Political Realities

All Roads Lead to China noted a Forbes article on the politics of being in China.

The Article notes that there are more risks and more opportunities in China than in the West.  China is growing and maturing while the West is a relatively static and mature market.

The Article noted that China’s overall environment should be part of our calculus.

Political Stability-  China is stable but many people think political change must come in the 5 – 10 year window.  If you want to mess with that, then do not invest in business here.  That could happen and cause little or great short term impact and long term impact.  It did not harm business in Taiwan when the politics rolled over in the 90’s.

Nationalism- I am hard pressed to say who is worse, USA or China. These are big countries and both are too nationalistic. It means we must be careful in speaking against either country if we want to work in them. Oh, And Mitt Romney should not dis the London Olympics while passing through either.

Unfair trade practices – China does limit industries. Most developing countries do.  We should not expect rapid new openings when the government feels nervous about popular support.  We should be thankful that insurance has more breathing room now.

IP protection – Follow the laws. Use proper wisdom in hiring, contracts, agreements, and partnering considering the environment here, and you will avoid large problems. Fail to, and you will pay.

Environmental Protection – China has environmental degradation which it is trying to get a handle on. Naturally, they will ask Western companies to hold to high and sometimes immature standards. We should not be surprised by this. Be prepared.

Legal system not Western in practice – Run your ship well and avoid need for the courts. However, China does have a running system. It is not like the West and takes some work to gain progress.  Really, be careful who you partner with and who you hire and do not cheat anyone thinking you can get away with it. Maybe not.

In China, 5000 years of practice outside our span means they have tons of ways that we do not understand. They are puzzled by us to. Work on it.  China is the great opportunity of the 21st century. It is worth the investment to do well.

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Posted in: China, Chinese Culture, Market Entry

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