Chinas distinctive system can it be a model for others

Along with these qualitative techniques, quantitative research can then help with determining more accurately market size, future growth trends, levels of competition, routes to market, key customer requirements and so on.

Effective market research is essential to determining the size and nature of the market opportunity and acts as a benchmark against which firms are able to measure future performance.

A thorough and well executed market research study can help prevent poor decision-making and establish a clear strategy map for the future.

Very often, the enterprise type will determine the human resources available, and foreign companies tend to have greater freedom with WFOEs and rep offices than JVs in this respect. The quality of human resources available will also be closely related to where the company is located, and it is generally the case that the quality of people available is much higher in Tier One cities such as Shanghai and Beijing than Tier Two and Tier Three cities.

Another key decision to be made is whether to employ expatriates in senior management positions or whether to localize these roles. Employing expatriates tends to be seen to offer greater operational control, although is also more costly in terms of salary packages, relocation costs, insurance and other expenses.

Moreover, most expatriate managers have a very limited local knowledge of Chinese cultural and business practices, and very seldom have the Chinese language skills necessary for dealing with Chinese companies on a day-to-day basis.

A key benefit of hiring a Chinese manager is the local market knowledge and deeper understanding of Chinese business they bring to the role. Unfortunately, in many industries the supply of highly skilled local managers with industry experience is extremely limited, and employers may still be forced to pay a premium to attract the right calibre of employees. Equally, staff turnover rates are extremely high in China and retaining quality managers over the long term is challenging.

Losing local managers will also risk losing access to their guanxi networks and local market knowledge. Whether hiring staff, investing in a joint venture or appointing a local distributor, carrying out due diligence is also an indispensable activity when setting up in China for the first time.

The key objective of due diligence is ultimately to verify the trustworthiness of partners and employees, and to flag up any skeletons in the cupboard before proceeding with any sizable investment.

Although some basic due diligence can be carried out in-house, nowadays there are also numerous legal and risk assessment consultants with offices in China that provide business intelligence, individual background checks, and risk analysis consultancy. IPR infringement is commonplace in China, and any company entering the market for the first time should work under the assumption that its technology will be compromised at some point.

With this in mind, it is generally recommended that foreign companies, and particularly those with large IP inventories, consult with lawyers and IPR specialists to formulate an IPR strategy for the China market. There is no one-size-fits-all IP protection strategy for China, and typically an effective IPR strategy mix will employ a number of different tools. One might include a mixture of various legal, practical and technical measures designed to prevent infringement and ensure legal rights are enforced in the event of an infringement.

Also, there are time limitations on registering patents in China, and so companies that registered their patents outside China more than 12 months previously are usually unable to register their patents locally in China.

Another important consideration is whether registering a patent could actually serve to disclose key technical information that could otherwise be protected through employee non-disclosure agreements NDAs and other practical measures. Any company seriously considering entering the Chinese market in the future should register its trademarks with the China Trademark Office as soon as possible.

Registering a trademark across a number of different categories may also be necessary for companies keen to deter potential infringers. Likewise, new market entrants should ensure that all trademarks are registered both in English and Chinese, and that any internet domain names are properly registered.

Beyond these legal measures, there are a number of practical measures that foreign companies can adopt to protect their IPR. For example, carrying out thorough due diligence on prospective partners and company employees, signing NDAs with partners and employees, and constantly monitoring the market for infringements are key practical steps a company, having already entered the market, can take to prevent its IPR from being compromised.

Equally, actively pursuing legal proceedings against any IP infringers should act as a deterrent to other potential infringers and will alert the authorities to future IPR infringements. Making that first step into the China market is an intimidating step for most companies in the b2b arena, with an almost endless series of potential pitfalls to be negotiated.

Although there are often many obstacles in the way of achieving success in China, the rewards of successfully navigating this difficult course are also immense. China is a country that is constantly changing and its markets are evolving more rapidly than almost anywhere on earth. As such, there is no one-size-fits-all approach by which foreign companies should approach the China market.

This white paper has attempted to illustrate some of the fundamental considerations that any company must take when approaching the China market for the first time.

Although these steps may lead to very different conclusions for different companies, they can help companies to properly determine an appropriate strategy for China. To learn how our China expertise can help your business enter China. To find out more on how our market research expertise can help your business. View 1 excerpt, cites background. China's Innovation Challenge: An Introduction.

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Countries can … Expand. The resulting victory, which for decades the CCP spun as its solo vanquishing of an external enemy, was reinforced by defeat of an internal one Chiang Kai-shek in , establishing the legitimacy of the party and its authoritarian system.

A Marxist system is concerned primarily with economic outcomes. That has political implications, of course—for example, that the public ownership of assets is necessary to ensure an equal distribution of wealth—but the economic outcomes are the focus. Leninism, however, is essentially a political doctrine; its primary aim is control.

So a Marxist-Leninist system is concerned not only with economic outcomes but also with gaining and maintaining control over the system itself. That has huge implications for people seeking to do business in China. If China were concerned only with economic outcomes, it would welcome foreign businesses and investors and, provided they helped deliver economic growth, would treat them as equal partners, agnostic as to who owned the IP or the majority stake in a joint venture.

This plays out every time a Western company negotiates access to the Chinese market. Our response? Yukai Du. A Leninist approach to selecting future leaders is also a way the CCP has maintained its legitimacy, because to many ordinary Chinese, this approach produces relatively competent leaders: They are chosen by the CCP and progress through the system by successfully running first a town and then a province; only after that do they serve on the Politburo. Familiarity with Leninist doctrine is still important for getting ahead.

The Leninist nature of politics is also evidenced by the language used to discuss it. In fact, the Chinese word for the resolution of a conflict jiejue can imply a result in which one side overcomes the other, rather than one in which both sides are content. China uses its particular authoritarian model—and its presumed legitimacy—to build trust with its population in ways that would be considered highly intrusive in a liberal democracy.

The benefits are both financial for example, access to mortgage loans and social permission to buy a ticket on one of the new high-speed trains. Those with low social-credit scores may find themselves prevented from buying an airline ticket or getting a date on an app. But even those concepts lead to considerable misunderstanding on the part of Westerners, who often reduce Confucianism to cloying ideas about peace and cooperation.

For the Chinese, the key to those outcomes is respect for an appropriate hierarchy, itself a means of control. While hierarchy and equality may appear to the post-Enlightenment West to be antithetical concepts, in China they remain inherently complementary. Recognizing that the authoritarian Marxist-Leninist system is accepted in China as not only legitimate but also effective is crucially important if Westerners are to make more-realistic long-term decisions about how to deal with or invest in the country.

But the third assumption can also mislead those seeking to engage with China. But because human beings tend to believe that other humans make decisions as they do, this may be the most difficult assumption for Westerners to overcome. Born in , she experienced as a child the terrible Great Leap Forward famine in which 20 million Chinese starved to death. She was a Red Guard as a teenager, screaming adoration for Chairman Mao while her parents were being re-educated for being educated.

By the s she was in the first generation to go back to university, and even took part in the Tiananmen Square demonstration. Then, in the s, she took advantage of the new economic freedoms, becoming a something entrepreneur in one of the new Special Economic Zones.

Eager for experience, she took a job as an investment analyst with a Shanghai-based foreign asset manager, but despite a long-term career plan mapped out by her employer, she left that company for a small short-term pay raise from a competitor.

By she was making the most of the rise in disposable incomes by buying new consumer goods that her parents could only have dreamt about. In the early s she started moderating her previously outspoken political comments on Weibo as censorship tightened up.

By she was intent on seeing her seven-year-old grandson and infant granddaughter a second child had only recently become legal do well. Had she been born in in almost any other major economy in the world, her life would have been much, much more predictable. But looking back over her life story, one can see why even many young Chinese today may feel a reduced sense of predictability or trust in what the future holds—or in what their government might do next. When life is or has been within living memory unpredictable, people tend to apply a higher discount rate to potential long-term outcomes than to short-term ones—and a rate materially higher than the one applied by people living in more-stable societies.