Whether it be the large Western multinationals with an established China presence or the first-time market entrant with no previous China experience, foreign companies of all shapes and sizes often find their China success stymied through insufficient lack of local understanding.
In recent years, the prevailing wisdom among foreign enterprises has been to focus predominantly on China’s Tier 1 cities (i.e. Shanghai, Beijing and Guangzhou)
Understanding government policy and regulations is critical to success in Chinese b2b markets.
Whichever market entry mode is chosen, thorough market research should precede any final decision on how and when to enter the market.
Very often, the enterprise type will determine the human resources available, and foreign companies tend to have greater freedom with WFOEs and rep offices than JVs in this respect.
Whether hiring staff, investing in a joint venture or appointing a local distributor, carrying out due diligence is also an indispensable activity when setting up in China for the first time.
In recent years, there is a clear trend of capital market open-up acceleration and a variety of schemes/channels have been adopted to facilitate overseas investors to access China equity, bond and other markets.
China’s employment system is much different than that of the Western countries.