One topics addressed in the report concerns the legal form of a Chinese establishment, such as “Wholly Owned Foreign Enterprise” (WOFE) or “Joint Ventures” (JV). A WOFE is restricted to the export business, while a JV is also allowed to serve the domestic market. Other topics concern the choice of the geographical location. A few large cities – such as Shanghai or Shenzhen – are particularly advantageous for foreign firms.

Among the many challenges facing foreign investors are, cultural differences, governmental bureaucracy, the nature of contractual arrangements, patent violations, quality assurance, immature and fragmented market, mounting oversupply of furniture and growing competition, and more. None of these challenges are insurmountable if they are properly understood and handled accordingly.

Investing in China requires a long-term commitment to establish relationships, train employees, and develop the market. The report concludes that companies with this long-term commitment should enter the Chinese market rather sooner than later. Future rewards may be substantial.

Disclaimer: This report is an MBA thesis by Mr. Hongwei Zhao from the University of Birmingham (UK). We believe that the price for this study represents good valua for the information provided. Nevertheless, it is published without responsibility of AKTRIN in regards to coverage, accuracy and linguistic style.