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Is It Still Worth it to do Business in China?  Conclusion

Is it worth the effort and investment for foreign firms to do business in China?   The answer depends on who you are and what you want from the market – and that’s a problem.

I spent a month in China trying to answer the question, “is it still worthwhile for Westerners to try doing business in China?”   The international business press has been focusing on Beijing’s prosecution of the infamous Anti-Monopoly Law  and use of national security claims   to restrict foreign firms’ access to China’s burgeoning middle-class markets.  Overseas readers of the WSJ and Forbes could easily get the impression that foreign brands are being chased out of China on a tide of xenophobic resentment and anti-foreign fervor – but it’s simply not the reality on the ground.

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ChinaSolved International Negotiators’ Guide to China 2014.

The trade relationship will grow incrementally more challenging and MNCs may finally air their grievances in public.

2014 will be challenging for international negotiators in China, but not particularly unstable or erratic. An unsettled economy in China will bring out protectionist impulses in Beijing Sign up for the ChinaSolved newsletterbureaucrats, who will be increasingly defensive and conservative about what happens within their borders while at the same time becoming more ambitious and assertive in their dealings abroad.

Access to the the Chinese market will become a touchier issue for deep-pocketed MNCs, who will exhibit a greater willingness to go public with their complaints about market access to China — and may even mobilize connections at home to limit Chinese access to western markets. China in 2014 will continue its trend of greater nationalism, protectionism and defensiveness, but shouldn’t hold too many surprises for experienced international businesses. Savvy negotiators will find ways to turn bureaucratic heavy-handedness to their own advantage by offering Chinese partners help moving offshore to more attractive, less restricted markets.

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3rd Plenum Wish List – and Won’t List

No news will be the best news for international managers in China

Even optimistic predictions about the upcoming 3rd Plenum are pretty downbeat for the Sign up for the ChinaSolved newsletterforeign business community – which has not been enjoying Xi JinPing’s administration as much as they had hoped.  Headlines about scandals, corruption charges and villifications by the official press have been bad news for individual MNCs like Starbucks and GlaxoSmithKline.   Worse news lurks beneath the surface in a series of trends that have the potential to tip the financial balance against a China investment.   Regulatory mechanisms that are unfair and worse – unpredictable, visa policy that is restrictive and cumbersome, inflation, hyper-competition and HR bottlenecks are the biggest complaints.

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Your First China Deal

Chinese are initiating more and more deals with Westerners, both at home and abroad. A Chinese entrepreneur or SOE representative might be on his way to your office RIGHT NOW - and he is ready to charm your sick-of-the-recession-socks off with El Dorado stories of 1.3 billion consumers and great connections. Before you go chasing China market dreams, do a quick reality check and figure out if you are ready to swim in the deep end of the shark tank.