Business Economics
Being the fastest growing economy globally, China continues to provide global corporations with attractive business opportunities and investments (Solomon & Schell, 2009). However, conducting business in China additionally implies the navigation through complexities that come from the China’s Customized political, cultural as well as historical contexts. China offers extensive opportunities for fresh economic ventures given that the market in the state continues to increase by approximately 7 percent each year thus China is currently the second leading economy globally after the United States (Solomon & Schell, 2009). However, with higher opportunities there comes extensive challenges. Therefore there are some significant risks and challenges that might be considered both in the political and cultural context in China in achieving business success.
Business individuals must possess a certain degree of sensitivity in regard to the Chinese culture and the manner in which it impacts business performance. Hierarchy is an aspect that plays an essential role in relation to China’s business culture as managers and leaders are highly distinguished as compared to the western states such as the United States (Mongay, 2011). Reputation is of the essence and business leaders in China necessitate obedience without any form of a question. Face depicts the individual’s reputation and the sensation of prestige within the working surrounding and society in general. On the other hand, a subordinate in the United States would never hesitate to ask questions to the boss during meetings presentations or even disagreeing with certain thoughts (Mongay, 2011). In China, however, this is considered to be a severe face-loss. In this context, one should not point on others flaws and should seek to offer credit to their efforts which are the desirable approaches of saving an individual’s reputation and prestige. In China corruption has become one of the major issues within the business sector given that it denies individuals the opportunity to acquire trade liberation (Mongay, 2011). This differs from the United States where the rate of corruption is particularly low which makes the surrounding favorable in conducting businesses.
Given that China has in the past suffered from exploitation by foreigner being from the western states requires a demonstration of respect. Time is of the essence and one should attend meetings at the stipulated period (Guo, 2013). Individuals should be addressed with designation and demonstrate high-interest degree in regard to the local culture as an approach of showing respect. Western businesses often move to the foreign markets in the quest of saving costs but for China, the operative expenses are growing rapidly given that foreign companies are required to pay for urban maintenance, education and infrastructural constructive since the commencement of December 2010 (Guo, 2013). An additional risk of operating in China is the increasing employees’ salaries and the high rate of turnover, particularly in major cities. These factors result in the rise of companies operating expenses because workers are to be paid higher wages, train as well as hire fresh staffs due to the frequent turnover (Solomon & Schell, 2009). Business in China tends to take longer duration as compared to the United States given that they value negotiation and detailed communications while in America time wasting is never encouraged while making business deals.
In summary, despite the fact that China is the fastest in economic development currently its cultural and political situations are different from that of the United States. Despite the extensive, a number of risks related to conducting business in the region should be considered which includes, cultural uniqueness, timing, negotiation, and communication. Unlike in the United States, subordinates are not allowed to question or even disagree with ideas raised by their leaders as this might result in severe image destruction. Therefore cultural understanding and respect are of the essence in acquiring business efficiency in China.
References
Guo, S. (2013). Political science and Chinese political studies: The state of the field. Berlin: Springer.
Mongay, J. (2011). Business and investments in Asia: New challenges, new opportunities. Madrid: ESIC.
Solomon, C. M., & Schell, M. S. (2009). Managing across cultures: The seven keys to doing business with a global mindset. New York: McGraw-Hill.
