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Despite some encouraging signs, China remains a difficult place to do business. It is particularly challenging for the smaller non-Chinese company.
Previous experiments in opening China’s economy did not go well. The so-called Opium Wars and the Boxer Rebellion are only two examples.
Since these events, business has unfolded slowly to avoid causing any chaos—economic and political. Until the present they’ve managed the economy by limiting outside participation in their market, while becoming an indispensible factory to the rest of the world. It’s worked well so far.
This doesn't mean that foreigners cannot make money. Many have and continue to do so. The key is to have a Chinese partner, to be patient, and in some cases to transfer technology that could mean making less money in the future or helping to create young next major competitor. Despite such challenges, there’s no shortage of foreign companies knocking at China’s door.
Buying global brands but not yet creating them
The Chinese government demands a high price for foreigners to sell in this market of 1.3 billion consumers. This policy has worked because diligent Chinese companies, mostly government-owned, are working their way up the value chain. Yet, there are few Chinese global brands that haven't been purchased from others and thus aren't recognizably Chinese. Volvo cars and Lenovo (purchased IBM personal computers) are examples. A Chinese tire company recently purchased Pirelli, the Italian tire-maker; but France's Michelin (and its Chinese JV partner) dominate the domestic passenger car market.
This is likely to change. The Chinese have been good at imitating but they are poised to introduce a range of new products that should do well globally. One on display recently at a trade show was an audio speaker that responds to voice commands to play music or deliver news and other content. Another device is an electric piano whose keys light up when it's time for the player to play the next note. Eventually, the player begins to read the music and no longer needs the notes.
The transition from imitator to originator is important because Chinese entrepreneurs will need to rely on intellectual property protection and will insist that everyone abide by their rules. Success in the global market will require access to other markets and businesses in those markets will require access to China’s domestic market.
The long march to open a business
As a foreigner, registering a business in China can take several
years, costing money in the form of time, fees and consultants. A JV may take less time but finding the right partner and structuring the deal can be time consuming, and cultural differences plus legal safeguards are not trivial matters.
Other items to consider are the regulations such as product safety, reliability, and packaging and labeling. In many instances the product testing can be done in the producer's home country by a Chinese government-approved testing entity. This also requires time and money.
Intellectual property protection is another big concern. Critics claim that Chinese e-commerce marketplaces are still overstocked with fake goods.
Both Amazon and eBay have struggled to set up shop and ended up buying some shares of competitors or opening their own virtual stores on the market leader’s marketplace, TMall (operated by Alibaba).
Alibaba itself could be a game changer when it comes to boosting sales of foreign companies in China. A new platform has been created, TMall International, that features products of non-China SMES, including some from the U.S. Alibaba’s founder, Jack Ma. He envisions e-commerce consuming as a lifestyle change for Chinese, ad part of the style means serving up a wider array for products from global producers.
TMall International is not yet a wild success, but it has been live for less than a year. And the retail market in China, including e-commerce, is ferociously competitive with super thin margins for marketplace owners. With a horde of $250 billion from its record-breaking stock issue, Alibaba has the resources to influence lifestyles and to provide easier access to the China market.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| BK0609T2 NTN | 6 | 10 | 9 |
| HK0609T2 NTN | 6 | 10 | 9 |