Disadvantages of Doing Business in or With China
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1. Are there any disadvantages when doing business with or in China?
2. What would happen happen if a Guanxi relationship fails or breaks? How can foreign companies restore this relationship? Can they continue to do business?
3. What are the risks incurred with doing business in or with China?
Please explain briefly each question.
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Solution Summary
This is a discussion on the risks and challenges of investing in business ventures in China.
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1. Are there any disadvantages when doing business with or in China?
Shivnani, Manoj (n.d.) said that the three main disadvantages with doing business in China are: a.) English language is not widely spoken: Their listening ability of the language is "quite poor", b.) Inability to value life time customer: The Chinese have a very short-term mentality due to mostly cultural, and historical factors. Due to this they don't see the business relationship as long term, and c.) The meaning of quality: The Chinese are notorious of making inferior products.
2. What would happen if the Guanxi relationship fails or breaks? How can foreign companies restore the relationship? Can they continue to do business?
Kwintessential Ltd (2012) has these notes about "Guanxi":
"'Guanxi' is one of the most powerful forces in Chinese culture. It does express the relationship of one person to another or one party to another.
"If one has "guanxi" with another, one will be quick to do a favour, act on another's behalf and ...
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