Succeed in China

A period of enthusiasm followed the reopening of the Chinese market in the eighties. Yet, Western companies that had established businesses there became rapidly disenchanted. The obstacles seemed to far outweigh the potential benefits, even though the latter were enormous. However, some companies have managed to succeed on this market. PricewaterhouseCoopers has interviewed the executives of these companies. They agree in their conclusions on the key drivers that can be used to break down the obstacles raised by this market.

– Joint ventures are the best guarantee of success.
It is difficult to make an effective joint venture with a Chinese company. Ultimate success depends on the initial joint venture negotiations, which require devoting all the time necessary.

– Local management is imperative.
Westerners can never understand the market, the bureaucracy and employee expectations like a Chinese. However, management skills are cruelly lacking in this country. Companies must therefore train their future managers in Western methods.

– Expatriates are key to the transition.
In the short term, the company must rely on a few expatriates to ensure high-quality management. This is no easy task, however. People with experience must consequently be chosen for the job and offered suitable training.

– Good relations with the government are crucial.
Joint venture executives must maintain relations with government representatives at all levels, without committing themselves politically.