The market in China is too big for American businesses to ignore. Despite pessimistic assessments, there are signs that America and China are resolving business issues.
In its analysis, the Brookings Institution highlighted areas of success. While China only joined the World Trade Organization in 2001, we are closer to China regarding issues of security and trade than ever before.
As you consider doing business in China, you might wonder how well your concept will succeed. You probably consider your return on investment (ROI). And you likely consider the country’s gross domestic product (GDP).
While the numbers may not be the only consideration among international deals, they likely weigh heavily on your decision. In the United States, the GDP grew nearly 3 percent in 2018. But is China facing an economic decline?
The number of intellectual property cases heard in China continue to increase. There has been a 41.8 percent increase in cases over the past year.
According to a South China Morning Post article, this is the second year in a row the cases went up by over 40 percent. In 2017, China courts handled 213,480 cases. In 2018, the number increased to 288,000. The number of prosecutions has also increased.
While there’s been discussion regarding intellectual property and forced technology transfers in China, these may not be American businesses primary concern. The most important concern may be more basic than that.
According to a recent Forbes article, the main issue is “cumbersome regulations.” They came to this conclusion due to the results of a survey of businesses by the American Chamber of Commerce in Beijing.
After months of interruptions in trade talks between the United States and China, President Trump announced that there had been “substantial progress.” Such progress will lead to the U.S. postponing implementation of higher tariffs.
Originally, the U.S. planned on raising tariffs by $200 billion on Chinese imports as of March 2. According to a recent Forbes article, this would have amounted to a 25 percent increase.
Many American companies create joint ventures in order to expand their market and lessen the risks that they face. Yet efforts by American companies to form joint ventures in China have often been problematic.
We have spoken in the past on this blog about how Chinese interests try to force the sharing of technology and trade secrets as a condition of forming a joint venture. The problem is that the American company creating joint ventures face a regulatory scheme in China that in some instances makes sharing of this technology mandatory.
Many businesses have concerns about operational costs and regulatory scrutiny when doing business. This is not unique to doing business in any particular location. And while there are obstacles to doing business in China, there are also many reasons for why businesses wish to relocate there.
Investors in China are hoping to gain a competitive edge. According to one retail periodical, many areas in China remain unrepresented when it comes to doing business there. For this reason, there could be a significant increase in retail business in China. And it’s difficult for a business to ignore a market of over one-billion people.
For many companies, “business as usual” includes an occasional dispute. Whether it relates to a contractual matter, personal injury or copyright infringement allegation, most companies face legal trouble at some point. However, when those issues become a matter of international law, they immediately grow in complexity. But what does that have to do with a cellular company?
Consider cellular carriers
Intellectual property concerns patents, trademarks and trade secrets, copyrights and copyrighted works. Because it is so valuable to companies, legislators design laws concerning intellectual property in order to protect inventors, authors, musicians and authors. Yet concerns of intellectual property theft in China continue.
There are claims of cyberattacks on American companies supported by Chinese officials. There are also claims that Chinese officials pressure foreign companies into sharing technology with local companies.
We have spoken many times about Chinese efforts to introduce legislation that provides greater protections for foreign businesses. However, there continues to be debate regarding the effectiveness of legislative efforts.
The Chinese government obviously wishes to reduce disputes with American officials. Because of this, China is now in the process of introducing a new foreign investment law. Purportedly, this would ban forced technology transfers. It would also provide increased protections pertaining to intellectual property rights for foreign businesses.
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