even the health care system. You even evaluate the likely impact of the financial crisis in Asia on your project, and figure out how to repatriate your profits.
Everything points to a good investment opportunity. The numbers are positive. The reactions to your initial inquiries are promising. But if you stop your homework there, you may be headed for trouble. For an American investigating a joint venture with a Canadian company, this amount of "due diligence" might be sufficient; but for doing business in China, it may not. The hidden obstacles of tradition, social structure, and thought patterns require extensive, time-consuming experience to overcome.
Understanding the Culture: Culture might be described as the complex pattern of living that humans develop and pass on from one generation to the next. It encompasses the norms and values of a society, including appropriate ways to treat one another. It defines the natural world and human nature. It establishes our assumptions and creates the world "taken for granted."
The more similar one’s own culture is to another in history, language, religion, and even geography, the less difficult it is to work in that society. Even within a single nation there are regional, class, ethnic, and religious differences that may lead to misunderstandings. But when societies differ on most of these characteristics and have had minimal contact with each other, the potential for misunderstanding grows exponentially. For most Americans doing business in China, this potential is very high. In fact, you can be certain that there will be innumerable, unforeseen challenges, even when there is an honest effort to learn about and understand China and its people.
