The risks of conducting business in China are well documented, and foreign firms often find themselves leaving the country with their tails between their legs. With that said, with booming economic conditions, the temptation to do business with the inschina is actually a strong one. One of the factors which will define the achievements of your business relationship is risk management listed here are a few ideas to help you get stated.
Conduct a total and Thorough Risk Analysis. It’s amazing the number of companies neglect to do a little planning before they come across trouble. Risk analysis is hard in China but not impossible, you need to rely on more than local media and representatives in the firm (and local government) to understand the marketplace position of your prospective partners. Your industry body or your chamber of commerce will certainly be a good help in discovering more, or you may engage an expert consultancy to perform the digging for you personally.
Prior to deciding to enter a partnership see how much risk you are prepared to bear and if the offer exceeds that threshold – walk away. In case you have a risk management insurance policy for other countries you should apply exactly the same high standards to dealing in China rather than lower them since you are salivating at the thought of higher profits.
Establish a Problem Prevention Culture. Along with filling in lots of beautiful balance sheet predictions at the outset of the project, spend some time planning around issues that may arise during the course of things.
Establish a full set of contingency plans for each and every eventuality including practical solutions to be used for workarounds. Ensure you have set milestones for every stage of the project, as well as an exit strategy for every spot in that plan too even though you don’t intend to utilize one.
Always remember that business in China is situated around personal relationships and copyright registration china may mislead or perhaps outright lie for you when there is another personal relationship (away from yours) that might be damaged through the truth.
Many Chinese businesses are also not unconstrained entities because they are inside the West and local political issues may have a significant impact on their capacity to do business with foreign organisations. This might be very difficult to gain visibility of and enquiries in to what’s happening could be brushed off, particularly if you have any “loss in face” connected with keeping you inside the picture.
Ideally you need to develop contacts and relationships in local government and central government who might be able to intercede for your benefit if things turn to be progressing towards failure.
The complexity in the business culture in China means you need to spend more time and energy understanding working practices before you move into partnership and it makes a risk management strategy a crucial part of managing relationships successfully.
Of course you can find exceptions to the rule, and i also advise that when you do look for a long term mentality supplier or partner, stay with him, he will save you considerable time, effort and funds.
You should hence, realise the fact that you need to usually have a range of potential suppliers and “friends” to change to in case the service you obtain does go down. Many foreigners just feel that they hit the jac.kpot after they fjhflj one deal and they also just sit back and expect a level of service like they receive in their country without realising that the supplier will generally look first at the document translation to chinese he is going to make in this deal rather than during the length of the relationship.
The concept of quality: I really like this word. It will be the most used word in china apart from “yes, no and sorry”. Everything appears to be of these an exceptional in china, that this word itself has lost its meaning. As Timothy Ferris says in the book “the 4 hour workweek”, the greater you use anything, the better it looses its meaning.