The China Venture
The China Venture
The China Venture
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high-technology are eligible for these schemes. Hence access is limited to a fairly small<br />
number of SME’s.<br />
Available Management Resources<br />
SME’s rarely have enough human resources to allow their managers to dedicate themselves<br />
completely to setting up the new business in <strong>China</strong>.<br />
<strong>The</strong>refore it is crucial to plan well in advance an expansion into the Chinese market in order<br />
to provide in time the absolutely necessary management manpower for such a project.<br />
<strong>The</strong> person in charge of the <strong>China</strong> project does not necessarily have to be of European origin -<br />
in fact it is very helpful to employ a Chinese for this task as he will not have to overcome the<br />
barriers of language and mentality. According to opinions of SME’s having set up business in<br />
<strong>China</strong> successfully management resources is among the most important factors deciding over<br />
success or failure of the enterprise.<br />
Suitability of Product and Service Portfolio<br />
<strong>The</strong> products and/or services to be manufactured in <strong>China</strong> should sell well on the Chinese<br />
domestic market. Chinese Government does not appreciate manufacturing for export only as<br />
this would not benefit the Chinese economy to the desired extent.<br />
An exception to that rule are goods requiring a high-tech production lines as in this case the<br />
Chinese economy benefits from technology and know-how transfer from the foreign investor.<br />
Also total production costs of the goods (raw materials, energy, labour, taxes, etc.) are<br />
comparatively high so that - in case one looks for cheap production only - investment in a<br />
different country would be more recommended.<br />
Production Know-how<br />
This dimension describes the level of know-how for manufacturing specific goods.<br />
Generally this know-how is very high in SME’s, but may be at a comparatively low level at<br />
the Chinese partners.<br />
It is a pre-requisite for joint ventures that the SME is willing to share its know -how with the<br />
Chinese partner. In case the manufacturing technology should not be disclosed for strategic<br />
reasons the SME should only invest into a wholly foreign owned company in <strong>China</strong>.<br />
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