Travel Reference
In-Depth Information
overcome a lot of the obstacles that you would otherwise face as an independent foreigner.
They do, of course, come with risks.
When looking for a partner, Merica-Jones says you should look for someone who has an
office specifically in Beijing—not just in China. Given that most business operates accord-
ing to
gu
ā
nxi
(relationships), the company is less likely to have good connections in Beijing
if they don't have a consolidated presence there. This is particularly important for Beijing
because it means they are also potentially connected to those in the country's governmental
hub.
When you go into business in China, make sure you know the laws. Assume nothing. In
many regards the laws are similar to those in the United States, and in many regards they
are different. China Law Blog points out joint ventures as a particular example of how many
Americans go wrong. In joint ventures in China, owning 51 percent does not give you con-
trol of the company. Instead, control usually rests with whoever has the right to appoint the
joint venture's representative and managing directors. Chinese businesspeople know this,
but many Americans take the bait of the 51 percent carrot. This is China—if you become
complacent and rest on what you think you know, you'll get caught out.
Historically, business contracts in China have been more verbal, but forget this idea, es-
pecially in Beijing. When doing business you'll need to stipulate every detail in the con-
tract—do not assume the courts will fill in the blanks for you down the track if you get into
a dispute.
Some argue that having too tight a contract is bad for building warm relationships with
Chinese companies, that crossing every t and dotting every i causes loss of face. Addition-
ally, they argue that the Chinese court system is so ineffective, it's not worth going through
all the effort of formulating and agreeing on a contract. China Law Blog's Dan Harris con-
cedes that there are cases where these this might be correct. He argues, however, that Ch-
ina's courts are “fair often enough” to make it ill-advised to do business in China without a
contract.
“Having a well-written contract does not mean you will always win your lawsuit if you
are forced to sue on it. But it does mean you will have some leverage if things go wrong
and it does mean you will at least have a chance,” he says.
Finally, never agree to an official “contract signing” date, and never tell your prospective
partners when you'll be flying out of town. When asked how long you'll be in China,
simply answer, “I'm here for as long as I need to be for this.” Chinese businesspeople do
