Red China, Red Tape: How To Start A Business

Entering an untapped international market can strengthen a business tremendously—but what if the costs outweigh the benefits for the market itself? China has long been an important player on the global stage, but recent advances in manufacturing, natural resources, and energy production have catapulted the expansive country to the forefront of international trade. Currently the world’s fastest growing major economy, China is set to eclipse the United States as the world’s largest economy by 2016. Among various domestic and international plays, one of China’s most fascinating uses of its

At the time of development of globalization there were many concerns about its benefits. However, it has brought significant changes in all segments of human life and International business is one area in which it contributed heavily (Reich, 1998). Companies all over the world are currently formulating their business strategies mainly after considering the trends in global market instead of domestic market. Outsourcing and offshoring are some of the new business principles emerged in this world after the implementation of globalization (Samimi and Jentabad, 2014). The core of these new business concepts is to exploit the business opportunities in overseas countries as much as possible (Samimi and Jentabad, 2014).

The legal system is another issue to be considered when doing business in China because it is still viewed as being in a developing stage. Contracts, for example, are highly influenced by this difference. In the Chinese culture, contracts describe how relationships will be developed whereas in the United States, the contract is a binding agreement that spells out the specific terms, conditions and expectations from each party involved. As Company X pursues the possibility of expanding business to China, it must understand that the Chinese business culture does not place as much emphasis on the binding force of a written contract.

The following examines the nation of China and its trade relations with the world, particularly the United States. The focus is primarily on China’s culture and how it impacts business dealings with other countries. Areas examined include: Religion, Management Philosophy, and Business Etiquette. Also discussed is China’s growing status as a world super power and how that has impacted the global business landscape. Likewise, various trading partners are examined and the effects of doing business with China, specifically for the United States. Points of concern for the United States are things such as the

Off-shoring is the establishment of business operations outside national boundaries. The process of moving business outside these boundaries is to garner an advantage either through tax breaks, lower wages, lower transportation cost and/or relaxed regulations ("Offshore definition," 2014). Many firms either branch out as a horizontal multinational or vertical multinational. Horizontal multinational’s produce the same good or services as abroad. This foreign direct investment (FDI) is done to strategically place production closer to the target market. Doing this provides advantages surrounding transportation cost while enhancing learning associated with local needs. A vertical multinational is one that fragments a portion of its

The benefits brought by FDI to China are apparent. Economy is influenced by FDI in a number of ways. FDI involves transfer knowledge in the host country, which will create an increase on the existing stock of knowledge through labor training, the transfer of skills, and the transferring of new managerial and organizational experience. Also, it can help local corporations to access to advanced technology by capital accumulation in host countries (Mello, 1999 and Mello, 1997). Furthermore, FDI may allow China to develop in technology and knowledge which are not readily available locally, as a consequent increase productivity growth through the economy (Jose, 2003).

Offshoring has its advantages as well as it disadvantages, as most business decisions do. It is the weighing of those two leverages that make the debate of offshoring such a conflict. Offshoring reaps many benefits for companies. For starters, offshoring allows companies to stream their productions globally. With this they may then begin to cut cost of goods to a lower rate to increase the demand, a plus for both the company and it’s consumers. This investment also acquires new customers and even puts the companies into new market

The process of globalization has numerous significant effects on countries, organizations, and individuals. These effects can be observed in the quality of products, in their prices, but also in their availability. Because of globalization, numerous companies prefer to expand their business on international level. Some of them outsource some of their processes and activities to cheaper destinations that allow them to reduce their investments.

This proposal provides blueprint to any business that tries to take over other business in International market by providing importance of cultural adaption especially Guanxi or connections in Chinese Market by providing an example of how Hotel international failed in building Roaring Dragon Hotel reputation back by ignoring the importance of cultural adaption (Guanxi Connections in this case). In addition, business should implement new methodologies considering existing methodologies unlike redundancy of employees with Guanxi connections losing its base on which the company is built.

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

Throughout the 19th century, China’s leaders have been of older age until the Politburo standing Committee decided to search for intelligent and younger citizens to become the 4th generation of The Communist Party of China. Along with many others Hu Jintao was chosen to be one of the future leaders.

While there are many benefits to offshoring, it does have some disadvantages. One of the disadvantages of offshoring is the cultural and communication challenges. “Different cultures have different communication styles, different attitudes toward conflict resolution and simply different ways of getting work done” (Green, 2007). In different cultures words can mean something different. For example, “yes” in the United States means “beyond a doubt”, but in Japan they say “yes” when they really mean “no,” since “no” is disrespectful to say to anyone. Even though people at the offshore location can speak and understand English, there are still instances when getting the message across becomes difficult. Hence, companies must invest time and money into training employees about the cultural of the country to which the company is offshoring in order to avoid embarrassment for both the employee as well as the company.

In spite of business experiences in one's home nation, in China it is the precise "Guanxi" that creates all the variation to make sure that business will be flourishing (Douglas 1998). By receiving the right "Guanxi", the organization minimizes the risks, frustrations, and disappointments when doing production in China. Frequently it is by obtaining the accurate "Guanxi" with the pertinent authorities that will verify the aggressive repute of an association ultimately in China. And furthermore, the expected threats, blockades, and arrangements you will meet in China will be lessened when you have the accurate "Guanxi" network running for you. That is why the accurate "Guanxi" is very important to all flourishing business tactic in China.

In recent years, globalization has become one of the most popular term involving in many business articles and speeches. Globalization has brought both advantages and disadvantages to the world in many aspects, from economy to culture. Along with the trend is the expansion of multinational company. Nowadays, it is common to see a company with operations in many countries. In order to penetrate to a new country, every entrepreneur should have a SWOT analysis about the country to know about its strengths, weaknesses, opportunities and threats. The analysis will help the entrepreneur to find a proper strategy for the company to operate in the new country. This SWOT report will analyze the strengths, weaknesses, opportunities and threats of

According to the 2016 China fan report, since 2004, an average of 40 million new fans have been added every year, and the number of Chinese fans has reached 470 million by 2016 (Song, 2017). Especially, funs spend money to express their enthusiasm, which accounts for about $330 billion of fun consumption in the young generation, according to the monthly consumption of fans. (Song, 2017). Although in spite of the large population of China, these data also surprised. And as we know, this situation is not only appearing in China. Because of the develop of modern market, which have enough information and more convenient, fun business developed quickly and there was a group of people who made money by chasing stars (Rowan, 2012). As far as I