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February 10, 2009

Simple poll shows some are struggling to do China deals — while others are working harder to get paid for deals they thought were done.

I’ve been running an informal, non-scientific survey on the ChinaSolved linkedin group asking the question: What is the most difficult aspect of doing business deals in China? I offered 5 answers which would correspond to a general flow chart of a developing business deal.

1- Finding an appropriate counter-party 2 – Agreeing to clear deal terms 3 – Finalizing the deal and signing contracts 4 – Executing the deal (starting the actual business) 5 – Post deal compliance / QC

It’s been a five days and I’ve managed to gather 58 responses.

The general overall results are:
We’re seeing a lot of trouble at both extremes — starting the deal and managing post-deal compliance are both troublesome. This is a very naive, generalized view that is probably the source of many misconceptions about business in China. The problem? Newcomers and old hands are both showing up in the results and making it appear that there are friction points across the board. In fact, it seems that more experienced China hands are finding that it is much easier to start negotiations than to successfully conclude them — and that getting paid (or maintaining a profitable relationship) are harder still.

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