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BENCH handbook

This is the BENCH handbook for SME managers

Uuno Puus

on 13 March 2014

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Transcript of BENCH handbook

May 2010 - April 2013, useful information and advices for SME managers to start business in China
BENCH Handbook
Chinese business relationships are based on trust. For new players in Chinese market, initial trust can be build up via recommendations. Also to avoid unnecessary risks, it is wise to choose certain organizations to help you to enter China. However, not all the service organizations could provide support according to your specific needs, and not all the needs can be outsourced from those organizations. The company itself sometimes has to take the actions. Hence, in this chapter, we explain the functions of the support organizations, as well as illustrate how to get support from your own countryman in China. Besides this, you may see a list of support organizations, through which you may get necessary consultation.
4. Who can help?
5. Industry case studies
13. People and Business culture
As one of the oldest nation on the planet, China has its own unique and deep business culture. For a better understanding, negotiation and communication, we have to be familiar with those culture elements and adapt them into our business practices in China. Hence, in this chapter you will find out the major business culture differences between East (China) and West (Central Baltic Region), role of guanxi (connections), way of giving face and negotiations styles and so on.
3. General Overview of Doing Business in China
Doing business in China is like climbing the China’s Great Wall, in order to find the right entrance from the defense tower; the player needs to have a clear overview of what is behind the wall. In this chapter, we give a general overview of Chinese market; illustrate its opportunities and risks and briefly presents the market entry strategies.
2.Critical checklist for going to Chinese market
Enter Chinese market can be succeed via different operation modes, and the entry modes also depend on firm’s internal factors such as size, financial capability, foreign market experiential knowledge, etc; and it is also influenced by external factors such as policy, government, political issues, etc. However, there are some common terms and conditions need to be well prepared and checked before enter the Chinese market. In this chapter, firms will find the critical checklist for initially entering Chinese market.
To enter China does not necessarily mean enter whole China. To have a successful internationalization processes in Chinese market, a firm usually shall choose one region to start, and then expand to other parts of China. One of the example is Jiangsu province, in which has a population of over 78 million and GDP over 750 billion USD. Jiangsu itself is a big enough market for European SMEs to grow, and inside of the provinces there are also regional differences in terms of policy, consumer behavior, advanced sectors and so on. Therefore, in this chapter, we shall present few major cities of Jiangsu province, which can be your choice of start point.
6. Regions and Sectors in Jiangsu province
Through the in-depth case studies, this chapter aims to illustrate practical issues in terms of doing business in China and attracting Chinese overseas investments. The qualitative methods shall help the entrepreneur to have a better understanding from other firms’ performances and experiences.
1. How to know that Chinese market is for my company?
To most of SMEs in the Central Baltic region (Sweden, Finland, Estonia), China is considered as a far away country with its unique opportunities and risks. Meanwhile, as a leading emerging market, China is a popular destination for global players. However, how a firm to know that Chinese market is suitable for its expansion? In this chapter, we generally illustrate how to evaluate your company’s completeness and risk factors towards Chinese market, so that you could realize when to enter Chinese market.
In this chapter, the basic business advices are given that focusing on how to choose the suitable structure for Chinese market, as well as how to prepare for intellectual property rights issues and suggestions on managing supply chains in China.
7. Basic Business Advisory
Chinese market entry needs narrow down to specific sectors, each sector enjoys various policies and supports, as well as facing limits and controls from Chinese central and local governments. In this chapter, the selected sectors such as environmental infrastructure, logistics, tourism, healthcare, energy and power, food and beverages, machine tools, chemicals and luxury goods industries will be introduced.
8. Sector Opportunities
An efficient marketing strategy in China needs take into account the regional differences of Chinese domestic market. From Beijing to Hong Kong, from Shanghai to Urumqi, consumers drive very differently by the promotions. Also, look into the wealth structure of Chinese consumers, in which 450 million middle classes may be targeted as the marketing focus, considering their strong purchasing capability. Hence, this chapter introduces the marketing techniques for doing business in Chinese market.
Geographically, China is the world 3rd largest country. How to arrange logistics effectively from provinces to provinces and from cities to cities are directly influence the business performance speed, the cost and even may determine the success of the sales. This chapter aims to introduce the development of logistics in China; explain the Chinese logistic infrastructure, network and its management. It also illustrates the development of sales channels in China and the range of sales channels.
Chinese central government opened its market and economy few decades ago. Chinese enterprises’ business modes present special characteristics that are under the Maoism and (post) Dengism. Also, the large-scale operations on reforming the state owned enterprises have focused many firms changed their operation modes in China. In this chapter, the major business modes such as RO, JV, WFOE, etc will be presented.
In order to win the game, knowing the rule of the game is truly necessary. Even though China is a member of WTO and many other organizations, it is still remains many areas which may cause potential problems. Knowing Chinese legal system, it’s legislation and pragmatism is a recommended step of preparation. Also, understand the meaning of “one law, different interpretations” may help the firm to avoid unnecessary lost and be flexible to gain maximum benefits legally. All the above-mentioned issues will be introduced in this chapter.
9. Marketing in China
10. Logistics and retail
11. Business modes in China
12. Law: other aspects beyond IPR
One of the main characteristics of emerging market is that the political influence matters are as much as economic ones. Chinese market environment effects by the central government’s policies. The 12th Five Years Agenda shows the strong interests of central government on high-tech, green tech and sustainable development. To fast solve problems and grow business smoothly in China, a company shall understand the China’s multi-leveling and bureaucracy, and understand correctly the role of “guanxi” in the business development in China. This chapter covers the topics of Chinese governmental structure, the Chinese Communist Party, the multi-leveling and bureaucracy, the guanxi with government and the national and international policies.
To combine all the quality existing resources of learning doing business in China, this chapter lists numbers of books and online materials that helps firms and entrepreneurs to have deeper and further understanding of doing business in China.
14. Policy
15. Selection of reading materials
Starting a Business in China: Q&A By Understanding China, 2011
To Learn About China, See It. By Harold L. Sirkin, 2013
My First Day in Chinese Company, My First Day as Entrepreneur. By Shlomo Freund, 2012
What the West Doesn’t Get About China By George Stalk and David Michael, 2011
Doing Business in China: A Checklist of Legal Issues, by Xiaolin Zhou, 2003
Kicking A China Business’ Tires -The Checklist, by Chris Devonshire-Ellis, 2011
Doing Business in China For Dummies,
by Robert Collins, Carson Block, 2007
Doing Business In China By Checklist Management
by Dan Harris, 2006
CHECKLIST: Are You Ready To Expand Your Business To China? by Anthony Goh and Sarah Burnham, 2011
Checklist: Doing Business in China, by William J. Calore, 2004
Ease of Doing Business in China.
By Doing Business, 2013 http://bit.ly/hndbook_3_dng_bus
Doing Business In China.
By IPO PANG P.C., 2012
Doing business in China: Five tips for success.
By Teo Kermeliotis, 2011
By Kwintessential Ltd, 2012
The Ten Principles For Doing Business In China.
By Zoe McKay, 2012
List of supporting organizations.
By EU SME Center
EU SME Center in Beijing, website
Challenges of Doing Business in China: Case studies for SME-s.
By Patrick Lambe and Edgar Tan, 2003
Doing Business in China Case Study - Camellia Universal Ltd.
By Camellia Universal Ltd, 2010
Nordic fashion to Chineses
Manufacturing in half a year.
Not looking for the cheapest
Competitive all over
We took a plane
Jiangsu province map
Jiangsu Government Official Site
Analyzing regional industrialization in Jiangsu province.
By Yefang Huang and Yee Leung, 2001
Regional Inequality in China: A Case Study of Jiangsu Province
By Yehua Dennis Wei and C. Cindy Fan, 2000
Taicang Economic Development Area of Jiangsu Province
China: Economic Development in Jiangsu Province. By World Bank, 1991
Intellectual Property Right Protection and Development in Jiangsu Province, Zhejiang Province and Shanghai. By Shanghai Information Center for International Visitors (SICIV), 2012
Department of Commerce of Jiangsu Province
Facts about national 12th FYP for Environmental Protection in Jiangsu province
* 12th FYP for Environmental Protection says, that 3922 dispersed sewage treatment facilities will be built in 300 towns and 2666 villages of Jiangsu
* By 2015, Jiangsu will take a leading position in establishing a complete system for straw collection, storage and transportation. The utilization rate of straw will be over 90%.
* The International Environmental Development Centre of Jiangsu Environmental Protection Department confirmed that soil remediation is one of the areas they are interested in
* Contacts the International Environmental Development Centre of Jiangsu Environmental Protection Department:
- Contact person: Mr Zhihong CAO, Chief Engineer
- Email: cao.zh@163.com
- Phone: 0086 25 83701608
Top Tips on Chinese Business Attitudes and Doing Business in China.
By CDA Media, 2012
Practical advice for doing business in China.
By Andrew Terry, 2011
China - Information and Communication Technologies (ICT) Market Update.
By The Canadian Trade Commissioner Service, 2012
China's ICT Industry: Current State and Future Direction. By Jamie Popkin, 2006
Doing ICT Business in China. By Global Solutions MALAYSIA, 2012
Growing markets drive new generation of high-tech entrepreneurs in China. By Riva Gold, 2013
Growing a high-tech business in China. By JAMES BASH, 2003
How foreign companies can compete in China's high-tech market. By Ingo Beyer von Morgenstern, 2006
The Biggest Mistakes Most U.S. Marketers Make In China-And How Some Are Learning From ThemBy On Marketing, 2013
Internet Marketing In China. By Dan Vassiliou, 2013
Logistics in China: Thinking ahead. By Bill Fu, Brooks, A. Bentz, and Mark T. McCalla, 2011
Logistics Management in China: Barrier-hurdling and the Outlook for Legal Solutions. By Felix W.H. Chan, 2001
The Logistics of Doing Business in China. By Rick Moradian, 2010
Logistics barriers for multinational corporations doing business in China. By Luo, Manqin, 2004
Business model for international sourcing: Case China. By Tuomas Patto, 2009
Inside Chinese Business
IPR in China
Protecting Intellectual Property Rights In China.
By Jack Perkowski, 2012
Best Practices: Intellectual Property Protection in China. By the US-China Business Council, 2009
Protecting intellectual property in China Litigation is no substitute for strategy. By Meagan C. Dietz, Sarena Shao-Tin Lin, and Lei Yang, 2005
Intellectual property in China Still murky. Is the Middle Kingdom getting serious about protecting intellectual property? By Economist, 2012
Understanding China - Chinese Business Culture.
By Biao Wang, 2010
Doing Business in China: Chinese Social and Business Culture. By Communicaid Group Ltd., 2009
The Problem with China's Business Culture. By Zhixing Xiao, 2011
Business Etiquette in China. By The Canadian Trade Commissioner Service
Chinese Business Policies. By China Daily, 2013
Policy and Regulations on Foreign-funded Enterprises. By ChinaVista.com, 2010
Western business struggles to break Chinese barriers. By Richard Wray and Heather Stewart, 2010
Foreign companies in China sound off on business policies. By Keith B. Richburg, 2010
Eight priority key projects in which will be invested about 1.5 trillion RMB.

* Emission reduction projects.
* Environment projects for improving people’s livelihood.
* Rural environment projects.
* Ecological environment protection projects
* Nuclear and radiation safety projects.
* Environment infrastructure and public service projects.
* Environmental regulatory capacity building and personnel training projects.
Environmental protection and pollution control
Main indicators of environmental protection
Source: www.gov.cn
Harmless sludge disposal rate
Source: www.gov.cn
Doing business in the new China: a handbook and guide, by Birgit Zinzius, 2004
Beijing Jeep: A Case Study Of Western Business In China. By Jim Mann, 1997http://bit.ly/hndbook_5_wst_bus
The role of intellectual property in business model
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