Business Environment in China
Understanding the long-term investment in China
Introduction
Every country has its own rules and regulations according to the needs, requirements and environment of the business in that country. So for any company, thinking to expand the span of business to another country and wants to invest for long term in that country, especially where production in that country involves, it is very important to understand the business environment, government policies, restrictions and future perspective of business in that country. The business has to assess whether the company has ability to incorporate most of the business needs and it should also be considered that whether the culture of the company can be integrated with the culture of that country.
So the business operations will be different in different ways which have been discussed below:
Import/export restrictions:
There are certain types of goods and services which may be prohibited in the country where the business has plan to expand. For example, in Islamic countries like Dubai, Saudi Arabia etc, it is prohibited to expert or import alcoholic products except in some situations.
Certain types of quality measurement might be imposed on the companies in order to import goods in the country.
Another aspect of restrictions regarding export are the restrictions regarding the quantity which is being exported by the company. Governments can restrict the quantity of any specific product or service to be exported in order to avoid shortage in home country.
China has imposed custom levy on the import as well as export of the goods. In addition to this levy, china has fixed a quote for imports of different types of products in the country. These restrictions on imports allow the home countries to produce more for the residents of China and less amount will be spend on imports and hence improve trade surplus for China which will help China to increase foreign reserves and hence make the economy of China more
Introduction
Every country has its own rules and regulations according to the needs, requirements and environment of the business in that country. So for any company, thinking to expand the span of business to another country and wants to invest for long term in that country, especially where production in that country involves, it is very important to understand the business environment, government policies, restrictions and future perspective of business in that country. The business has to assess whether the company has ability to incorporate most of the business needs and it should also be considered that whether the culture of the company can be integrated with the culture of that country.
So the business operations will be different in different ways which have been discussed below:
Import/export restrictions:
There are certain types of goods and services which may be prohibited in the country where the business has plan to expand. For example, in Islamic countries like Dubai, Saudi Arabia etc, it is prohibited to expert or import alcoholic products except in some situations.
Certain types of quality measurement might be imposed on the companies in order to import goods in the country.
Another aspect of restrictions regarding export are the restrictions regarding the quantity which is being exported by the company. Governments can restrict the quantity of any specific product or service to be exported in order to avoid shortage in home country.
China has imposed custom levy on the import as well as export of the goods. In addition to this levy, china has fixed a quote for imports of different types of products in the country. These restrictions on imports allow the home countries to produce more for the residents of China and less amount will be spend on imports and hence improve trade surplus for China which will help China to increase foreign reserves and hence make the economy of China more
References: Ambler, T., Witzel, M. & Xi, C., (2008), “Doing Business in China”, 3rd Edition, Routledge Publications CCH Tax Editor, (2008), “China Master Tax Guide”, 5th Edition, Kluwer Law International China labor relations, (2007), “China Enacts Labor Relations Law, Effective in 2008”, Retrieved from http://ohsonline.com/articles/2007/06/china-enacts-labor-relations-law-effective-in-2008.aspx Norton, A. & Hughes J., (2009), “Enterprise Management”, 6th Edition, CIMA Publishing Riedel, J., Jin, J. & Gao, J., (2007), “How China Grows: Investment, Finance, and Reform”, Princeton University Press Yan, X. & Pitt, D., (2002), “Chinese Telecommunications Policy”, Artech House Publishers Yang, H. (2010), Retrieved from, http://www.chinadaily.com.cn/bizchina/2010-12/03/content_11651241.htm.