It is an important time for American companies doing business in China to seek legal guidance and advice. The “qualitative measures” China said it would use in response the U.S. tariffs are now in the beginning stage.
Chinese officials can take any number of actions to hamper American companies. Chinese custom workers can order quarantines on American shipments. Inspectors can be more rigorous when it comes to examining imports. This can lead to delay in approvals. Government officials can also create difficulties when it comes to approval of work visas or licensing applications.
Challenges businesses already face
Companies doing business in China already face a large number of administrative headaches. The laws and culture in China greatly differ from America. And every region in China has its own set of rules and regulations.
The process for doing business in China varies concerning:
- Formation of companies and the means for investing in a particular business
- Businesses often will need to locate local partners to create joint ventures
- The legal documentation is different
- The litigation process is significantly different
- Financing needs will differ
- There is a great need to understand international law components when it comes to litigation, arbitration and discovery in legal disputes
With ongoing talk of trade wars between the two countries and possible retaliation, entrepreneurs also need to consider whether there will be a backlash against them on the part of Chines consumers.
There are obviously tremendous benefits for American companies doing business in China. Those that can make inroads are marketing their products to one-quarter of the world’s population. To overcome the challenges a business faces, working with an attorney knowledgeable of Chines law will be an important step in ensuring success.