PERSPECTIVE FOR BUSINESS SUCCESS IN CHINA A SHORT TUTORIAL by John R. Choate

Symbol of a new Gold Rush?

Department Of Commerce (DOC) 2003 FACT: 50% of U.S. Companies in China end up in dispute due to not doing research on business and culture

PROBLEMS (Categories) Lack of Predictability in business environment Lack of Predictability in business environment Government tends to be Mercantilist and Protectionist Government tends to be Mercantilist and Protectionist Planned Economy Remnants Planned Economy Remnants Foreign businesses see “A HUGE NEW MARKET “ Foreign businesses see “A HUGE NEW MARKET “

KEY ASSUMPTIONS Economy will grow, but slower than in the past U.S./China Relationship is Up and Down Collective, Conservative Leadership that pursues Economic Liberalization WTO opens markets, but not quick changes WTO generates market interest

TIPS FOR SUCCESS !!!  Have clear written contract terms – DO NOT engage without sound legal International advice  Make certain the project is economically viable  Make sure you know the partner and/or players  Make sure you get paid, terms, and method  DO NOT enter into prohibited agreements (Foreign Corrupt Practices Act)

TIPS FOR SUCCESS !!!  Base your business on WTO compliance rules  Search for problems before they materialize  Do thorough Risk Analysis  Limit Exposure (Small project as prototype and learning)  Gauge Progress with key checkpoints and CRITICAL Business/Functional metrics!