Barriers to Entry and Various Risks That Must Be Considered by Foreign Retail Companies Seeking to Conduct Business in China

On the other hand, knowledge of the political and legal environment of China will be fundamental. Information on their laws and regulations, such as foreign trade policies, product standards, tax laws and requirements, trade barriers, labor laws, etc. are extremely important when assessing China as a potential market for our company. Finally, a thorough research on China’s market conditions, such as potential competitors, market trends, market opportunities and threats, potential risks, unique market characteristics, etc. will be necessary to obtained a complete evaluation of the country before entering the market.

China is the largest market in the world, and probably the hardest business environment. This narrative reflex China’s immense diversity, complexity, and its enormous competitive intensity is unrivalled versus the world.

Determining the most important factors to consider when doing business in China can be tricky. There are a number of things to consider starting with the Chinese culture. Chinese expect foreign businesses to be sensitive to their culture. They do not expect them to be fluent in the Mandarin language but they are more open to those who try. Chinese people are very are very loyal to their families and place high value on their history. Relationships take very high priority when attempting to forge new ventures in China. The Chinese are protective of their culture and work hard to maintain it’s integrity; therefore, they expect to take as much time that is needed to

In the beginning of October 2014, top 500 retailer, Costco announced they would be entering the market in China. Although it sounds simple, the Chinese market is a complex market in which to expand a business. If not done correctly, Costco can fail in this area as a few of its competitors have. This may be a result of the economic problems that are being faced China or the lack of research companies have done on the labor climate in China. Another reason may have to do with the restrictions for foreign investors. Although there are many risks associated with entering the Chinese market, there are also many opportunities for foreign companies. This is why Costco has chosen to enter China with the help of Alibaba.

The Supermarketization of China ..................................................................................... 1 1.1. 1.2. China - Land of Opportunity ....................................................................................... 1 Tesco on Course of Expansion ..................................................................................... 1

Market environment will affect business’s development and influence their strategy outcomes. In another word, selecting a good market to start-up a new business is a half of success. Focusing on the historical data, we can easily find out that China’s average annual growth for the last three decades were 10%, In 2014 according to the global recession this number dropped to 7.4% (Walker, 2015). Even through China’s economy looks like stumbling but the data still present that Chinese market is better than the U.S. since the U.S. average annual growth for 2014 was 2.4%, which is still far away from the late ninety’s 4% annual growth rate (Mitchell, 2015).

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

There are different levels of income and consumption in the different areas of China. Dissimilarities in education, consumption, power, personal habits and tastes lead many multinational companies to view China as one nation, but certainly not one national market. While overseas companies focus on the premium market, China's domestic consumer goods companies compete in principal for middle and low income consumers. Also, the new labor law introduced in January 2008 has improved labor protection and wage regulations, but most importantly it has raised China's factory labor cost substantially causing foreign investors in labor intensive, low margin industries to reconsider their Chinese establishments. China made products are also put under scrutiny with respect to quality, hygiene and safety problems. In a global environment, which is driven by trade friction and financial insecurity, these problems may make it even more politically difficult for China to net result a good year.

This paper sheds light on the impact of globalisation on China and the factors, which affect the process of globalisation in the developing country like China. China is a developing country; its service sector is generally small scale and weak in strength compared with other sectors in the country and its counterparts in the other nations. The business is pre-ruled by traditional services and presently can't seem to be expanded sector-wise. When the markets open up, they will feel the pressure from different nations, which have pre-emptive advantages in business thoughts, quality and scale. In any case, the open entryway change during recent years saw the effective change from a conventional arranged economy to a market economy and from withdrawal to openness. The effect of such a change has gone past desire and been overpowering. What's more, it is likewise genuine that no single nation can avoid globalisation. Support is the best way to distinguish and get a handle on the open doors. Interest is additionally the best way to stay up to date with the standard of the world economy.

KPMG’s Global China Practice (GCP) is a subsector company, established in September 2010, to assist Chinese businesses that plan to go global, and multinational companies that aim to enter or expand into the China market. The GCP team in Beijing comprises senior management and staff members responsible for business development, market services, and research and insights on foreign investment issues. There are currently over forty China Practices in key investment locations around the world, from Canada to Cambodia and from Poland to Peru. These China Practices comprise locally based Chinese-speakers and other professionals with strong cross-border China investment experience. They are familiar with Chinese and local culture and business practices, allowing them to effectively communicate between the firms’ Chinese clients and local businesses and government agencies.

Companies entering foreign markets may face problems or increased costs because of the business environment and the way in which the companies operate. Marketing services might be expensive and certain payment mechanisms may be unavailable. Some of such difficulties include

For the first part, there will be examples of international companies which set up a business in China. As we know, since China joined the WTO in 2001, many foreign companies were attracted by China’s huge market and lower labour cost. But some of them experienced hard times when they came into Chinese market. The unfamiliar of the cultural

Despite having extremely conservative foreign direct investment guidelines, the government of China has been successful in attracting foreign investment. Proper implementations of Human Resource policies for international strategic alliances have always remained as a real challenge in the country. In order to adjust in the Chinese market, international banks have customized their policies and lending criteria and the government has also restructured their banking policies and information technology services. Before setting up an international business, various factors should be considered like finding the perfect strategic fit which should also be in line with the Chinese culture and value culture.

Comentario en Internet de Harvard Business Review : “The experienced entrepreneurial chief executive officer (CEO) of Jadelink International Limited strives to create a modern jewelry brand representing a new perception in jade. The CEO has achieved early success of growing sales rapidly and bringing Jadelink products to Shanghai, the trendiest city in China. But the company wants to expand business to the Asian and international luxury goods markets. This requires intensive capital to continue to build up the company scale. This case examines the consideration of venturing a new business in the China market,

International Retailing has existed and gained market in the past decades. There has been a financial boom in many countries. International Retailers are the companies who are dealing with the retails in the Countries abroad, i.e. far from the countries of the company’s origin. Earlier they were just Domestic Retailers covering their domestic market in the country of their respective origin, but with the elapse of time the demands of people rise in various items and in various countries. It was not possible for them to fulfill the demand of their domestic market and other countries at the same time. So with a risk they started to increase their retails shops within the origin country to have a look at the response of the