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China Business Basics
The basics on doing business in China
I (and the other China lawyers at my firm) are always getting asked — both clients and by reporters — the “basics” of what businesses “need to know about doing business in China.” A couple years ago, I was interviewed for a China Business article, entitled, The Troubleshooter, in which I discussed some of the basics of doing business in China. That article concisely gives some of the flavor of what it is like to do business in China, while also concisely setting forth some of the basics for doing so. The below are what I see as the highlights from that interview, but I urge you to go here and read the whole thing.
What assumptions do you want to debunk about how things actually work in China? The most important thing to know about China is that it has sophisticated laws and those laws are enforced.
Is there really such a thing as a “Chinese business culture”? There is. But like any business culture it isn’t universal and it isn’t immutable. If I had to pick one thing to define it, it would be a desire to get the deal done. Chinese businesspeople are more concerned about getting a deal done than they are about cultural niceties.
What are some of the thorniest problems you’ve solved for clients in China? Getting people out of China who are being held there against their will for allegedly having failed to pay debts. This sort of thing happens all the time.
What are the most important pointers/reminders you share for those who want to protect their Intellectual Property? One, Get a good partner that makes sense for you because IP (Intellectual Property) theft is much less likely to happen within a good relationship. Two, get a good contract (in Chinese) with your good partner so that you have a good road map on where your relationship should go. This minimizes future problems. Three, do whatever you can to protect your IP outside of anything legal. It might be as simple as bringing in last year’s model to China. Four, register your IP in China because if you don’t register it, you can’t really protect it if it gets taken.
How should a foreign business court good relations with Chinese government officials? The most basic advice here is to simply try. Go introduce yourself now, not when you have a problem. Let them know what you are doing and ask them how they feel about it. Do NOT bribe.
You once wrote, “The [Chinese] government is much more concerned with social harmony than it is with economic numbers.” Can you cite examples where you saw this in action? Try registering a high pollution foreign business in China today. That will prove this axiom right off the bat.
What has Apple done right in China? A lot. Starting with it simply being Apple in China. Many years ago, when Apple first arrived in China, a number of pundits were criticizing it for not being Chinese enough. They were saying that Apple needed to change its product and/or reduce its cost. Apple did the opposite. It kept its product and prices the same and by doing so it maintained its reputation worldwide. If Apple had made cheaper product and charged less in China, I am convinced that would have hurt its name, reputation, and business worldwide. You have to realize that there will always be pundits out there who criticize the big companies so as to try to convey that they know China business better than the big companies and therefore you should hire them as your business consultant.
What do you think?
The post China Business Basics appeared first on China Law Blog.
We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.
Source: http://www.chinalawblog.com/2015/07/china-business-and-blogging.html
