Opportunities and Actual Problems in China-Business

[15.11.2006]

Opportunities and Actual Problems in China-Business

Intellectual Property:
If the process used in manufacturing a product is not the legal property of the manufacturer, the product is not a legal product (patent law). Enforcement in this case need not rest with the Chinese government; goods can be stopped at the border of the country of destination.

The Chinese government promised now to observe patent laws and shows some signs of an approach. But legal procedures take time and are risky. Following experiences through close contact with Taiwanese managers could be helpful:

R&D
The availability of talent at low cost level is interesting, also the Chinese market. Certification, if necessary, must be secured. Chinese organizations want to get the last technology. Take care of intellectual property.

Managers
After a period of qualified expatriates companies want to recruit talented Chinese managers. These local managers must be younger (25-40 years), modern educated and experienced. International recruiting agencies and head hunters in the big cities are always looking for qualified local managers. This source, direct headhunting and training of young academics, are the possibilities of western companies – or high paid expatriates.

Natural Resources

Electricity:
Electricity is a huge problem in China right now. Expect chronic shortages. China’s economy has grown faster than its electrical grid and generation capacity, so demand for electricity has outstripped supply. The new huge Jangtse hydroelectric plant (working in 2008) will improve but not solve the situation.

Because all suppliers are depending on electricity, they should install supplemental diesel generators. Fuel is always available.

Water:
The Chinese water resources are critical and in the various regions of different quality and quantity. It is necessary to have the regional water information and to secure continuous sufficient water supply. For good quality the use of modern water treatment systems is practical.
Waste and Sewage:
China has now modern aims in environment policy. The situation in the regions is very different and sometimes poor. Foreign companies had to make proposals and arrangements for waste, sewage and recycling together with the local authorities. The different ways and cost of solutions must be considered because more and more problems in the environment fields are arising.

Das ERPS (European Center for Research in Purchasing and Supply, Wien) ist ein nicht gewinnorientierter Verein, der es sich zur Aufgabe gemacht hat, Studien auf dem Gebiet des Einkaufes und Beschaffungswesens zu verfassen und zu publizieren um damit Einkaufsmanagern in ihren beruflichen Tätigkeiten und Unternehmen eine Unterstützung anzubieten.