When American companies delay in doing business in China, it may only mean that other businesses from throughout the world will take advantage of the circumstances. American companies have been hesitant to enter into business negotiations in China. This may be a mistake since China is now the world’s second largest economy.
According to an Australian publication, many Australian businesses are about to take advantage of export opportunities that come along with doing business in China. This makes sense. Besides being a fast-growing economy, China also has over 300 million citizens considered as middle class. And there are various types of consumers in extremely large numbers.
Trade tensions between the U.S. and China
A partner at one Chinese company feels American businesses are “too bearish” concerning doing business in China. With tariffs and trade secret concerns, a cautious approach is understandable.
Yet hesitation on the part of these companies may also lead to consequences down the road. As one partner in a Chinese company stated to CNBC, “If you are not a meaningful player in the China market, you will not be a global leader down the road.”
This same partner said that American businesses need to be more flexible. He felt it would especially be a good idea for startup companies to consider doing business in China. There is a lot of room to grow in China, he continues. Even players who are not dominant in their industry will have a chance to thrive in such a large economy.
While such optimism is welcome, it is important to remain prudent in decision making. Understanding the Chinese business culture is often key to success. Therefore, it’s important to have on your side legal representation and guidance when it comes to investment decisions. It’s also important to avoid investment mistakes before it becomes impossible to pull money out of a potentially risky opportunity.