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China Business » Information » Business Challenges in China Business Challenges in ChinaDue to China's entry into the World Trade Organization, the country has agreed to lower tariffs and abolish impediments to the market. It appears that China is actively entering the world trade arena and allowing the rest of the world to include Chinese citizens as a part of their market. These are good signs, especially for businesses which want to become a part of China's economic growth.There are some challenges, however, for those who venture into China's business world. Things which look good at the beginning may soon lose their lustre after a closer look. Some troublesome areas in the Chinese business culture have become rather well-known around the world. For some of these problem areas, the Chinese government is trying to make needed changes.  Such things as piracy and copyright issues are openly being addressed by the government. If the government had not begun dealing with guilty Chinese businessmen concerning stealing ideas and product plans, there would be fewer foreign businesses interested in entering the Chinese markets. When China was largely a cheap source of outsourcing, piracy and copyright problems hardly existed. As soon as western businesses began sharing their product plans and hiring Chinese manufacturers to produce the products, the stealing of the plans became rampant. This issue is now slowly becoming less of a problem for foreign investors in Chinese business, thanks to the government of China. Other challenges still exist, however. One of them is the slow but methodical lowering of quality of products being produced in China. An example of this is found in the Chinese silk industry. During the 1800s, the western world began buying silk products from China. When the demand for Chinese silk became greater, producers began cutting corners on the products. After a while, Chinese silk gained a reputation as being of lesser quality than the silk of other countries. This is a challenge for the foreign investor in this country. Quality control of products must be a continuing priority in order to be sure that the manufacturers are not trying to save money by using inferior quality in the products. A product recall is never a good move to need to make. Thus, high quality must be maintained from the manufacturer. It affects the company's customer relations. A major problem area for a foreign company planning to move into China is the lack of qualified managerial people who can speak the Mandarin language and understand the Chinese culture. Misunderstandings, often caused by errors in communication, can do significant damage to the smooth-running of a foreign business located in China. It has already been proven that putting everything into the hands of native Chinese causes some serious negative outcomes. It is better by far to send your own company managers to China to oversee the work. There are usually too few qualified people in a company to send for such oversight work. Lately it seems that cultural exchange programs could help bridge the gap of qualified workers. Local competition by Chinese entrepreneurs has become a challenge for some foreign businesses trying to operate in China. This applies largely to the retail market which is trying to gain loyal Chinese patrons. The Chinese seem to have an uncanny ability to copy successful western ideas and add enough Chinese culture to begin driving the western company out of business. There are challenges for businesses trying to make a profit in Asia's giant country. Still, a challenge can be good in some ways. Often, it opens the door for new insight to tackle the challenge. New products or new methodologies sometimes are the result. The challenges in China are no exception. Written on: 24th September 2007 Written by: R. Harris |
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