China Represents The Biggest Opportunities for the Foreign Brands

“Europe’s mired in mud. The U.S. economy’s flat. So where’s the action? It’s in China,” says Robert Collins, co-author of Doing Business in China for Dummies. Each of the potential Chinese business models accepted by the People’s Republic of China (PRC) has its distinct advantages. This signifies that even small obscure markets, or special niche products that would find the US and European market a tough battleground would find the Chinese market highly conducive.

China is the most successful communist country on the planet where thousands of foreign companies have written their success story by serving to a customer base over a billion people. This second largest economy of the world is accommodating, with more markets, industries and niches and there is no reason for you not to join these bandwagon. The Chinese (consumer) market is large and growing. According to the Chinese business lawyers, this means that entrepreneurs have possibilities to scale their business. During the last quarter-century, China has transposed to a more market-friendly economy that has a fast-growing private sector.

Reforms taken by Xi Jinping– After taking office, President Xi Jinping has vigorously pursued what he has called a “great rejuvenation of the Chinese nation” with his China Dream vision. Under him, China has enacted economic reform to combat slowing growth, such as cutting down bloated state-owned industries and reducing pollution, as well as its One Belt One Road trade project. Xi’s policies have changed the country in various ways, his anti-corruption campaigns, making this country more favorable for foreign investment by cutting the red tape and boosting China’s image as the finest place for doing business are the key factors for China’s stupendous growth.

Second-largest consumer market in the world- China’s overall economic growth is slowing, but the Chinese consumer economy is still massive in absolute terms and poised for increasing growth. China’s government is committed to transitioning the country’s economy from an investment-led to consumption-led. The country will see nearly $2 trillion in new consumption by 2021—about 27% of the total consumption growth that will occur in major economies during that time. It is a very particular advantage that the Chinese market has; because of China’s enormous manufacturing dominance, business has room to grow more than in many other countries. In the view of the most Chinese business lawyers, China thus represents one of the biggest opportunities for consumer companies in the world for the foreseeable future.

Skilled workforce- China’s growing skilled population is undoubtedly an asset for the country. High-skilled workers usually refer to those who grasp expertise or sophisticated skills in a certain area. China aims to expand its high-skilled workers to 39 million by 2020. As a foreign investor, you can be rest assured that there will be no shortage of qualified professionals in China and you don’t need to hire high-salaried professionals from other countries for your operations in this country.

Tremendous opportunity for small business– Chinese consumers are open to creating new relationships with worldwide brands. It’s a tremendous opportunity for a small business to get in early on the Chinese consumer’s brand affinity cycle and create strong relationships. With China’s rapid development and growth. Government rules, regulation, and laws have open new and easy ways for market entry for foreign companies. Today, China accounts for more than half of all global shopping center development, and it is considered to be one of the top market fo retail space constructions.

It has been suggested by the Chinese business lawyers, the rapid development of China’s economy has resulted in the tremendous increase in the average household income and more and more Chinese citizens are entering into the middle class category. In recent years, top fashion brands are enjoying greater success with the younger generation of wealthy Chinese. Undoubtedly, China has emerged as the best country in the planet for doing business.

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Pros & Cons of Framing a Deadline Deal with a Chinese Company

Foreign businesses need to keep in mind that, at the time of negotiating contract with a Chinese manufacturer, maintaining deadline can be advantageous as well as risky. Most of the Chinese business lawyers are of the view that the risk in framing a deadline deal is, by working with the overseas clients for many years, Chinese firms have acquired the art of manipulating deadline to their advantage.

Here we are offering you the pros and cons of framing deadline with a Chinese company

Pros- In the cases where the Chinese party needs to make a payment for buying an offshore asset, they intentionally make delay in making the final decision. Tighten them up with a deadline could prove valuable to restrain them from intentionally delaying it.

Cons- The down side is when the money is flowing in the other direction, the Chinese side will often impose an artificial deadline unrelated to the actual deal.

Pros- If the Chinese side has agreed upon a deal to complete a project within the stipulated deadline, financially it is a great sign for you as a foreign company. Apart from this you could also walk out from the deal by citing the excuse that the Chinese company failed to maintain deadline.

Cons- The risk is as it is said earlier that Chinese companies can manipulate the deadline that may go against you.

There three standard programs Chinese companies use for manipulating deadline, take a look at them-

  • First- It is usually the overseas company that submits the initial draft of the contract not the Chinese because it would require the Chinese company to “tip their hand”. The overseas company’s assumption is one month is enough to work out all the deals but still they don’t receive any type of acknowledgment of receipt. When they contact with their Chinese counterpart, they assure the foreign firms that it did a quick review and everything looks okay.
  • Second- It is the one week prior the deadline, the Chinese firm will send its comments on the draft agreement with two to three alteration proposals. According to the Chinese business lawyers these proposed changes are tricks designed to make the contract completely unenforceable against the Chinese side.
  • Third- The last stage is, the Chinese party will return the contract four days before with extensive revisions throughout the entire document, usually with no deadline of the revisions. The overseas companies fall prey to the trap set up by the Chinese company and they are forced to do two things
    1. The foreign company will have to make concessions just to get the document signed
    2. The foreign side will make drafting mistakes due to the short timeline and the need to work in two or more languages. The Chinese side will then ruthlessly take advantage of those mistakes at a later date.

Any foreign firm eager to do business with the Chinese party needs to aware of all the loopholes and traps laid by the Chinese company.

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