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Giles Blackburne16 May 2013

Avoiding problems, mistakes and regrets in China

What kinds of Problems, Mistakes & Regrets?

• Lack of preparation and research

• Entering the market for the wrong reasons

• Choosing the wrong location

• Choosing the wrong structure

• Choosing the wrong partner

• Conveying the wrong message

• And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

http://www.eusmecentre.org.cn/

No excuse for not preparing well…..

www.cbbc.org

What kinds of Problems, Mistakes & Regrets?

• Lack of preparation and research

• Entering the market for the wrong reasons

• Choosing the wrong location

• Choosing the wrong structure

• Choosing the wrong partner

• Conveying the wrong message

• And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

Are you entering China for the right reasons?

• China is a large market………….

• China has low cost labour………..

• Not much competition for my product……

What kinds of Problems, Mistakes & Regrets?

• Lack of preparation and research

• Entering the market for the wrong reasons

• Choosing the wrong location

• Choosing the wrong structure

• Choosing the wrong partner

• Conveying the wrong message

• And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

Getting the location right…..

• Proximity to market

• Proximity to ports

• Proximity to raw materials

• Development Zones

• Coastal vs Inland

• Efficient infrastructure

• Cheap labour/educated labour

• Welcoming and flexible local government support

• Preferential policies and tax concessions?

Opportunities in cities you may not have heard of……

Sector: Advanced Engineering

Sector: ICT

What kinds of Problems, Mistakes & Regrets?

• Lack of preparation and research

• Entering the market for the wrong reasons

• Choosing the wrong location

• Choosing the wrong structure

• Choosing the wrong partner

• Conveying the wrong message

• And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

Choosing the right structure for you…..• Export• Agent/distributor• Representative office• Investment

Ownership:Joint venture

Wholly Foreign Owned EnterpriseActivity:

ManufacturingTradingConsultancy

• ‘Holding Company’; ‘Minimum Registered Capital’

• Is investment in your sector ‘encouraged, restricted, prohibited or permitted’.

• Chinese employment law

What kinds of Problems, Mistakes & Regrets?

• Lack of preparation and research

• Entering the market for the wrong reasons

• Choosing the wrong location

• Choosing the wrong structure

• Choosing the wrong partner

• Conveying the wrong message

• And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

Choosing the right partner….

• Considering the location of the partner and proximity to actual market opportunities

• Understanding the technical expertise already possessed by the Chinese partner

• Assessing the existing production and distribution capability of the partner

• Knowing the quality of the partner’s relationships with other players critical to success

• Understanding the objectives of the partner. Are they suitable?

• Knowing the background of the partner

What kinds of Problems, Mistakes & Regrets?

• Lack of preparation and research

• Entering the market for the wrong reasons

• Choosing the wrong location

• Choosing the wrong structure

• Choosing the wrong partner

• Conveying the wrong message

• And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

• Selecting a brand name that suggests something about the product benefits and product qualities and which does not carry poor meaning in Chinese

• Conveying your company background clearly and confidently in the appropriate language

• Communicating product benefits within the context of relevant government policies

• Keeping communication consistent and through the right people

• Consider adapting your offer or business model to suit the Chinese market

Conveying the right message

What kinds of Problems, Mistakes & Regrets?

• Lack of preparation and research

• Entering the market for the wrong reasons

• Choosing the wrong location

• Choosing the wrong structure

• Choosing the wrong partner

• Conveying the wrong message

• And more…not carrying out due diligence, not registering intellectual property, ignoring cultural differences

• Due diligence

• Registering intellectual property

• Protecting intellectual property

• Paying attention to cultural differences

Thank you!

谢谢