Much of the talk about trade war disputes may make it sound like doing business in China is extremely difficult. But while trade with China requires business planning and preparation, it still can prove worthwhile for companies to engage in trade with their Chinese partners.
It is important to take a number of factors into account when considering doing business in China. Also, companies need to be realistic in what they expect when taking on such a task. It is important to remember that we are dealing with potentially the largest market in the world.
A few things to consider
The tariffs that China places are actually relatively low in comparison to other developing nations. In recent years as a member of the World Trade Organization, China has shown a willingness to lower tariffs. Also, companies need to understand that export controls by the U.S. contribute to limitations in trade. Chinese tariffs cannot be the blame for everything.
China also does not make as much money off of exports to the U.S. as the trade deficit would suggest. The trade deficit is also somewhat deceiving in that it ignores a surplus for America in a wide variety of sectors.
Sales by U.S. companies in China now exceed $500 billion. Also, Chinese payments of intellectual property fees have greatly benefited American companies. Plus, China also provides subsidies for a number of foreign funded enterprises and not just its own businesses.
Obviously, there are a large number of challenges that go along with doing business in China. Businesses need to protect their trademark and intellectual property interests. This is true whether doing business in China or in any other nation in the world. It is important to understand what you will need to do to protect those rights. This is why having an attorney on your side who understands the issues can be so valuable.
There can be great benefits to doing business in China. While companies do have to do their due diligence and have necessary guidance and advice on their side, challenges to doing business in China are not insurmountable.