How to do business in China - The author's view

Résumé du document

The Chinese population is immense, their history is very long and their culture is one of the most complex in the world. China is really a unique country for many reasons. First, we can notice a huge gap between urban and rural areas. China is so vast so there are a lot of cultural and economic differences. For example, some areas are very advanced (Shanghai) but most of them are backward. And the gap is growing due to rapid changes every year. These changes essentially concern advanced cities which are already open to the world. Second, China has exactly 34 local governments. So laws depend on the location and investors have to be aware of local laws and habits.

Before starting this paper, it is really important to present a brief summary of China's economic reforms. These reforms are the source of the success of China. China is a socialist country which has established a system of market economy. Reforms evolve very quickly. The main economic reforms of these last 30 years include the creation of the Special Economic Zones, the opening of 14 coastal cities and the recent opening of central and western regions to the world. Setting up the SEZs allows China to develop job opportunities, to obtain advanced technology or to learn about Western management skills. Furthermore, the opening of many coastal cities helped China to change its economical structure (especially the industrial structure) and to attract more FDI. Now, China makes full use of the advantages of its coastal cities. Finally, the recent attempts to open the central and the western areas to the world will certainly reduce the gap between the eastern and western regions. In this way, China is trying to unify its territory and reach the goal of a common prosperity.

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[...] http://www.chinaorbit.com/china-economy/china-joint-venture.html China orbit. China: Sino-Foreign Cooperative Joint Venture in China. [Online]. http://www.chinaorbit.com/china-economy/joint-venture-in-china.html China orbit. China: Wholly Foreign-Owned Enterprise in China. [Online]. http://www.chinaorbit.com/china-economy/china-wfoe.html Wikipedia. Intellectual property in the People's Republic of China. [Online]. http://en.wikipedia.org/wiki/Intellectual_property_in_the_People's_Republic_ of_China FPIF. Labor Rights in China. [Online]. http://www.fpif.org/articles/labor_rights_in_china Wikipedia. [...]

[...] or how to deal with Chinese people? Conducting business in China requires being aware of the constitution, laws and regulations, but this is not enough. Indeed, as Western thinking and China's traditional values differ, encountering the culture differences in China is therefore inevitable. That is why a better understanding of the cultural particularities of Chinese people is necessary when doing business in China China, a different culture As a matter of fact, China has a totally different culture than our cultures in the western countries, especially regarding business culture. [...]

[...] The involvement of a Chinese investor is not required. Thus, the foreign company keeps a greater control over the business. Potential problems with the domestic partner are also avoided. It can easily control over technology, know-how, operations and management. The wholly foreign-owned vehicle presents many disadvantages: the profit is not maximized and there is a risk of leakage of the intellectual property. Moreover, the foreign company often has difficulty in relationships with partners and there are more restrictions on project approval The intellectual property field in China China is known as unable to efficiently protect the intellectual property of companies. [...]

[...] [Online]. http://www.chinadaily.com.cn/china/2009-10/05/content_8763937.htm Npicenter. Danone and Wahaha Group Reach an Amicable Settlement. [Online]. http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=25140&zoneid =11 Chinalawblog. Danone v. Wahaha: Lessons for Joint Ventures in China. [Online]. [...]

[...] However, a good is not a substitute for a sound business strategy; it is more a tool to help implement a business strategy. III. Case study: Danone Group and Wahaha joint venture In order to understand better the way to conduct a business in China, we have chosen to illustrate our folder with a case study that was the China's largest beverage joint venture between Danone Group and Wahaha Group Company Presentation of the sino-foreign joint venture Danone Group is a French food-products multinational corporation based in Paris which is the world leader in fresh dairy products. [...]