Doing business in China today is very different from what it was previously. In the last few years, China had become receptive to foreign investments. However, the pandemic has resulted in rising tensions between China and the world community and things have drastically changed again. .
China has always been a closed community shutting out the world from its country and its citizens. It is time they open up their economy and venture out onto foreign soils with their business ventures and also allow them to set up businesses in their country. Only then will there be a change in the current situation . I In the past, the Chinese government has allowed certain foreign investors to establish their business there while at times they have totally shut their doors.
Ushering In Change
China is a $10 trillion economy that is growing at a rate of 7% every year. So, here you can very well see the huge untapped potential of doing business in China. Some global business giants like the automotive equipment manufacturers have made a foray in China , but the same cannot be said about other sectors especially the service sectors .
The Most Vital Shaping Force In Doing Business In China
The most important source of growth for the Chinese economy today is their domestic consumption and focus on infrastructure. Whether their current economy will sustain or not remains to be seen. It all depends on how fast they evolve and adopt changes while at the same time opening up to the world .
The government is the most important factor that determines your doing business in China .
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Everything there depends on their government. They can give a boost to the economy or they can pull it down by controlling the GDP growth rates .
The main factor that is affecting business there is the marketization of the price of land, electricity, capital and water. It is impacting businesses and it needs to be seen how well they perform.
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. Private capital investment in state-owned business in China is very slow. The situation is no longer the same now. This is because the government is gradually opening up. Many non-core government-owned businesses like hotels and manufacturing businesses are being sold to private investors. With gradual easing of rules and a progression in the government mindset, doing business in China might just get easier in the years to come.
The Challenges Faced In Doing Business In China
There are several challenges in doing business in other countries. You have to follow stringently all the rules and regulations of that country. There are other challenges as well . I In doing business in China the main challenges are:
Access to the market
Preference of consumers
Challenges posed by the government
Right to intellectual property
Stiff competition from Chinese companies
Labour costs rising dramatically
Lack of trained and skilled labour in China
Laborious administrative processes acting as hurdles
However, in conclusion, it can be said that there is great potential in doing business in China today. The Chinese economy has gradually traansitioned from an era of growth at high speed to an era of growth with focus on quality. This transition process has has brought about cyclical changes and structural adjustments to their economy. Today the decrease in growth rate may act as a dampener but may prove to be a positive factor for foreign companies intending to do business there in the future.