Orientation China Guidebook: Leading You to Business Success
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Orientation China Guidebook - The American Chamber of Commerce in Shanghai
About AmCham Shanghai
The American Chamber of Commerce in Shanghai, known as the Voice of American Business in China,
is the largest and fastest growing American Chamber in the Asia-Pacific region. Founded in 1915, AmCham Shanghai was the third American Chamber established outside the United States. As a nonprofit, nonpartisan business organization, AmCham Shanghai is committed to the principles of free trade, open markets, private enterprise and the unrestricted flow of information.
Vision: The American Chamber of Commerce in Shanghai strives to be the leading international business association in China.
Mission: To support the success of our members by promoting a healthy business environment in China, strengthening U.S.-China commercial ties and providing high-quality business information and resources.
Join AmCham Shanghai
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Stay informed about business trends and updates of doing business in China by reading various business reports and publications
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The American Chamber of Commerce in Shanghai
上海美国商会
Orientation China
Guidebook
THIRD EDITION
DIRECTOR OF COMMUNICATIONS & PUBLICATIONS David Basmajian
EDITOR Bryan Virasami
COPY EDITORS Ryan Balis and Erika Wang
AMCHAM SHANGHAI
PRESIDENT Brenda Foster
VP OF PROGRAMS & SERVICES Scott Williams
VP OF ADMINISTRATION & FINANCE Helen Ren
DIRECTORS
BUSINESS DEVELOPMENT & MARKETING Patsy Li
COMMITTEES Stefanie Myers
COMMUNICATIONS & PUBLICATIONS David Basmajian
EVENTS Jessica Wu
GOVERNMENT RELATIONS & CSR Steven Chan
MEMBERSHIP & CVP Linda X. Wang
YRD CENTER Jonathan Shyu
Shanghai Centre, Suite 568, 1376 Nanjing West Road, Shanghai, 200040 China tel: (86-21) 6279-7119 fax: (86-21) 6279-7643 email: editor@amcham-shanghai.org www.amcham-shanghai.org
An AmCham Shanghai Publication
Orientation China Guidebook
Leading You to Business Success
THIRD EDITION
CONTENTS
About AmCham Shanghai
Note from the Editor
FIRST STEPS
1 MARKET TRENDS: Keeping track of the business climate
By David Basmajian, AmCham Shanghai
2 THE BUSINESS STRUCTURE: Three approaches to entering the Chinese market
By John Leary and Sherman Deng, White & Case
3 RISK MANAGEMENT: Reading backwards to assess risk
By Kent Kedl and Neal Beatty, Control Risks
4 TAX CONSIDERATIONS: China tax and business structure issues
By Jie Liang, Angela Pan and Eric Sun, Deloitte
PREPARING TO LAUNCH
5 SITE SELECTION: Developing a facility
By John Thompson, SSOE
6 WHAT CONSUMERS WANT: The new China opportunity
By Kunal Sinha, Ogilvy & Mather
7 HUMAN RESOURCES: Finding the right talent
By Helen Tantau, formerly of Spencer Stuart and Richard Zhu, Spencer Stuart
8 REAL ESTATE: Procedures and common practices
By James Allan, Jones Lang LaSalle
9 THE WEB: Thinking social in China
By Greg Paull, R3
RULES OF THE ROAD
10 WORKING WITH THE CHINESE GOVERNMENT:
A roadmap to government entities
By Ken Jarrett, APCO Worldwide
11 EXPORTING TO CHINA: Practical advice for American SMEs
By William Brekke, U.S. Commercial Service
12 LABOR: Employment Law in China
By Gordon Feng and Erika Collins, Paul Hastings
13 TEAMING UP: Finding a business partner
By Christopher Wingo, China Sage Consultants
14 CUSTOMS IN CHINA: Understanding the regulatory environment
By Damon Ross Paling, PwC
ON THE GROUND
15 CULTURAL EQUATION: Get lost in translation
By Wendy Radtke, Goodyear
16 SMALL BUSINESS: Opportunities and challenges
By Eric Meng and Kirt Greenburg, AmCham Shanghai
17 THE Yangtze RIVER DELTA: a second home for U.S. companies
By Jonathan Shyu, AmCham Shanghai
18 BUSINESS AND SOCIETY: Not evangelizing CSR
By Bill Valentino
19 MOVING TO CHINA WITH CHILDREN:
Relocating a challenge for the whole family
By Jackson Teubert, Community Center Shanghai
U.S. Government Diplomatic Posts in China
Note from the Editor
Welcome to the third edition of the Orientation China Guidebook , a publication we hope will serve as a practical resource for newcomers to China, as well as those already here and looking to understand some of the complex topics we tend to take for granted back in the United States. While some of our more enterprising readers and AmCham Shanghai members may relish the challenges of navigating the unique obstacles that come with launching or expanding a business in China, most prefer some help and guidance, hence this book.
Outside of the corporate boardroom, the challenges of living and working in China can be a little daunting. In the first half of 2013, it felt like we were bombarded with news about food safety that made dining out feel like a gamble. And in certain cities, air quality made breathing a little more taxing. We can’t offer any solutions to these problems but we’re trying to add some perspective to other concerns. In this edition, we’ve included a few new chapters - one about bringing children to China - and another about the cultural issues that even the most seasoned executives should weigh and consider before getting off the plane at Shanghai’s Pudong International Airport.
This book wouldn’t have been possible without the contribution from AmCham Shanghai members. We’ve included content from seasoned experts in a variety of areas such as the rapidly changing field of HR, marketing to Chinese consumers, real estate, taxes and perhaps one of the more intimidating things about doing business in China - dealing with the Chinese government. We thank all of our contributors and supporters.
Bryan Virasami
Editor
FIRST STEPS
Chapter 1: MARKET TRENDS
Keeping track of the business climate
By David Basmajian, AmCham Shanghai
Chapter 2: THE BUSINESS STRUCTURE
Three approaches to entering the Chinese market
By John Leary and Sherman Deng, White & Case
Chapter 3: RISK MANAGEMENT
Reading backwards to assess risk
By Kent Kedl and Neal Beatty, Control Risks
Chapter 4: TAX CONSIDERATIONS
China tax and business structure issues
By Jie Liang, Angela Pan and Eric Sun, Deloitte
MARKET TRENDS
Keeping track of the business climate
BY DAVID BASMAJIAN
C hina — where anything is possible and nothing is easy.
It may sound like a cliché but it’s also a common refrain among business people competing in the China market. Without a doubt, the opportunities for U.S. companies competing in China are truly historic. The size and diversity of the membership of AmCham Shanghai reflects that - nearly every Fortune 500 company has some presence in China and SMEs are the fastest growing segment of the U.S. business community here. Yet in conversations with AmCham Shanghai members, most share the sentiment that China is also among the most challenging markets in which they compete.
David Basmajian is director of Communications and