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Q: Would you start a business in China?

Assuming you have a good idea that you're pretty confident will work. Would you go through all the administrative headaches, time and paper work to get it done? And if so, would you go the easier route and have a Chinese partner? 

9 years 46 weeks ago in  Visa & Legalities - China

 
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Shifu

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I do not understand why anyone would want that hassle here. It is made so hard for foreigners to do and even if you do have a Chinese partner can you really really trust them. Also I think when the property and debt bubbles collapse there is going to be a lot of angry people around and as a foreign owned business you are just setting yourself up for major headaches. There are plenty of places in the world where foreign investment, and foreigners, are genuinely welcomed. I see absolutely nothing that encourage me to do that here.

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9 years 46 weeks ago
 
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Shifu

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i would if i had an idea where i have almost no risk.

 

good ideas are gold and gold is money. You can really become rich in china with a stupid idea

juanisaac:

I hope you do all your business on-line and no one in China will ever be aware.

9 years 46 weeks ago
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9 years 46 weeks ago
 
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wanna buy some TUPPERWARE?

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wanna buy some TUPPERWARE?

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9 years 46 weeks ago
 
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Shifu

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I did. I opened four retail stores in one year. The registration part wasn't a hassle since it was done by an agent. The fees I paid to the agent was fair and compared to the bureaucracies that I had to deal with if I did it myself, I'd say it was worth every penny. Trouble wasn't from the government, it came from my Chinese partner. We were fairly profitable and dividends was ok. He started bringing his wife, brother, parents on board without my knowledge. Initially I thought they were just visiting and would leave soon but it became evident that they were there to live off the business. I finally sold my shares to him and cashed out. So, if you want to start a business it's possible but you need to find the right partner. Headaches will not be from the authorities but from whoever you will be working with. They will find all sorts of ways to skim the business.

brother1818:

This is sad but I guess one of the major stumbling blocks. It's a cliche that you think can happen but won't and then you hear stories like yours that just prove the cliche correct.

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Everything has been made intentionally impossible by law in China. Not a local? You can't. Not certified? You can't. Can't work without certificate and can't get certificate without work experience. Stupid contradictory things like that.

If you plan to start for yourself, I'll say this: You need FAMILY (in-laws) in the place, with ties to the government. Without that, you won't stand a chance to become fully legal, and the chengguan with have a field day with you.

All the paperwork that's impossible to get without inside connections, will be written up for you given time. You will be safe enough to operate in the meantime. The only thing that could hurt you, is very large scale negative attention about your business. This won't happen unless you get into a serious tiff with a local. Don't hurt the feelings of the Chinese people in public, and smile like a submissive idiot to any "VIP" that you encounter.

Small business? Stay out of major cities. If you start selling pizzas in downtown Shanghai, Pizza Hut will be screaming bloody murder to the authorities, asking why their bribes give them no protection from competition. If the chengguan don't come straight to your door, an elaborate plan will be set up (Sinobear mentioned this once) of competitors surrounding your business and undercutting you in price. Once you quit your business, the competitors will leave the same week.

I recommend county-size towns and 4th tier cities. 3rd tier might work, *if* you're connected. Any place bigger than that, and you'll need a lot more monet (at which point I think you'd have better options than starting a business from scratch). If you set up your busines in a smaller city or town with connections to protect you, you can ask your relatives in gov't to get rid of whatever authority or scheme is being used against you. Then you have a fair chance - fairer than most people are afforded here.

Still, it all depends on your ability to sell for profit. Foreigners have a starting advantage, because curious locals will want to try foreigner-made food/product/service. But you need experience in marketing to Chinese in order to secure steady cutomers.

My impressions of the Chinese market: Don't even try selling to old people - they hate you, you Japanese dog. The young are curious, and the new rich (fu er dai) seem to have no idea what to spend their money on after the mandatory house and car. Make your product 'snap, crackle and pop' with colourful, flashy vibrance. Ignore considerations of quality or even logic. Chinese care a lot about windowdressing, and have some voodoo-logic to help them determine quality which we aren't fully privy to.

Copy some other successful brand logo, slogans, uniforms, methods and overall look, and Chinese will praise you for making your business look professional. Have some pretty faces to help you promote the product. It helps if your staff are attractive young women wearing make up and showing a bit of leg.

If whatever you sell looks like a colourful, beautifully wrapped Christmas present, Chinese will be drawn to it like moths to a flame.

And if your business lifts and soars like a cash cow, go to the tax office before they come to you. Bring your family and gov't relatives in tow to secure a favourable deal.

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9 years 46 weeks ago
 
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Shifu

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As of 2014:

Pick your case.

 

- No attachment to China, could leave the place to better pastures without regret:

Forget it. Business wise, any pasture is better than China. Administration is a hassle, partners relation is a hassle, customer relation is a hassle. Depending on the business you're in, everything will be done to step in your way (if your business isn't of any interest for the local authorities), or to rip off whatever you made and work for with as little compensation as possible (if at some point your business was of any interest for the local authorities, but the transfer of technique/technology to local copycats is done, which was the plan from beginning). Even big companies that were too naive in setting their business in China got screwed by their so called partners and employees.

Don't assume your employees will be cheap. They will be cheap because improductive, when not working against you. If they're good, then they won't be cheap. You will need constant supervision to get something out.

 

- Some attachments to China, but no reliable partner:

You are going to get screwed. Empirical evidence: I haven't heard a single case ending well. Never ever trust Chinese with something you can't afford to lose or without some kind of real leverage.

 

- Have attachments to China:

-> If you have a reliable partner (and by that I mean reliable to the grave) AND your business isn't anything sensitive or some kind of revolutionary idea (a restaurant, some common business), you might try try.

-> If you have a reliable partner BUT a truly revolutionary idea of some sort, well, you can try, but being in China is at your disadvantage for all purposes. First occasion your little treasure can be leaked, it WILL be leaked. Keep your secrets where you can see them. Which in the end might reveal more grey hair than it's actually worth.

 

Up to you.

mike695ca:

A true sign of a great armchair quarterback. Questioning others credentials while having non your self? Please tell us all what you do here in China that would allow you to pass along your great wisdoms?

9 years 46 weeks ago
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I would strongly advise against it for reasons possibly already mentioned but here is a quick summary: 

 

- need connections to survive, no connections you will sink fast

- government officials and fat cats will expect you to trip over yourself to personally serve them and drink with them to gain their favor (you better like bai jiu!)

- employees will grow disdainful of you because many don't like be managed by foreigners more so now than ever

- employees will use cultural barriers and communication barriers to try any way to take advantage of you for their own gain

- local businesses that compete with you will start rallies against you and find ways to try and demonize you

- landlord will try to cheat you when your business is successful to either steal your business or severely raise the price

- locals will try to exploit you legally in any means possible and most likely win because you are a "foreigner"

- local workers feel they are allowed to strike against foreign companies but don't dare to strike against state-owned organizations

- China doesn't really want YOU here and although it wants foreign investment it does not want foreigners

 

And these are very realistic situations (not just being pessimistic). Some of which, I know have personally happened to others and myself. 

Robk:

I should add this all depends on region, industry and of course... exactly WHO is your customer? How do you reach your customer? 

 

But the list are things you should CERTAINLY be prepared for... if they don't happen... or you can prevent them, then you have a fighting chance. 

9 years 46 weeks ago
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After I read what happened to Mark Kitto I decided to not even bother owning a business here.

Instead I am a minority investor in  the business venture of my Chinese boss.  He put in 90% of the money and I 10%.  He drinks the baijui and hands out the hong baos.  I stay back and do nothing.

He hires well qualified people and not family members. 

expatlife26:

i hope you had a good lawyer for the partnership agreement to go over the Shareholders agreement and Articles of Association.

 

Sometimes you can get screwed by being issued a different share class with no voting rights (Class B vs. Class A) where the Class A shares can force a sale of Class B under certain circumstances.


Gotta be careful

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This might piss some people off who have answered here who i like and respect but.... If your going to start a business its probably best to do some real research and stay the hell away from this site. All of these "china will make you fail!" Answers your getting , is just a bunch of conspiracy bunk from people with zero experience. Just second hand stories. @ Louise seems to have some. And i agree with his answer.

I am someone who started my own company without any chinese partners. And holy shit did it fail! I lost hundreds and hundreds of thousands. But i will say, there is not a single person or agency i can blame for that failure but myself and situations.

Use some common sense people. How many people here get harrassed by cops and government now? None or few. I find people walk on eggshells around foreigners. Its the same when you own a business.

Getting a license was a breeze, paying taxes was a breeze. No one tried to freeze me out. I never had people come and snoop or pry. Everyone left me the hell alone. I never paid a single bribe. Geberally speaking. Even corrupt government dudes know bribes are wrong, and they certainly know foreigners dont do that. Im not saying its not possible. But i never saw anyone try. I failed because i was a dumbass. Not because of anyone else.

Now you could say that because my company failed so bad they didnt bother but if i got rich theyd come circling.

To wit id say I currently work for a wholley owned foreign company with over 50 million rmb in sales last year. And again, never had a damn problem with anyone. Id say we are treated better than a chinese business.

There are lots of ways to make money in China, so if you wanna start a business id say go for it. Best advice i can give you, plan your ass off. You need a plan A all the way to Z.

Fact is most little companies that fail is because of 1 lack of capital. People save and start something and if it doesnt take off then they are screwed. And 2. Everyone in China thinks they are so smart , but there is a reason they didnt start a business is their home country. Theu have no idea what they are doing and have little to zip actual business experience not to mention a poor work ethic from being in China too long. So yeah. That doesnt help. So study study study! And good luck!

mike695ca:

Also i would add. The connections thing is overblown. Your never screwed, even if you dont know anyone.People reading to many forums. There is nothing you cant do when you have the help of google, alibaba, and patience.

9 years 46 weeks ago
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Robk:

I agree but also disagree... 

 

I guess it really depends more on the type of company you try to open and your management. Those issues I mentioned do happen but not all the time and not everywhere. 

 

It's luck of the draw, finding the right people (REALLY FRIGGIN HARD TO DO IN CHINA EVEN WITH SO MANY PEOPLE), and sometimes greasing the right wheels for marketing or whatever... 

 

Want to hear a funny story? 

 

This American buddy I know planned on opening a restaurant for a couple of years. He planned the decorations, the food, the cocktails... his wife helped him get setup and find the staff. It worked out... and continues to survive, not really thriving but he did what he set out to do. But what did he go through? 

 

- Some Chinese local TOTALLY copied his idea, right down to the lights and tile designs. He showed me on his WeiXin of the copycat place and I thought he was lying. It was EXACTLY the same. Turns out some woman would come around the shop and take photos when we wasn't around. Slept with his bar tender and stole all his recipes (and the bartender too). 

 

-He couldn't get the business license being a foreigner (whatever stupid reason), so they had to put it in his wife's name. But he managed and owned it, and used his family visa to live in China. Other foreigners would also try to setup a business and when denied a visa to allow them to do business they would point to my buddy and say "Well, why did you give him one? He owns the restaurant and runs it!"

 

I guess every region of China can be a lot different. So, you are right...  takes a lot of research and can be done but I wouldn't even both unless the person opening it is fluent in Chinese and has lived in the area they want to open the business for at least a few years. But in China you get a lot more random set backs that you could possibly foresee... The restaurant was an exact replica and there was nothing he could do about it lol!

 

9 years 46 weeks ago
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RiriRiri:

"A conspiracy bulk from people with zero experience" ? You sure don't get into much details of what was yours. I just get you failed and lost tons of RMB (let me guess, that ended on Chinese hands ?).

I'm not doubting your honesty, but I don't think you have truly experienced anything relevant either.

Businesses are treated in different ways in every province, even every neighborhood and also acording to their activity.

 

But the constant is that people cheat, scam and lie wherever they CAN, that true empirical evidence of failure is all other the place, that "laws" never apply in a fair way and that in all honesty if you plan on opening a business relying on a taskforce that actually needs some brain, you'll be better off any fucking where in the world. I can believe in exceptions, but I have witnessed enough of everything I just listed above to say in all confidence that I know what I'm talking about.

9 years 46 weeks ago
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mike695ca:

You have witnessed. Not experienced. Big difference. What details are you looking for? Would you like my passport number while your at it? Have you applied for a business licence? I have. Have you paid taxes in person? I have. Have you made mass purchases? Or negotiated million dollar contracts? Im currently VP in a 50 million rmb company. I have more business experience than you can google. So pass along your second hand stories all you like. Be perfectly confident your not talking out of your ass.

9 years 46 weeks ago
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RiriRiri:

I have witnessed because I was wise enough never to experience.

And by details I mean what kind of business and what kind of problems. Revelant stuff. Rest assure I have zero interest in your private life.

9 years 46 weeks ago
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mike695ca:

Alright, fair enough. We make a variety of wood and or pvc products for LOWES Home Depot and Walmart. Mainly i source, negotiate and pay for all raw materials for making the products. Take artwork from Canada and then source boxes graphics, printing for packaging. Oversea production and packaging then i work with our shipping agent and oversee logistics and customs. Work with the buyers, sometimes its a sourcing office here in asia, sometimes its in America. Usually to deal with any problems after the facts. When im not busy doing all that then i need to travel around China and find other factories that can produce products for us that we would prefer to outsource. I sincerly hope that this is enough for the wise riri to find sufficient and relevant enough experience to be able to have an opinion on the matter. Now please. Share with us your vast experience here in China.

9 years 46 weeks ago
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mike695ca:

Relevant true story. One time last year during a factory audit. We were having alot of trouble with an inspector who wouldnt pass us for the most obtuse reasons. Just a dick. Well the obvious conclusion was that this guy needed a bribe to screw off. Anyways i said no, we dont pay bribes. My chinese counterpart said no. We havent paid a bribe yet. But our Ownership group got restless and we needed this guy to pass us as there were millions on the table so orders where passed down. Whats a few thousand? Pay the man. Needless to say he didnt accept our little red enevelope and we got reported. To this day we still get calls from the ethics and corruption offices of that customer. Never again.

9 years 46 weeks ago
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RiriRiri:

I might argue that you are working in one of the very few domains China can actually bear to have some foreigners involved in, which is factories stuff & getting their whatever garbage their factories can puke out of the country. So, yeah, of course if you can help them in that matter I'm sure they'll pave your way. I am not sure this was what the topic was going for but I'll let you the benefit of the doubt.

I might argue that your experience only proves that the righteous way to do things is a pain in the ass in China leading to annoying contradictions, which is what everyone else says too.

And I might finally end by saying that I really really don't see what point you are making that could be a valid contradiction to... anything.

 

Now I don't disagree that with a solid planning, a solid funding and also a strong personality or overall knowing what the fuck you are doing, you can get something out of here. But then again, with those you just can get more out of everywhere else too anyway.

 

But then you're gonna keep throwing tantrums and I'm well past the age of comparing dicks, so I'll let you and your arrogance on top of your mountain.

9 years 46 weeks ago
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mike695ca:

yup, that about sums you up. good for nothing, throwing back handed comments with my dick in your mouth.  you just keep on thinking you know everything from the front of the class room. 

You are quite the knowledgeable fella aint ya? I bet you could teach Tiger how to put better too! Do ya play golf? Nope but youve seen enough! Still after numerous requests, havent got a lick of your experience. So little man, why dont you leave the business talk to the big boys.

9 years 46 weeks ago
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RiriRiri:

Get some air man.

9 years 46 weeks ago
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mike695ca:

"I might argue that you are working in one of the very few domains China can actually bear to have some foreigners involved in"

 

Which " very few domain" would you be refering too?  Would that be manufacturing and export? Is that the one? The one that is the entire basis of the economy except for construction?  

 

 you realize that every single post your  digging a bigger hole showing your lack of knowledge and in experience? That your opinion means nothing because you have no idea what your talking about?  A smart person would remain silent, but I expect more totally inaccurate retorts coming soon.

 

Dig up stupid!

 

9 years 46 weeks ago
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RiriRiri:

Get some air, really. Then maybe you'll stop projecting your insecurity with insults, then we can talk.

You make interesting comments when you're not on the defensive, but right now it's just sad to read you.

9 years 46 weeks ago
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mike695ca:

im sorry, i tend to get a little defensive when someone  with admittedly zero credentials has the nerve to question mine.  did you forget your little post demeaning my entire business? Yeah that doesnt stink of insecurities at all. Try to look at yourself before handing advice to others. 

9 years 46 weeks ago
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expatlife26:

yeah sounds like a typical defense mechanism I saw on another post couple months back:

 

"NOBODY does anything serious in China!"

 

No, YOU don't do anything serious in China and neither do the people you interact with.

 

"EVERYWHERE is better to start a business than China!"

 

I've sat in on discussions about diversifying production from China, and i'm sure MikeCA can back me up on some of this, China isn't perfect but the alternatives are  worse. Cost leader is pretty much Bangladesh, but they have sectarian violence and labor issues. India has god-awful infrastructure and is more corrupt than China.

 

China has a ton of positives...very stable power supply, generally OK labor relations for this part of the world and a pretty solid transportation system.

 

All the problems everyone is saying are endemic to China industry are also problems in every other Asian manufacturing country.  I mean do you think you can go to Bangladesh and set up a denim factory with absolutely zero risk of getting screwed by your partners? You can't. And unlike China the power won't stay on and you'll have to contend with anti-hindu riots and labor issues.

 

So where is a better place to start these kinds of businesses?

 

9 years 46 weeks ago
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mike695ca:

finally! someone that has a brain and experience has something to add.

 

Your 100% right about the electricity by the way. a major reason why shenzhen was chosen at a higher cost than other chinese cities. we spend over half a million on electricty a month. and we need a stable power source.  No other country has the logistic capabilties, the infastrucure and the resources. Which is why China is the place of choice. Vietnam, Indonesia, Even South America are decades behind and would cause many more headaches. Its so easy for people who have no idea what they are talking about to cling to  "corruption" as the be all end all of arguments. 

 

FYI Corruption is almost everywhere. 

 

So if our facility moves. And it might in a few years due to rising costs it will be to Buffalo or Detroit or somewhere. There is no other viable option.

9 years 46 weeks ago
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RiriRiri:

I'm a college dropout working as an ESL teacher on a family visa. Seriously, I'm out of the conversation, just too much insults slash arrogance, you can take this as a win if that helps you. Peace.

9 years 46 weeks ago
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mike695ca:

Well hell, I can respect that 100 times more than you pretending to know everything without backing anything up. Your enititled to your opinion just as I am. And mine is no more valid. I just take offence to your attacking my creds without any basis. Good day to you sir.

9 years 46 weeks ago
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RiriRiri:

No one has been attacking your creds, certainly not me at least. I wanted precisions because I suspected your answer wasn't relevant to the question. See the difference? I welcome contradiction but you are just being aggressive for no reason at all and this is not what I come here for.

 

I would like to answer your points, but not under those circumstances. By the way, the ESL part was irony, I'm not an ESL teacher, sorry for your patronizing attempt.

9 years 46 weeks ago
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mike695ca:

"I'm not doubting your honesty, but I don't think you have truly experienced anything relevant either." 

 

When In fact I may just be the most experienced person in this forum when it comes to business in China.  Im certainly not the only one. But various responsibilities I have would lead me to this conclusion from what I have read. Anyone is more than welcome to disagree.  Where you cant disagree is you attacking my creds. Its right there plain as day.  You dont think you have some nerve asking for precise credentials while having none yourself? At the very least , even if I had none, My opinion would still be no more right or wrong than yours. And you did come to my post. Its not like I came to yours and disagreed. 

 

Oh my bad, I just assumed you were because A you said it and B YOU STILL HAVENT GIVEN A SINGLE EXAMPLE OF YOUR WORK EXPERIENCE OR CREDENTIALS IN CHINA!! perhaps thats why. But good for you. I would just like to make it clear. Im kind of a dumb ass some times but i do have the memory of a freaking elephant. You better remember this post because I know I will. Im gonna be calling your ass out 2 years down the road if you slip up. so yeah FYI

9 years 46 weeks ago
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expatlife26:

Well listen you know I don't work in manufacturing but I know people that do and I like talking shop with them but everything I say is still second hand.

 

China actually has pretty good infrastructure...decent port facilities, reliable freight network. Hell even the corruption and lack of law in China can be mitigated through signing contracts wtih HK subsidiaries. 

 

That being said I don't think starting a business here is easy,  But M=most of the stories I read about somebody getting royally screwed here, they involve someone that was really in over their head AND especially naive. China is not forgiving of naivete. 

 

Take this story for example. 

 

http://space.echinacities.com/235677/blog/detail/1564

 

I feel so bad for that guy, i'm sure he's a decent person but even reading his version of what happened it's SO obvious all the mistakes he made. It's WRONG that he was put in that position, but he could have avoided it with just a modicum of common sense. 

 

If you want to start a business here you go into it with both eyes open You hire consultants and lawyers to make sure your bases are covered. You don't see GE posting angry blogs about how China screwed them or Sony putting out press releases lamenting how "We'll never be accepted as Chinese!" HINT: they're miserable, we're lucky not to be.

 

@riri, listen I can't speak for Mike or Rob but I'm not trying to be arrogant...it's just you were saying something definitive that was ill informed.

9 years 46 weeks ago
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RiriRiri:

Look, if you - could - understand what separates "I don't think your story is much relevant to the question because I don't think this is what the author was going for" and "I think your credentials are bogus please deliver your passport ID to me", we could be having an interesting conversation. A bit of adulthood so as not to take any counterargument too personnaly would have helped too, but I'm being picky I guess.

 

Well anyway, you don't, so we can't.

 

I should feel ashamed for sticking so long to this kind of pointless debate, but anyway there's no one left to give a shit at that point.

9 years 45 weeks ago
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mike695ca:

Ok lets just forget about the fact that your claiming to be above all this yet still trying to get the last word in days later. So lets all just pretend your not petty. Lets also forget the fact that clear as day you did talk about my creds. Your quotes have been highlightes for you. But you choose to ignore it as well as my constant requests for your credentials. But ok. Lets ignore that too. Forgetting all of that. Please explain how my post isnt relevant? Hes specifically asking about starting a business and whether he could go alone or find a chinese partner. Most people with zero first hand knowledge like yourself said its a no go. China will make you fail. I said that was overblown and i gave reasons why. So please again? Whats the point of your argument?

9 years 45 weeks ago
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RiriRiri:

Because by "business" you automatically assume "manufacturing and export". Which makes your answer partial no matter what. I know whatever you do must be the fucking most important thing in the universe, but there are still a handful of other (granted, very minor compared to Your Highness) activities one can do. And all things considered, China is just a global no no for business in 2014, especially for someone asking this question on a public forum.

 

But as I already pointed out, I'm not even disagreeing with what you say. You can make it out in your domain, no problem, especially since they're so desperate with their export figures. China is still the best choice if you want to get shoelaces or plastic caps out to whatever country, sure. I just would think twice before manufacturing my new model of holographic projector or whatever.

 

Oh, and by the way, I'm a translator and an interpreter (a licensed one). I work with various companies, governments, institutions and medias. So, I know what contracts, audits and lawsuits look like in mainland, and I have a rough idea of the good endings versus bad ending figures).

But I guess it won't be first hand enough because I haven't lost millions, right? Fortunately I'm registered in Hong Kong.

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I agree Mike, but honestly I, or no one else, will not start a business purely based on answers garnered here. I just wanted to hear some stories from people with experience, like you. But it did give me an idea of the most basic things to think about before starting. I'm not going to start a business as such, just start selling stuff on the side and see what happens. 

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Possibly... depends on whether I'm selling to locals, or buying from locals.

 

I know a couple of ppl trying to buy stuff here, and sell back home. There can be some good money made, if you pick the right product. However, good language skills are important! Expecting to get stuffed around by suppliers is mandatory. They have a very Chinese way of doing business... like, you only get samples when you lay down a large sum or money! (as against, a sample being something to convince you to lay down a large sum of money!!) That's arse-backwards!

 

If selling to locals - I'd be looking to get sell something very 'foreign'... something they can't get here. I'd expect a lot of mis-trust, due to the large number of fakes and rip-offs here.

 

Loyalty doesn't really exist here... it's all about what gives the most advantage to someone... and if that means stealing all your stuff and ideas to someone for  a fraction of an increase, most will do it!

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9 years 46 weeks ago
 
Posts: 448

Shifu

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Some of these issues happen to businesses own exclusively by Chinese. A few years back my long term gf was bored staying at home all day and wanted to start a clothing and shoe shop, mid-scale quality, South Korean and Japanese women's fashion. After much consideration I agreed to fund this start up endeavor with 100,000 RMB. I figured it would be money I would never see again, but made her happy and hell it was only 100,000 RMB. The store she rented was 10,000 RMB per month. She decorated the shop, painted inside and out. Added light fixtures, shelves, clothing racks.

 

Well she worked her ass off, built the business and in 3 months was earning 3000-5000 RMB gross per day. She paid me back in 6 months and business was booming, she was also expanding into more upscale lines. Now this did impact my life a bit as she now often was working until 9-10 pm and most weekends, but I figured once it was established and the girl she hired was trained she could go back to a more normal schedule. Well the help ended up robbing her by claiming she sold items at one price and pocketed the difference. When we suspected this we sent a series of shoppers in and confirmed it. Fired the girl and back to working all the time.

Then the landlord came around and informed her that since business was so good now the rent would increase to 50,000 RMB per month. Which basically put the business at or below break even. I finally convinced her to pull the plug instead of being robbed. A year has passed and she is itching to find a new location and go again.

 

For me it's nothing but a big headache. I make plenty of money, but she seems hell bent on doing this as she hates the idea of people thinking she is with me for my money.

brother1818:

The landlord increasing the rent... Makes me crazy! That is pretty shit man. It's something you couldn't guess would happen but when it does your not surprised. devil

9 years 46 weeks ago
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bill8899:

I have heard so many similar stories about landlords raising the rent to shutdown levels, and know two businesses where the same thing happened. Not to mention all the other ways to lose your shirt here.

They seem Hell-bent on destroying each other, more so laowai. Why anyone would open a business here is beyond me. 

The idea is so fraught with traps the question is effectively rhetorical. Of course there are exceptions, but they are exceptions. 

9 years 46 weeks ago
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expatlife26:

wow that really sucks...but that's not a regulatory issue that's just some shithead landlord (though there are a lot of them)

 

He's within his rights to charge whatever he wants, he's just willing to shoot himself in the foot to feel like he isn't being cheated/cut out of the profits from his property. Sorry you had to deal with that.

9 years 46 weeks ago
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Posts: 5539

Emperor

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Lies
Cheating
Scamming
Corruption
No rule of law
Unstable
Brain dead workforce
No!!!!

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9 years 46 weeks ago
 
Posts: 827

Shifu

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start a business, a massage business.  No paperwork.  But you will need to know some locals.  Do this for a month and reap the profits.S tart handing out red envelopes to to local officials.  That will take care of the problems for a few months. You might have to give a few massages to the wives of the local officials for free. But what the hell, its protection for your profits.  Then you leave.  I would also change your passport once you leave China.

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9 years 46 weeks ago
 
Posts: 2878

Shifu

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Theres tons of lucrative business opportunities, don't let alarmists WHO HAVENT RUN A BUSINESS scare you with rumors and assumptions

 

TONS of foreigners run pretty successful import/export firms, do very well here and basically never have to speak to a government official other than to file their taxes! Though it may be different for factories or other large-scale labor enterprises like mining that require more permits and oversight.

 

The key in being a success i've seen is just experience and having a market. There are people that think running a restaurant is really easy for some reason. HINT: It's not. 

 

If you're going to start a trade company the most important thing is having customers. Some of the guys who have made their fortunes here have a brother or full partner back home that handles distribution. I mentioned in my blog that I knew somebody who thought he could sell car batteries and it was as easy as buying them and mailing them to the US. It wasn't and he lost a lot of money. If he had a friend back home whose dad owner a couple garages to get some initial cash flow from he could've done better.

 

I mean smart has nothing to do with it, business success comes down to a bunch of practicalities...like do you have customers? Do you know how to fill out the customs paperwork? It's why an African dude with no formal education can be making a mint shipping goods back home to a network of merchants he's enlisted and an American with a business degree can waste thousands of dollars stupidly mailing batteries around.

 

You just need to look at how you can overcome these practicalities. Bring in a partner only if you need their expertise, for example if you know a Chinese guy with 10 years of expertise in supply chain/quality control for the furniture industry and you want to start moving desks.

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9 years 46 weeks ago
 
Posts: 19

Governor

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If I didn't have a local partner I would never start a business here. That would be complete madness. Might as well just bring your money to Macau and play the roulette.

 

Spend time finding the best possible partner here. And when I say time I mean a long time, because this is the most important decision you'll make in your venture. Took me almost 3 years to find my partner. I let him handle everything related to paperwork, government liaison, and negotiations (real-estate, business contracts etc), because 1) I have nothing valuable to contribute to those processes and 2) once they see my white face their asking price for whatever they're offering will sky-rocket. I stay in the background and focus on developing and offering our core product. A good business partner and a sensible division of labor is a decent starting point for a business in China.   

mike695ca:

I mean this with no ill will, as I know zip about your company. But I have seen this often. The foreigner works on products or design. ie a hobby and the chinese partner does all of the shit work.  And people wonder why the Chinese partners are unreliable.  The fact is they are usually more reliable than the foreigner , they just get tired of the bullshit and feel entitled to more than their fair share, as they have done more of the work. 

 

Im not saying your company directly, but at face value, it seems to be another situation. Hopefully you did choose the right partner and the division of labour is infact equal, and you both can prosper. Good luck!

9 years 46 weeks ago
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crimochina:

Mike:what you are saying is complete nonsense. Product design is a hobby? Tell that to jobs. And that is actually what sells and keeps the customers coming. Why is starbucks a success? Paperwork or the product and service?

9 years 46 weeks ago
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mike695ca:

@crimo. Im not saying product design is a hobby. Not at all. I am saying when you start a company with 2 people  and one does product design on a computer for a few hours a day and your chinese partner does EVERYTHING ELSE. your inevitably going to run into issues. 

 

We are not talking about Apple here with huge departments solely for design. We are talking about startups in China.  Design is nothing if your not going to do any work. 

9 years 46 weeks ago
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crimochina:

Dude, you seem very smart but the product is the most important thing. And each partner should be working where they are strongest. In a weird round about way you are justifying the chinese practice of stealing the designs and freezing out the foreign owner. ideas are valuable. Marketing is secondary. The legal and paperwork is just a necessary evil. What the foreigner brings to the table may not be time consuming but it is more important. Ideas quality and standards and keeping to those standards without taking shortcuts to save a buck. It is usually the foreigner that keeps the company from screwing over their customers.

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A:  "... through ..."?  Only "through" comes to mind is "S
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