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Deciding how to enter the Chinese market

There isn’t just one way to enter the Chinese market. Rather, there are many different routes a U.S. company could go when it comes to such market entry. Examples of such routes include establishing a: wholly owned subsidiary, joint venture with a local company, sales office, representative office presence or market presence through use of an employment services company.

These options vary in many ways, including in:

  • What market activities they allow a U.S. business to do in China.
  • What limitations they have.
  • What risks come with them.
  • What level of resource investment pursuing them requires.
  • What level of control they allow a U.S. business.
  • What sorts of market entry goals they are best suited for.

Finding a market entry method that is a good fit for its circumstances and goals can be important for a U.S. company looking to start doing business in China. Entering the Chinese market can have a lot of challenges connected to it. When a U.S. company picks a market entry method that is a poor fit for it, it could make trying to overcome such challenges much more difficult.

So, what method it picks for entering the Chinese market can be a very consequential choice for a U.S. company. Given this, this decision is one that requires careful thought and preparation. When a U.S. business owner is making this decision, it can be important for them to understand what ramifications each of the options they are considering would be likely to have for their business, including legal ramifications.

Once a U.S. business owner decides how their company will enter the Chinese market, many other important decisions follow. This includes decisions on what to do regarding the various legal matters connected to the market entry method they chose. As with the market entry decision, the choices a business owner makes in this regard can have major implications regarding their company’s future in China.

Experienced U.S.-China business attorneys can provide American companies with guidance on the options related to entering the Chinese market and the legal matters connected to such options.

Source: The Huffington Post, “5 Main Ways to Start Your Business in China,” Elizabeth Laiza King, Aug. 17, 2017

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