Doing Business in China For Dummies (For Dummies (Business & Personal Finance))

387 Pages·2007·3.05 MB·English

by  Robert Collins

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Doing Business
in China
FOR
DUMmIES
‰
by Robert Collins, MBA,and Carson Block,Esq
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01_049297 ffirs.qxp 6/25/07 8:38 PM Page i
Doing Business
in China
FOR
DUMmIES
‰
by Robert Collins, MBA,and Carson Block,Esq
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Doing Business in China For Dummies®
Published by
Wiley Publishing, Inc.
111 River St.
Hoboken, NJ 07030-5774
www.wiley.com
Copyright © 2007 by Wiley Publishing, Inc., Indianapolis, Indiana
Published by Wiley Publishing, Inc., Indianapolis, Indiana
Published simultaneously in Canada
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About the Authors
Robert Collins, MBA,is a senior executive with a major Fortune 500 financial
services company. Rob is also a former senior consultant with a leading inter-
national business consulting firm. He has more than 20 years of commercial
and business development experience in international markets. Rob is an
active member of the Mayor of Chicago’s Shanghai Sister Cities’ Business
Committee.
Rob gained a strong understanding of Chinese business and management
while living and working in Beijing and Hong Kong, China, for more than 12
years. He managed one of the earliest representative offices in China. While
working there, Rob was an officer with the American Chamber of Commerce
in China.
Rob obtained a joint MBA degree from the Kellogg School of Management
at Northwestern University and the Hong Kong University of Science and
Technology.
Rob and his wife, Sarah, have three children and reside in suburban Chicago.
The family is active in supporting Chinese-related educational initiatives. The
Collins family has hosted numerous Chinese exchange students in Hong Kong
and the U.S.
You can e-mail Rob at [email protected].
Carson Block, Esq,is the founder and Managing Director of YBS Investment
Consulting, which is based in Singapore. In this role, Carson advises high net-
worth individuals and families on their investments. He also advises compa-
nies and investment firms on China-related investments. Prior to founding
YBS, Carson practiced law in Shanghai with Jones Day, a U.S.–based law firm.
In this role, he advised foreign clients on China foreign direct investment and
mergers and acquisitions. Before joining Jones Day, Carson was an equity
analyst and partner in W.A.B. Capital, a Los Angeles–based investment
boutique.
Carson obtained his Juris Doctor (High Honors) from the Chicago-Kent
College of Law. He earned his BS in business (finance) from the University of
Southern California.
Carson speaks Mandarin Chinese. You can e-mail Carson at carson@ybs
investment.com.
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Dedication
Robert Collins: I dedicate this book to my lovely wife, Sarah. Over many,
many years, she has provided me with unwavering support that has enabled
me to produce, among other things, the most contemporary work on doing
business in China. Sarah, you are the greatest gift that life has given me.
As young newlyweds, we moved to a far-off place called Beijing, China, in
1983. We were truly pioneers. Together, we witnessed the beginning of
China’s powerful transformation into the modern world.
This book is for my children, too. Thanks to your tremendous commitment to
the Mandarin Chinese language, you’re well positioned to participate in what
China has to offer. My delightful daughter is a treasure in more ways than I
can express. G.R., you’re an incredibly talented young man with all the mak-
ings of great success. And Z-man, born in modern China, you just simply rock!
And last but not least, I dedicate this book to my parents, Mike and Evelyn,
who consistently encouraged me to pursue my passion.
Carson Block: I dedicate Doing Business in China For Dummiesto my father,
Bill. When I was a teenager and college student, he gave me the opportunities
to travel to Asia and to study Chinese (including in Beijing). When I gradu-
ated from college, he provided the backing that allowed me to go to Shanghai
and try my hand at business there. Without his support for my China endeav-
ors, neither this book nor my China career would have been possible.
Authors’ Acknowledgments
So many wonderful people contributed to Doing Business in China For
Dummies.They’re outstanding professionals in their fields, and they’ve
made this a significantly better book.
We’d like to particularly acknowledge a small group of people who spent sig-
nificant time assisting us with this book. Our warmest gratitude and thanks
go to Jay Boyle, Expat CFO; Beth Bunnell, Honeywell; Elizabeth Harrington,
E. Harrington Global; and Xiangyun (Gilbert) Zeng, Houlihan, Lokey.
We would also like to thank the following people for their valuable contribu-
tions: David Atnip, Chad Blackwell, Catherine Chen-Oas, Cheryl Chong,
Matthew Estes, Lefan Gong, Christopher Gray, Kevin Gromley, Max Gu, Ashley
Howlett, Nicole Kwan, Ted Lee, Jim Leu, Stephen Markscheid, Michael
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McNabb, Jeff Moore, Daniel Oas, Jennifer Qi, Sean Regan, Andrew Rice,
Andrew Ruff, Lee Satveit, Walter Schmid, Oded Shenkar, Paul Stepanek, Anita
Tang, Benson Tsai, Samantha Tsai, Cheng Wang, Jack Wang, Peter Wang, Rick
Wang, Dr. Yong Wang, Zheng Xie, Kent Yeh, Jia (Holly) You, Liming Yuan, and
Winston Zhao.
Many thanks to Alissa Schwipps, Senior Project Editor at Wiley Publishing,
for keeping us on the straight and narrow, and Danielle Voirol, Copy Editor.
And thanks to our literary agent, Carol Susan Roth, for her support and
guidance.
Lastly, we would like to thank Richard Pringle for introducing the co-authors.
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Publisher’s Acknowledgments
We’re proud of this book; please send us your comments through our Dummies online registration
form located at www.dummies.com/register/.
Some of the people who helped bring this book to market include the following:
Acquisitions, Editorial, and Media Composition Services
Development
Project Coordinator: Heather Kolter
Senior Project Editor: Alissa Schwipps
Layout and Graphics: Claudia Bell,
Acquisitions Editor: Michael Lewis Stephanie D. Jumper, Laura Pence,
Alicia B.South
Copy Editor: Danielle Voirol
Special Art: Liz Kurtzman
Technical Editor: Dennis B. Kelley
Anniversary Logo Design:Richard Pacifico
Senior Editorial Manager: Jennifer Ehrlich
Proofreaders: Aptara, Todd Lothery
Editorial Assistants:Erin Calligan Mooney,
Joe Niesen, Leeann Harney Indexer: Aptara
Cover Photos: © Catherine Mar/ Special Help
www.judoeffect.com
Stephen R. Clark, Christina Guthrie, Sarah
Cartoons: Rich Tennant Westfall
(www.the5thwave.com)
Publishing and Editorial for Consumer Dummies
Diane Graves Steele, Vice President and Publisher, Consumer Dummies
Joyce Pepple, Acquisitions Director, Consumer Dummies
Kristin A. Cocks, Product Development Director, Consumer Dummies
Michael Spring, Vice President and Publisher, Travel
Kelly Regan,Editorial Director, Travel
Publishing for Technology Dummies
Andy Cummings,Vice President and Publisher, Dummies Technology/General User
Composition Services
Gerry Fahey,Vice President of Production Services
Debbie Stailey,Director of Composition Services
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Contents at a Glance
Introduction.................................................................1
Part I: Building Your Foundation ...................................7
Chapter 1: So You Want to Do Business in China...........................................................9
Chapter 2: Brushing Up on China Business Basics......................................................23
Chapter 3: Getting Acquainted with the Powers That Be:
China’s History and Leadership...................................................................................41
Chapter 4: Planning for Success in China......................................................................55
Part II: Starting Up in China.......................................71
Chapter 5: Traveling to and around China....................................................................73
Chapter 6: Getting Business Going through Successful Negotiation.........................97
Chapter 7: Setting Up Shop...........................................................................................113
Chapter 8: Understanding Government Relations with Your Business...................139
Chapter 9: Building a Local Team in China.................................................................155
Chapter 10: Getting Your Mind on Money...................................................................175
Part III: Conducting Daily Business ...........................197
Chapter 11: Understanding How China Works (and Doesn’t Work)........................199
Chapter 12: Sourcing from China.................................................................................219
Chapter 13: Manufacturing in China............................................................................233
Chapter 14: Selling in China..........................................................................................251
Part IV: Building Successful Business Relationships....275
Chapter 15: Fostering Fruitful Friendships: The Art of Guan Xi...............................277
Chapter 16: Saying and Doing the Right Things: Chinese Business Etiquette........289
Chapter 17: Managing Risks in China...........................................................................311
Part V: The Part of Tens ............................................335
Chapter 18: Ten Clauses You Want in Your Contracts...............................................337
Chapter 19: Ten Fun Ways to Spend Your Downtime in China.................................343
Chapter 20: Ten Ways to Stay on the Path to Profitability........................................349
Index.......................................................................355