The risks of working in China are well documented, and foreign firms often find themselves leaving the country with their tails between their legs. With that in mind, with booming economic conditions, the temptation to do business with the china market research reports is actually a strong one. One of the factors that will define the prosperity of your business relationship is risk management here are a few ideas to help you get stated.
Conduct a total and Thorough Risk Analysis. It’s amazing how many companies neglect to conduct some planning before they run into trouble. Risk analysis is difficult in China although not impossible, you have to rely on more than local media and representatives from the firm (and native government) to comprehend the current market position of your prospective partners. Your industry body as well as your chamber of commerce will be a good help in learning more, or you could engage an expert consultancy to accomplish the digging to suit your needs.
Prior to deciding to enter into a relationship determine how much risk you are prepared to bear and if the sale exceeds that threshold – leave. If you have a danger management insurance policy for other countries you should apply exactly the same high standards to dealing in China and never lower them simply because you are salivating at the idea of higher profits.
Develop a Problem Prevention Culture. As well as filling in lots of beautiful balance sheet predictions at the outset of the project, spend time planning around conditions that may arise during the course of things.
Develop a full set of contingency plans for each and every eventuality including practical solutions for use for workarounds. Ensure you have set milestones for every stage from the project, and an exit technique for every devote that plan too even if you don’t want to use one.
Always remember that business in China is situated around personal relationships and patent application process may mislead as well as outright lie to you personally when there is another personal relationship (outside of yours) that might be damaged through the truth.
Many Chinese businesses are also not unconstrained entities since they are within the West and local political issues could have a significant effect on their capacity to do business with foreign organisations. This might be very difficult to gain visibility of and enquiries into what’s happening could be brushed off, particularly if there is any “loss of face” associated with keeping you inside the picture.
Ideally you need to develop contacts and relationships in local government and central government who may be able to intercede for your benefit if things look to be progressing towards failure.
The complexity from the business culture in China means that you need to spend more time and effort understanding working practices prior to deciding to transfer to partnership and it also will make a risk management strategy an essential part of managing relationships successfully.
Needless to say you will find exceptions to the rule, and i also advise that whenever you do find a long term mentality supplier or partner, stay with him, he could save you a lot of time, effort and funds.
You ought to hence, realise because you must always have an array of potential suppliers and “friends” to change to if your service you receive does go down. Many foreigners just feel that they hit the jac.kpot after they fjhflj one deal plus they just sit back and expect a degree of service like they receive in their country without realising that this supplier will generally look first on the document translation to chinese he is going to make in that deal instead of during the length of the relationship.
The concept of quality: I adore this word. It will be the most used word in china aside from “yes, no and sorry”. Everything seems to be of the a high quality in china, that this word itself has lost its meaning. As Timothy Ferris says in the book “the four hour workweek”, the more you make use of anything, the better it looses its meaning.