The China Venture

More documents

Recommendations

Info

PBOC People’s Bank of China PDB Pudong Development Bank PM Portfolio Management PRC People’s Republic of China RMB Renminbi Yua n SBC Swiss Bank Corporation, now: UBS SBG Schweizerische Bankgesellschaft, now: UBS SDB State Development Bank SEC United States Securities and Exchange Commission SGD Singapore Dollars ShDB Shenzhen Development Bank SOE State-owned enterprise SSE Shanghai Securities Exchange STAQS Securities Trading Automated Quotation System U.K. United Kingdom U.S. United States (of America) UBS AG New Name of the united UBS and SBC (Juli 1998) USD US Dollars WFOE Wholly Foreign-Owned Enterprise WTO World Trade Organisation xii
1. Introduction: The China Venture Paul Krebs was perplexed and bewildered. Throughout his 22 years as an international businessman, he has never experienced such inexplicable treatment from his business allies and acquaintances as he did in China recently. It was not that they treated him badly, or they tried to cheat him or twist his arms. These would not have been surprising at all. The perplexing or even bewildering aspect of this episode lies in the fact that they treated him so very well, treating and feasting him like a VIP, and yet refused to discuss anything relating to the continuation of a supposedly on-going business, evading and postponing indefinitely every mention of work and business. This is definitely strange but should not be inexplicable. After all, these are supposedly business people and people his firm has been working with over the last 3 years. Indeed, everything went very well when Mr. Zheng was running the business for him in China. The business started up in China without a hitch and the deals struck were always profitable. There was no difficulty whatsoever. No problem was ever brought up to him. He only heard good news every time he asked. The accounts always looked good, in fact too good to be true. If everything else were not real, at least the money which flowed into his firm’s bank account in Switzerland were real. Is this what Guanxi is all about? He heard so much about Guanxi from others, yet never experienced any problem with it. Perhaps, his firm’s dealings with China has been bouyed by Mr. Zheng’s Guanxi. With Mr. Zheng gone, there is no more Guanxi. This seems plausible, yet it does not explain the extreme kindness and hospitality of the Chinese. If the Guanxi is still there, why then are the Chinese not talking business with him. If there is no intention of wanting to do business, why should they be so nice to him? If Guanxi was the web of relationships which helped buoy his business in China in the past, then it would seem to be a spider’s web which renders him helpless and unable to move his business now. Such thoughts have occupied Paul Krebs’ mind since he went on his business trip to China 3 weeks ago. There seems to be no logical explanation for all these. It is incredible how one man (Mr. Zheng) can do so much difference to a business. Mr. Zheng was an employee of Paul Krebs. He came to work for Paul’s firm after his graduation from a university in Germany. He was bright, and very hardworking and responsible. As a result, he soon ear ned the trust and respect of his boss, Paul. After working 3 years with Paul’s firm, he expressed his desire to return home to China. This was when Paul 1
Page 1 and 2: The China Venture: Business Environ
Page 3 and 4: Table of Contents List of Figures .
Page 5 and 6: 3.2.3.2 Special Funds for Setting U
Page 7 and 8: 3.4.1.1 National Culture ..........
Page 9 and 10: List of Tables TABLE 2-1: THE AREAS
Page 11: GBP Pounds Sterling GDB Guangdong D
Page 15 and 16: After a short discussion with the p
Page 17 and 18: co-operate with other firms, especi
Page 19 and 20: The Chinese operating legal system
Page 21 and 22: First of all, Britain’s predomina
Page 23 and 24: democratic centralism, all governme
Page 25 and 26: The courts are the state organs exe
Page 27 and 28: more than three hundred intermedia
Page 29 and 30: 2.2.8 Company Law China’s first n
Page 31 and 32: Things seem have to become a lot cl
Page 33 and 34: 2.3.1.1 Financial sector developmen
Page 35 and 36: securities, trading, initial public
Page 37 and 38: underdeveloped compared with market
Page 39 and 40: established in January 1996 by 59 p
Page 41 and 42: Chinese Banks Foreign Banks Financi
Page 43 and 44: system formulation has been put on
Page 45 and 46: The separation of production and co
Page 47 and 48: swap centres (see also above). From
Page 49 and 50: investors with little experience an
Page 51 and 52: them, while a branch with a shortag
Page 53 and 54: Loans, public offerings of shares,
Page 55 and 56: is often to acquire foreign capital
Page 57 and 58: 2.3.3.2 Debt financing As getting t
Page 59 and 60: the approval of special authorities
Page 61 and 62: control compared to national enterp
Page 63 and 64:
usiness in China and related issues
Page 65 and 66:
3. Pre-Entry Strategic Consideratio
Page 67 and 68:
While the testing for the general r
Page 69 and 70:
of relevant contacts to suppliers a
Page 71 and 72:
partner companies with free servici
Page 73 and 74:
strengths which his own company lac
Page 75 and 76:
Central Committee of the Communist
Page 77 and 78:
environment for foreign investment
Page 79 and 80:
legal and regulatory environment of
Page 81 and 82:
3.2.4.3 Legal Framework for Foreign
Page 83 and 84:
• China’s entry into membership
Page 85 and 86:
• stipulates that advanced techno
Page 87 and 88:
Government approval. Foreign invest
Page 89 and 90:
Co-operative Joint Venture Status P
Page 91 and 92:
Reflecting on these points the foll
Page 93 and 94:
Success Factors concerning Products
Page 95 and 96:
Success Factors concerning Company
Page 97 and 98:
high-technology are eligible for th
Page 99 and 100:
Available Distribution Channels A m
Page 101 and 102:
Available Distribution Channels Mar
Page 103 and 104:
Page 105 and 106:
Illustrative Case Studies The follo
Page 107 and 108:
Page 109 and 110:
Which Aspects should SME's Focus on
Page 111 and 112:
Strategy No. 1: Have Cash A comfort
Page 113 and 114:
expenses have a detrimental effect
Page 115 and 116:
As a conclusion, network oriented m
Page 117 and 118:
3.2.13 Case Study: Swisstec, Lyss 3
Page 119 and 120:
factor which makes the foreign firm
Page 121 and 122:
developed within the SME, its impac
Page 123 and 124:
3.3.1.3 The Role of Technology Mana
Page 125 and 126:
Indirect export and direct export a
Page 127 and 128:
maintenance or the use of establish
Page 129 and 130:
Government Central Exploiting Sales
Page 131 and 132:
in the most advanced provinces and
Page 133 and 134:
network through which the products
Page 135 and 136:
Siemens or Motorola, they may have
Page 137 and 138:
Chinese partners. He also began to
Page 139 and 140:
orders. However, a country may also
Page 141 and 142:
Germany/Switzerland China democrati
Page 143 and 144:
3.4.2.4 Conversation at the first m
Page 145 and 146:
only after a certain time and even
Page 147 and 148:
3.4.3 Experiences of European Compa
Page 149 and 150:
ones who atte nded a course. They s
Page 151 and 152:
Another Chinese tactic is, as menti
Page 153 and 154:
4. Post-Entry Strategic Considerati
Page 155 and 156:
and the other one in China. The com
Page 157 and 158:
experience in operating production
Page 159 and 160:
In these two cases, the companies m
Page 161 and 162:
5. References Aharoni, Y. (1966): T
Page 163 and 164:
Dony, A. G. (1998): Market Entry St
Page 165 and 166:
Islam, I. / Chowdhury, A. (1997): A
Page 167 and 168:
Madura, J. (1993): International Fi
Page 169 and 170:
Semkow, B. W. (ed.) (1995): China F
Page 171 and 172:
6. Appendix 6.1 Fact Sheet People
show all

The China Venture

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?