Challenges for foreign company in China
Along with the benefits, there are some challenges in the Chinese market for your consideration. Although the economic growth of China is quickly and steady.
In this part, we focus on four key challenges related to the business environment, regulatory and cultural challenges, and innovation and human resource management. The latter two are key management challenges.
Foreign companies in China mainly need to face challenges from government, law and regulation.
Firstly, China is a rising market. Its institutional environment of law and regulation is pretty weak and fast. In addition, related government procedures are often not that open.
This means relatively standard day-to-day tasks can waste management resources in some ways.
Secondly, government actors at the local and central levels may be of greater importance because of their information imbalance. Also, they are likely to use the vulnerability of local institutions and regulation procedures.
So, they can support domestic companies more and earlier. Especially, China uses interventions in areas like new electric vehicle and battery technologies, semiconductors, solar panels/modules and wind power.
Thirdly, the relationship between China and the United States is close to industrial policies.
China has a 5000-year long history. Its culture influences Asia greatly. The Chinese culture has a rich and deep value system. In a foreign company, people from different countries and cultural backgrounds can communicate with each other. They may have conflicts, also, they may blend together.
Innovation management challenges
Both foreign companies and Chinese co-operators pay attention to innovation management.
Many joint companies are willing to provide knowledge, learning and experience, but some are not.
The concerns are pretty much for intellectual property. Meanwhile, you can find more and more measures by the Chinese government. For the purpose to protect the rights of intellectual property.
There are two ways for innovation management challenge.
One is Mergers and Acquisitions(M&A). It is to upgrade innovation and technologies. The other one is to encourage high-skilled talent to return to China.
In a word, collaboration and cooperation is the way we should carry on. China may lead innovation even do better, the breakthrough. And foreign companies need to adjust their innovation strategies to succeed.
Human resource management challenges
Most of the foreign firms in China have two challenges in human resource management.
The first one is how to attract and retain high-quality talent. Because high-quality talent may request a higher payment. Although much less than the those in developed countries.
The second one is the aging society issue. Not that many people are willing to raise more children than before.
But fortunately, the situation is improving thanks to the new policy. That is, the Chinese government is encouraging people to have a second baby in many developed areas.
As the saying goes, opportunities and challenges exist at the same time.
Indeed, it is not easy to do business in a foreign country. Still, the huge Chinese market provides an environment with many opportunities.
Despite all these challenges, many foreign companies in China find their ways to succeed.
And you are not alone, is here with you. If you’re hesitating on the way,