Whole Network Most Recent TOP10 Entrepreneurship Innovation Private Equity Venture Capital

 

China - A New Business' Best Friend, or Not?

Filed in archive Entrepreneurship by Greg Cruey on April 22, 2008

I came across a blog post by James McMullen back on February 16: China Is a Budding Business' Best Friend. I saved it. I intended to comment here on it, but I just never got around to it. Then a couple of weeks ago (April 6) I saw this piece by Mark Gilroy on the current state of the Chinese economy and it struck me that the two pieces provide an interesting contrast...

McMullen is almost bubbly in his excitement about the opportunities that China provides. And why not? The world's largest single market really is becoming more and more accessible at a time when its consumers are becoming increasingly affluent and increasingly interested in consumer goods. Sure, there's been some negative press over product recalls. Yes, America's attitude toward Chinese imports seems to be toughening. But McMullen's words ring true when he says that "...businesses wanting to make it with the big times are scrambling to file their paperwork and get their business relationship with China cemented."

Mark Gilroy's post is more analytical.

If you take your business to China, will you eat well or just become one of the courses on the menu...?
© clgregor


Gilroy begins by acknowledging that American firms trying to sell American products to Chinese consumers will find that the weak US dollar "should make buying U.S. products more attractive than ever" for the Chinese. He goes on, though, to say that "what U.S. businesses and consumers are really going to notice in the near and foreseeable future is that costs in China are on the raise and may increase at a more rapid pace."

Gilroy goes on to look at some reasons why the costs of doing business in China and the costs of Chinese exports to the US are going up - tax changes in China, employment law changes in China, the previously mentioned exchange rate, etc. And he examines each of those issues individually.

Gilroy's conclusions: "Two questions that I predict will become more acute for U.S. (and world) companies that do manufacturing in China in the days ahead will be: are we anticipating and ready for continued rising costs? and are the vendors we are currently relying on going to be in business for the foreseeable future?"

Gilroy says, in effect, to be alert; it's going to get harder to do business in China. McMullen says that if you're not there yet, the time is now! I don't guess I disagree with either of them. But they certainly provide a degree of contrast in their perspectives.

McMullen says "There is no doubt that China's economy will not only survive the recall related backlash but as a matter of fact it will most likely flourish!" And he's right, of course.

The question is, if you move into China, will your business survive and flourish with the Chinese economy? Even McMullen's optimism isn't completely unbridled: You will be wise to understand the tax codes, the expectations that the Chinese government will have of you...

Advertisement


Permalink: China - A New Business' Best Friend, or Not?
Tags: china  costs  taxes  exchange  rate  yuan    business  best+friend 

Trackback: http://www.creative-weblogging.com/cgi-bin/mt-tb.pl/113994



Advertisement


Advertisement


CW ToolbarInstall
RSSrss   | See all blog subscribe options
Googlegoogle   |   What is RSS?
Yahoo!yahoo
AddthisAddThis Feed Button
BloglinesBloglines
Newsletter
Advertisement - Book yours here.

Use our search feature to look for other interesting posts

Just this blog Whole network
  • ChinaVentureNews seeks news contributions



    If you are an analyst, tech company, private equity firm, service provider or entrepreneur with news to share related to China venture capital send us your relevant news release.

    CVN will post it to our site. We reserve the right to edit the copy because of space limitations, and to make summaries of the release when appropriate-- although a full copy of the release will always be linked to.

    Thank you!

    Please simply use our form here.
Advertisement -
Book yours here..


 
  • Would you like to have a new interactive marketing channel for your company? Learn more about Sponsored Blogs with Creative Weblogging. See how we helped companies like Weblin and cellity reach their goals.
  • Would you like to reach millions of blog readers every day? See you banner on hundreds of blogs with TierOneAds? Stay in control measuring conversion in real time. Register now.
  • Would you like to make more money blogging? Use TierOneAds a new platform that allows you as a blogger to set your prices per impression. Register now.
  • Do you have a blog with more than 50k page views from the US? Let us market your blog and earn great fix payments and bonuses.
  • Would you like to see your text link here? Let us know!
Advertisement
Book yours here.



  • Testimonials

  • 'Exactly what I am looking for.'

    "One of my favorite blogs."
  • Other blogs in the same channel in the Creative Weblogging Network

Advertisement -
Book yours here..






Advertisement - Book yours here..
 
Tagcloud: Agreement Blogs Book review Commodities Conferences Entrepreneurship Incubators and Science Parks Information Sources Innovation Internet IPOs Law M&A Mergers and Acquisitions News Outsourcing Policy Private Equity Sovereign Wealth Funds Sponsored Post Stocks Studies Technology Report Treatment VC and PE: education and training Venture Capital Yuan Renminbi