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 in mind, with booming economic conditions, the temptation to do business with the doing business in china is 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 get you stated.
Conduct a total and Thorough Risk Analysis. It’s amazing how many companies forget to conduct some planning before they come across trouble. Risk analysis is tough in China although not impossible, you need to depend on a lot more than local media and representatives from the firm (and native government) to comprehend the marketplace position of your own prospective partners. Your industry body and or your chamber of commerce will certainly be a good aid in learning more, or you could engage a professional consultancy to do the digging to suit your needs.
Prior to deciding to enter into a relationship determine how much risk you are able to bear and if the offer exceeds that threshold – move on. If you have a danger management insurance policy for other countries you ought to apply the exact same high standards to dealing in China and never lower them since you are salivating at the idea of higher profits.
Develop a Problem Prevention Culture. Along with filling in lots of beautiful balance sheet predictions at the start of the project, spend time planning around conditions that may arise during the course of things.
Create a full set of contingency plans for every single eventuality including practical solutions to be utilized for workarounds. Make sure you have set milestones for each and every stage in the project, as well as an exit technique for every spot in that plan too even though you don’t want to utilize one.
Remember that business in China relies around personal relationships and china trademark registration may mislead as well as outright lie to you personally if there is another personal relationship (away from yours) that could be damaged through the truth.
Many Chinese companies are also not unconstrained entities as they are within the West and local political issues could have a significant influence on their ability to do business with foreign organisations. This might be tough to gain visibility of and enquiries in to what’s happening could be brushed off, particularly if you have any “loss in face” associated with keeping you in the picture.
Ideally you should develop contacts and relationships in local government and central government who could possibly intercede as your representative if things look to be progressing towards failure.
The complexity of the business culture in China means you need to take more time and effort understanding working practices before you move into partnership and it also makes a risk management strategy an essential part of managing relationships successfully.
Obviously there are exceptions to the rule, and i also claim that when you do look for a long-term mentality supplier or partner, adhere to him, he can save you lots of time, effort and money.
You ought to hence, realise because you have to also have a range of potential suppliers and “friends” to change to if your service you obtain does decrease. Many foreigners just feel that they hit the jac.kpot once they fjhflj one deal plus they just relax and expect a level of service like they receive within their country without realising that this supplier will in most cases look first on the document translation to chinese he will make in this deal as opposed to during the duration of the connection.
The meaning 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 the a top quality in china, that the word itself has lost its meaning. As Timothy Ferris says in the book “the four hour workweek”, the better you use anything, the greater it looses its meaning.