Lessons From Business in China

Authentic Chinese collectibles come from afar. They are carefully made by skilled artisans in the Far East, where all things begin. To appreciate the important work of the American importer of Oriental collections, it is helpful to be made aware of the challenge of doing business in the Middle Kingdom today. There has been much written about China in recent years. The stories of unlimited business opportunities are definitely over stated. China is a very unique country in comparison with the United States of America. However, there certainly are lucrative opportunities in China for the person who can use them prudently. In order for a person or company to take advantage of these opportunities, he or she will need to hurdle a gauntlet of obstacles first. More often than not, the typical American business person will not be prepared to do this.

Americans have been extremely enthusiastic about China within the past twenty years. This is likely due to the government’s eager thirst for foreign capital and technology. There is also 1.3 billion consumers in China. Therefore, thousands of American and other foreign firms have raced into the Chinese market. Unfortunately, many of them have not properly investigated the market situation over there. Without adequate preparation or expert advice, these companies and/or individuals have frequently entered into foolish business deals. The result of this is always lost time, lost opportunity, and lost money.

China has many advantages in manufacturing. The transportation and public-utilities infrastructure needed for manufacturing is being constructed very rapidly. Plus, the rate of literacy in China is higher than ever before. The government itself is friendly toward foreigners, especially American ones. It is a fact that China is the best manufacturing outsource destination in the world. It has become the leading producing nation as well. The costs of production for most products are quite lower than they are anywhere else. In addition, China’s vast labor pool costs a fraction of what America’s does. The ratio is actually about one-ninth!

Taxes in China are much less than they are in the United States. When a company or individual tries to do business in America, they are barraged with a number of hidden taxes on the federal, state, and local levels. However, the situation for business is very different in China. There is no sales tax. There is no gas tax. There is no utility tax. Corporate income taxes are much less in China. In some instances, with the application of tax credits for exportation, income taxes in China virtually vanish.

Despite these encouraging facts, the number one reason why it is so difficult to successfully manage a business venture in China is the problem of language and communication. In China the American business person will experience a strange environment with inadequate communication skills. There are a few places to find the right kind of help, and most will be without key contacts and friends. No doubt many people have heard stories about business people succeeding in China. Many of these amazing stories are true. However, many more people have failed and very few people ever succeed on the first attempt.

For these reasons, it pays to properly prepare before any one may attempt a business venture in China. The first hurdle is the language. Since Mandarin is the primary business language of the country, it would be necessary to have the best translator available. When one has the best contacts for the Chinese market, the possibility of success is far greater. Having a plan in place to deal with the many problems is foundational for the success of any foreign business coming in to China.

The important truths can help the Chinese American person appreciate the asset which a good importer brings. It takes years to establish reliable contacts in China. Authentic collections and other fine products are readily available to the business person who understands how to do business in China. An uninformed person can pay a lot of money directly to a company in China and still not get a truly fine piece of artwork. The art, culture, and products of China are on sale to the world today…. but it is always best to know who you are doing business with if you decide to buy directly from China. For this reason, a reliable importer is usually the safest and best option.