Doing Business In China
Author: Ching Mia Kuang
Publisher: John Wiley & Sons
NOBODY can expect to venture into a new country, set up shop and make profits without first studying the intricacies of doing business there, least of all, when the country is China.
China’s business environment is, after all, one of the most complex and competitive in the world.
There are constant changes in rules and regulations, while the enforcement procedures are vague, more often than not.
Things don’t get easier with the strong local government influence.
Enters a book about making things easier for the China novice. CFO Guide to Doing Business in China aims to alleviate the task of understanding the business environment of this Asian superpower by providing up-to-date and relevant information.
In the 205-pager, author Ching Mia Kuang, a China financial expert, addresses key aspects of doing business in China.
As the title suggests, the book is targeted at chief financial officers of companies, but anybody who has to negotiate the difficult business terrain in China can easily learn a thing or two as well.
It provides comprehensive overviews on the country’s business laws, accounting systems, taxation issues, labour regulations and risk management operations. These are areas that are often too complex to understand on one’s own.
Adding weight to the book are explanations of the various current business trends (such as mergers and acquisitions) relevant to the country and to the rest of the world.
There are also lots of valuable information, and facts and figures for the businessman in China, including tax rates of different countries and definitions of useful financial terms.
For the completely uninitiated, CFO Guide delves a little into the background of China as a country and traces the paths it took to become the major business domain that it is today.
It even touches on Chinese culture and beliefs, which makes a nice but relevant deviation from all the business talk.
One the best parts of the book is that it is interspersed with healthy doses of real-life case studies, which readers can draw upon for knowledge or even inspiration.
All in all, the concepts and explanations are presented clearly, albeit in a text-heavy format. The presentation could have been made more interesting with some colour pictures or illustrations instead of mere charts and tables, typical of business publications.
There are hordes of business books out there. So, if you have a good product, make it stand out, I always say.
This book offers a wealth of information. It is a great headstart for those who want to know more about doing business in China.
How do you start a business from scratch in China?
How do you close a business deal in China? You’ll find out after reading this book.
A new law aimed at keeping lead-tainted products from children is facing stiff opposition from business owners and charities that say it’ll put them out of business.
The law is part of the Consumer Product Safety Improvement Act of 2008. The bill was written in response to the rash of lead-tainted toys that came from China.
Some business owners said that despite the bill’s good intentions, it could have some far-reaching effects that lawmakers might not have foreseen.
"It’s devastating. When you read through the law, you think to yourself, “There is no way this can be for real,’" business owner Karyn Ranzau said.
Ranzau said that when the bill takes effect on Feb. 10, she will no longer be able to run the hair bow business she spent years building.
The law will make it illegal to sell items in consignment shops or second-hand stores that contain certain levels of lead. That includes toys, clothing and accessories like Ranzau's hair bows.
"I love the craft and I love being artistic and I have a lot of fun with it but it’s something we've come to depend on as a source of income," Ranzau said.
Consignment shop owner Shelly Briones said it would cost her tens of thousands of dollars to test her goods -- which would force her to close her doors for good.
"When people walk in and see some of the clothes I’ve been pulling off the racks they're like, ‘You've got to be kidding me? It’s a child’s rain coat. Why can’t you sell it?’" Briones said. "In today’s economy people need us more than ever. They need the consignment and thrift stores. They don’t have the money to buy new," Briones said.
Briones and Ranzau held a meeting Wednesday night to recruit others to do something about the law.
"We are doing everything we can to get a hold of people and spread the word because in a week it will be a felony charge to sell what I sell," Ranzau said. "I’m not saying, ‘Lets not keep kids safe.’ We are all for that but give us some direction. How do we test, how do we make this feasible."
A senator from South Carolina argued in favor of the business owners’ position in Congress on Wednesday. The senator is pushing for a year-long stay on the bill to enable legislators to take a second look at the bill.
Congress still has to vote on the measure.
Pasadena had their hands full with the Rose Bowl this weekend and the aftermath was apparent. But right across the street there was a buzz on the street as people milled about in anticipation of the New Year Spectacular.
Among the audience were many Chinese and American theater lovers, art fans, and local businessmen.
Mr. Van a local real estate executive commented on his experience with the Divine Performing Arts with,
“It’s a really terrific performance! We just got back from China and it’s very educational and inspiring,” he said.
“It’s traditional and very well done. I liked the last one about Tibet,” he said afterward.
During the hustle and bustle of the intermission, Frank R. took some time to comment on the show and said the performance was, “Fantastic and very impressive.”
“The first dance, the flower dance, was really nice. It was very good but I really liked that one. I went to China this past summer. So, I really like the Chinese culture and what they stand for,” he said.
Divine Performing Arts will be putting on over two hundred and sixty performances all over the globe and is making its way up the west coast, while two other groups are currently doing performances in Canada and New York.
The tour, scheduled next year for May 31-June 6, will be held in partnership with XMei International, a Walnut Creek, California-based firm that offers advisory services for companies doing business in China. The tour will connect participants with insurance executives, government officials, representatives of multinational companies and others who will provide information on doing business in China, and opportunities for those who can provide self-insurance services there, Simpsonville, South Carolina-based SIIA said in a statement.
The event follows SIIA’s first international conference held this summer in Barcelona, Spain. The group said it is planning additional international events.
“Through international exposure, SIIA has learned that there is a great global appetite for American-style self-insurance and alternative risk transfer,” SIIA President-Elect Armando Baez said in the statement. “This tour is another example of how SIIA will promote cross-currents of opportunity among our members and people we visit.”
Information is available at www.siia.org
Sometimes it’s not so much what you say but how you say it. It’s both, however, if you want to successfully deal with Chinese businesspeople. It’s saying the right things at the right time in the right order and with the right gifts. It’s about flexibility. Adaptability. From a Chinese perspective, it’s more about people than products. It’s culture.
That’s the advice Quanyu Huang was expected to deliver Nov. 13 at a seminar sponsored by the Ohio State University Chinese Flagship Program. The university brought Huang, director of the Confucious Institute at Miami University in Ohio and a specialist on Sino-American cultural and educational comparison, to campus to talk about doing business with China.
His appearance and subject came at a time when a faltering economy is working its way deeper into America’s fabric and many companies are looking for ways to survive.
Prior to the OSU event, Huang said Ohio companies do billions of dollars in trade with China annually, yet many of them and Western businesses are unsuccessful in China from a wholly Chinese perspective.
The N.B.A. and AEG will announce on Sunday plans to design and operate at least a dozen arenas in China, extending the league’s presence in its largest foreign market. The arenas could form the infrastructure of an N.B.A.-branded league in China.
Under their plan, the league and AEG will make modest cash investments in the arenas, but their expertise will give them substantial ownership stakes in the buildings.
The arenas are to be financed largely by local and provincial governments.
“We won’t do this without an economic return over time for AEG and the N.B.A.,” said Timothy J. Leiweke, the president and chief executive of AEG.
He and David Stern, the N.B.A. commissioner, will announce the joint venture before the Nets-Heat exhibition game at the O2 arena in London.
Stern said the league was looking to capitalize on a growing urban Chinese middle class with increasing disposal income.
“China is an enormous market with enormous potential, not only for basketball but for entertainment venues,” he said in an interview.
The league and AEG are partners in the Beijing arena where basketball was played at the Summer Olympics in August. They are looking at building arenas in major cities like Shanghai, Guangzhou and Shenzhen. The arenas will be designed to accommodate a broad range of uses beyond basketball.
“We see these venues as homes for basketball teams, hopefully, in a league that is a partnership between the N.B.A. and the China Basketball Association,” Stern said.
The arenas are envisioned as 19,000-seat facilities, some extravagant and some modest, that would be part of entertainment districts in some of the largest Chinese cities.
“Our issue is which 12 do we choose?” Leiweke said in an interview last week from Dubai. “I think we’ll have 30 or 40 of these opportunities, and 15 will make sense. Within a week, you’ll hear of some of the markets we’ll jump into.”
AEG, a subsidiary of the Anschutz Company, runs or owns more than 90 arenas and other facilities around the world, including Staples Center in Los Angeles, the O2 in London, the O2 World arena in Berlin and the Prudential Center in Newark.
Stern and Leiweke acknowledged the global credit crunch pushing world economies into a recession but said their arena-building goals were long-term.
“Projects like these are marathons, and whatever cycle we’re in, we’ll come out of it,” Leiweke said.
Stern said that Chinese officials had not yet shown skittishness at financing arenas in the face of the drastically altered world economy. Adam Silver, the N.B.A.’s deputy commissioner, said, “Hard assets like these in China might be good places for global investment.”
Although China has not been immune to the recession, “it has been one of the growth spots in the world economy,” said John Frisbie, the president of the United States-China Business Council, a nonprofit group that represents American companies doing business in China.
“The fundamentals of the Chinese economy seem good for U.S. companies,” he said.
Although the league expects slight growth in the United States this year, Silver said that it was looking for a 30 percent increase in revenue from China
“We’re taking advantage of the boom in basketball coming out of the Beijing,” he said, “Despite the terrible economy, the timing is good to make this announcement.”
The N.B.A.’s business interests in China have been growing for nearly 30 years. The league has 100 employees in four cities, and 15 marketing partners. A third of the online traffic to NBA.com comes from the Mandarin Chinese part of the site, and league merchandise is sold at 30,000 retailers in China, among them two NBA Stores.
In addition, N.B.A. games are available on 51 networks in China. where 1.6 billion viewers watched league programming last season. One of China’s leading exports, Yao Ming, is an All-Star center with the Houston Rockets, and Yi Jianlian, a 20-year-old forward, is seen as a liaison between the Nets and the region’s Chinese-American community.
Last year, the league created N.B.A. China, a subsidiary with five investors — the Walt Disney Company and four Chinese partners that paid $253 million. The league’s contribution to the arenas will come from that money.
“This is not only a content play, but a development, facility and real estate play,” Leiweke said. “The N.B.A. is thinking out of the box, beyond basketball. Its brand in China is amazing. If you go to China, you get an appreciation for what they’ve built.”
The league and AEG did not realize that they were each working separately on arena-development strategies until the Boston-Minnesota preseason game in London last October.
“We realized it made more sense for us to be partners,” Stern said.
There’s a good amount of scuttlebutt today on a report that highlights how the Chinese government is monitoring Skype traffic for keywords that may offend the Communist party.
The report in question (Techmeme), Breaching Trust: An analysis of surveillance and security practices on China’s Tom-Skype platform, details the activities of the Chinese government’s monitoring of Tom-Skype users. Tom Online and Skype have teamed up to offer a Chinese version of the messaging software in China.
The gist:
The full text chat messages of TOM-Skype users, along with Skype users who have communicated with TOM-Skype users, are regularly scanned for sensitive keywords, and if present, the resulting data are uploaded and stored on servers in China.
Here’s a look at the keywords China monitors:
china1.png
Meanwhile, personal information is stored on insecure systems and surveillance is based on keywords, but not entirely (user names may also be in play).
Koman: Chinese monitoring Tom-Skype messages
And eBay spokeswoman told the New York Times to talk to Tom Online about the security issues. There was no comment on the monitoring.
Yawn. Does this report surprise anyone? Here’s a headline that would be real news: China respects online privacy.
Sure, the monitoring stinks. But let’s get real here. China was monitoring taxi cab rides during the Olympics. So what’s the big deal if China checks Skype messages? Or your Web viewing habits? Or your personal data? Or anything else for that matter? China monitors your stuff. China doesn’t know the concept of privacy and it isn’t likely to care unless its people stand up and revolt–and they aren’t. If the biggest spotlight on the planet–the Olympics–isn’t going to put China on the good Internet behavior bandwagon it’s highly unlikely that a report by a group called Citizen Lab will.
And if you’re a U.S. vendor operating in China you try and straddle this line between our values and China’s. It doesn’t always work, but companies try to walk it anyway. Shareholders propose numerous human rights policies at their annual meetings with companies. Good luck with that folks.
In the end, it’s hardly shocking that China is reading Skype messages. It reads all of messages in the country. Privacy is the cost of doing business there. In an ideal world, that cost would be too high. But apparently the rewards eclipse the costs for now.
Larry DignanLarry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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