FREQUENT CHALLENGES THAT OVERSEAS COMPANIES FACE:
(1) UNDERSTANDING THE CHINESE CUSTOMER OR PARTNER.
The Chinese customer here can mean the consumers or even firms and industries. A foreign business’ marketing and business strategy employed successfully elsewhere may not necessarily meet with the same success in China. Please see the summary of our services below on how we can help you better understand the Chinese customer.
(2) PROCEDURES OF DOING BUSINESS.
An important conclusion is that foreign companies have come to accept that the Chinese have a different way of doing business. However they do not yet necessarily understand the Chinese custom and methods of conducting business. Hence a frequently cited problem faced by foreign companies is in finding high caliber management who are able to navigate through the complexities of doing business in China. Pineal Consulting Group business management as well as implementation services is able to provide full support to you on this issue. Examples of the issues that some foreign companies face here in China range from which Ministries to contact, what procedures to follow, what agreements are needed and with which counter-parties. Also equally important is having the right relationships, which are needed to smooth out bureaucratic and business procedures. The same issues are in State Own Enterprises (SOE) when you doing business with them.
(3) HIDDEN COST OF DOING BUSINESS.
Frequently, foreign investors underestimate the costs of doing business here in China and end up running hugely over budget. This stems mainly from a few factors related to insufficient knowledge of China’s unique way of doing business:
Insufficient knowledge about pricing, actual cost of goods and services, as well as the - magnitude and the flexibility of negotiation
Underestimation of labor, storage and transportation costs
Insufficient provision of loss stemming from delays or inefficiencies along the chain
Lack of proper due diligence
Insufficient knowledge of the procedures of running a business in China
We offer a complete investment risk analysis service, using our expertise in doing business in China to help you better understand the costs and benefits of any investment decision.
(4) UNCERTAIN ECONOMIC / POLITICAL ENVIRONMENT.
Economic management and governance are substantial factors in attracting foreign investment. However the business sector and the government do not always have a clear understanding of each other’s methods and objectives. It is important that the business community has confidence in the government’s management of the economy to promote long-term economic growth and stability. It is also equally vital for any foreign venture’s success that it meets with the authority’s full support. However foreign investors have sometimes found the Chinese-style of economic management and policy-making unfamiliar, leading to much more caution when making investment decisions. We aim to provide avenues of communication between our client and the relevant authorities to better mitigate this. We organize exclusive events that create opportunities for dialogue between our clients and relevant government agencies to develop a deeper understanding between the two parties. We also aim to provide key state and local government support to our clients’ businesses and elaborate more on this.
(5) TRANSPARENCY AND ACCOUNTABILITY.
Local Chinese companies do not always hold similar standards of transparency and accountability as their foreign counterparts. Hence before undertaking a partnership with a local company, proper due diligence is of utmost importance to avoid any future issues arising from a lack of transparency and accountability.