The stressful relationship between Chinese organizations and other foreign organizations is stressful and that is changing the normal relationships between nations. Earlier the process was simple but now it has become complicated and that is introducing tensions in the relationships. The questions faced by Chinese business lawyers from law firms have also changed with changing times and relationships. Nowadays foreigners asked whether they have to open branches in each city they wanted to do business. The answer is in affirmative.
The questions are not regarding looking for Chinese manufacturers but also for selling products and services in China. These questions are asked by people residing in China and also from outside. The rules and regulations pertaining to this are complicated and that is where the tension arises from. The fact is that, American companies are exploring the Chinese market in the current times and earning profit. There are various types of foreign companies exploring the market. They are:
- The foreign companies providing high end remote medical testing. The testing equipment are sold to hospitals and they control the system from their headquarter outside China.
- There are companies providing movie services to the leading Chinese movie companies. It does not set up office in China but remotely administers it from the headquarter.
- Online learning service providers from all around the world to the Chinese companies. These typically work with Chinese companies that hold the ICP license. Sometimes these companies do set up branches in China to work from within the market.
- There are foreign companies selling enterprise software to Chinese firms. Some of these companies work remotely while others establish branches in China.
- Luxury service providers from foreign market to the Chinese people. These do not set up offices in China, but fly for a couple of days or months to begin with the services and maintain the clientele.
All these companies are looking to derive profit by selling their products and services to the Chinese people. However, they have to face challenges which are completely different from the one they face in other countries. Also those are totally of a different capacity to what is faced during looking for manufacturers in China.
Selling enterprise level software to Chinese hospitals is not free from hassles. The buying company should have a good agreement in place which protects its IP along with good quality widgets and arrival on time. However, the seller needs to deal with all the troubles related to the Chinese laws. The company should establish a WFOE to be able to operate in China and then comply with Chinese employment laws, antitrust laws and anti-corruption laws. Any China law firm deals with inquiries regarding anti-corruption laws in China and the queries have doubled up with passing time. The Chinese lawyers have to work very hard and be careful in incorporating terms and conditions that prevent their clients from going to jail in both countries rather than making sure a shipment reaches on time.
Companies selling luxury products in China are faced with varied problems. There are various problems from a business perspective. Normally, the sellers are at risk much more than the buyers. The premium luxury market has slowed down and this trend still continues in 2017. this is particularly true for those companies which depend on gifting. However, it is not totally disappointing and bleak. Companies can invest in China for luxury brands in the long term. Here is why:
- Luxury purchases will continue to increase in China with the economy performing better in the coming days.
- Urbanization is an interesting and significant point. This has given rise to the upper and middle class which buys these products to a large extent. The Tier 2,3,4, and 5 cities are expanding where people will require luxury products to live. This will give rise to around 300 million new luxury product buyers.
- Government policy and current affairs are fluid in China and with the sorting of legal and illegal businesses the exigency will pass.
- The accessible luxury market is all set to develop and prosper.
By taking a thorough look at the situation, it can be safely said that opportunities to make money in China is growing and it will continue to develop in another 10 years time. But selling into China is not similar to purchasing from China. The business organization from both the parts of the world are functioning in different ways than they used to even a couple of years back. Their business relationships are becoming more complicated and the competition is ever increasing. Whatever, it is China becoming a source of earning money is quite significant considering they have a huge consumer base.