Doing Business In China

Doing business in China has enormous potential for profit. The country is the largest in the world with a potential consumer market of about 2 billion people. Up until the last couple years the market was mostly closed due to the governments policy of extreme isolation and protectionism. However, the government has begun to adopt a much more open stance with free trade and foreign investment now becoming such huge issues in the global business scene. With this openness there has been an explosion of business and investment in china's businesses and markets. Large scale telecommunications industries are currently laying the foundations for a highly advance intercity fiber optic system and there are currently plans by some of the larger wireless companies to begin an exploitation of this otherwise untapped market.

However, China still practices strong of protectionism for certain markets. These are industries that obviously China is attempting to make more competitive in the global market. The industries with strong protection in place include chemical production, automobile manufacture and construction materials production. In addition, problem with doing business in China involves the rampant government corruption. Due to a largely ineffective system of checks and balances most business find it almost impossible to do anything in China without greasing the palm of somebody important. Also, getting red tape cleared and fighting through bureaucracy is more dependant on who you know than what you know. Another issue with the Chinese government is the ever-present danger of expropriation. The laws of the Chinese government still do not give much protection to property owners or businesses.

In short, anyone wishing to do business in China should be aware of both the huge potential for profit and the huge potential for loss in an economy that is still for the most part untried and unsafe for foreign investors.