Business Opportunities and Risks in China: Strategies and Recommendations from a European Perspective

Description

The rise of China poses a significant challenge to the existing, Western-dominated world economic order. The effectiveness of the Regional Comprehensive Economic Partnership (RCEP) is contingent on a smooth transition of the world’s economic center toward the Asia-Pacific Region. For Western investors, the vast market opportunities can be tempting. However, the lack of experience and knowledge of international management in China – a country with radically different business rules and cultural background – poses a substantial risk. This book provides comprehensive insights into the fast-changing business world in China. Based on the authors’ theoretical knowledge and invaluable years of practical experience, it discusses the various options for doing business in China, with current examples that demonstrate how European SMEs can successfully position themselves between multinational companies and local competitors. It also highlights new opportunities arising from China’s international involvement (New Silk Road, RCEP) and addresses risk management for European SMEs operating in China. Moreover, it sheds light on how to form relationships of mutual trust between Chinese policymakers and their advisors/cooperation partners from abroad. Readers with an interest in doing business in China will find this book particularly valuable. Preface Contents About the Authors List of Abbreviations List of Figures List of Tables 1: Introduction 2: General Information 2.1 Key Data 2.2 A Brief Introduction of the Chinese History 2.3 The Special Administrative Regions (SAR): Hong Kong and Macao 2.4 Taiwan 2.5 The Minorities 2.6 Religions 2.7 Exchange Rates and Inflation References 3: The Enormous Pace of Infrastructural Development 3.1 Structural Change: From International Aid Recipient to a High-Tech Nation 3.2 Made in China 2025 (MIC25) 3.3 State Regulations and State-Owned Enterprises (SOEs) 3.4 Transport and Telecommunication 3.5 Innovation Policy References 4: Internationalisation of China 4.1 Integration in Global Value Chain (GVC): Twenty Years of WTO 4.2 New Trends in China´s Opening-Up Policy 4.3 The New Silk Road 4.4 The RCEP Free-Trade Area 4.5 CPTPP and DEPA References 5: Energy Supply 5.1 Energy Dependency and Energy Policies 5.2 Energy Consumption and Environmental Protection 5.2.1 Total Consumption 5.2.2 Energy Sources 5.2.3 Carbon Trade 5.3 Fossil Energy 5.3.1 Coal 5.3.2 Oil and Gas 5.4 Electricity and Renewable Energies References 6: Market Opportunities 6.1 Overall Development of Chinese Economy 6.2 Foreign Trade 6.3 Consumer Market 6.3.1 Consumer Income and Consumption Expenditure 6.3.2 Retail Market: Market Size and Stability References 7: Economic Hubs 7.1 Major Economic Zones 7.1.1 Yangtze River Delta 7.1.2 Pearl River Delta Economic Zone 7.1.3 Bohai Economic Rim 7.2 Special Economic Zones and Free-Trade Zones 7.3 The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) 7.4 Case Study: A Bilateral Cooperation Attracting Foreign SME 7.4.1 Case Study: German Companies in Taicang References 8: Labour Market and Education 8.1 Development of Qualified Workforce 8.2 Education in China 8.2.1 The Education System 8.2.2 Higher Education 8.2.3 Vocational Training 8.2.4 Studying Abroad 8.3 Minimum Wage 8.4 Recruitment Websites in China References 9: Understanding the Chinese Culture 9.1 Culture Models in Cultural Research 9.2 VSM Model by Hofstede 9.2.1 Power Distance (pdi) 9.2.2 Individualism Vs. Collectivism (idv) 9.2.3 Masculinity Vs. Femininity (mas) 9.2.4 Uncertainty Avoidance (uai) 9.2.5 Long-Term Orientation (ltowvs) 9.2.6 Indulgence Vs. Restraint (ivr) 9.3 Cultural Dimensions According to E.T. Hall 9.3.1 Context Orientation 9.3.2 Monochronic Vs. Polychronic Understanding of Time 9.3.3 Understanding of Space 9.4 Cultural Diversity within China 9.5 Case Study: Finding the Right Sales Representative in Western China References 10: General Business Environment 10.1 Legal System of China 10.2 FIE Business Registration 10.3 Foreign Exchange Control 10.4 Negotiations in China 10.5 关Guānxì (Connection), Miànzi (Face) and Business Dinner References 11: Positioning in a Complex Market 11.1 Prosperity Gap Within China 11.2 Chinese and International Competitors 11.3 Niche Markets and Chances for International SMEs 11.4 Case Study: A German SME in the Chinese Medical Device Market References 12: Marketing Strategy in China 12.1 Direct Approaches to Sales in China 12.2 Sales via Chinese Distributors 12.3 Control by a Representative Office 12.4 Subsidiaries 12.5 Servicing Goods and Trade in Service 12.6 Manufacture in China References 13: Managing Global Supply Chain 13.1 Objectives of Supply Chain Management (SCM) 13.2 Global Supply Networks 13.3 Covid-19 Pandemic and Supply Chain Resilience 13.4 International Commercial Terms (Incoterms) 2020 13.5 Case Study: SHEIN´s Cross-Border Supply Chain References 14: Service Industry in China 14.1 Industry Sectors 14.2 Trends in China´s Service Sector 14.3 Case Study: Healthcare and Senior Citizen Care References 15: Sustainability Management 15.1 Corporate Social Responsibility (CSR) 15.2 Corporate Sustainability 15.3 SDG and ESG 15.4 ESG Practice in China References 16: Risk Management 16.1 Theoretical Approach of Risk Management 16.2 China´s Resilience in Multiple Crises 16.3 EU-China Relationship 16.4 Special Consideration: Taiwan, Hong Kong and Macao References 17: Institutional Supports for Commercial Activities 17.1 Organisations that Provide Assistance 17.1.1 Case Study: Consequences of Slow Decision-Making-A Factory for Infusion Solutions 17.1.2 International Organisations 17.1.3 Chambers of Commerce 17.1.4 Industry Associations 17.1.5 Regional Organisations 17.1.6 Sister Cities 17.1.7 Chinese Organisations 17.2 The Foreign Invested Industry´s Influence on Policymaking 17.3 Case Study: The European Union Chamber of Commerce in China References 18: Outlook