Doing Business in China
One of the world’s largest and fastest growing economies, the People’s Republic brims with history and opportunity. Economics may be a global language, but Western expats doing business in China often find integrating into Chinese culture a big adjustment and many invest in cross-cultural training to ease the process.
Starting a business in China is also not easy. A government that is uncomfortably imposing for many Westerners and a sometimes debilitating language barrier are too much for some to cope with and many expats leave before their contracts expire – in fact, up to 60 percent of expats reportedly leave China after less than five years.
The situation is made more challenging by China's visa system. For example businesspeople who have to leave the country at regular intervals to renew their paperwork can no longer apply for visas from Hong Kong – a convenient and popular practice among expats before the laws changed in 2013.
Starting a business in China is expensive, with companies being required to have 500,000 RMB in capital. Other rules stipulate that a Chinese citizen has to hold part ownership of the business. The result is that many foreign entrepreneurs are deterred and those that do persevere have to contend with significant challenges.
This contributes to the country's overall ranking of 90 out of 189 countries in The World Bank’s Ease of Doing Business Survey for 2014. Tellingly, China ranked at 128th for starting a business, 132nd for protecting minority investors and 120th for paying taxes.
Despite the downsides, the number of foreign workers in the country has been steadily increasing over the past two decades as more and more expats arrive to chase success in China.