Teng Bingsheng, the associate professor of strategy management at CKGSB and the associate dean responsible for the CKGSB MBA program visits Korea to celebrate the 10th anniversary of CKGSB and gives advice how to make inroads into Chinese market successfully.
He said, "It is true that China has confronted bottle neck issue, and the market growth slows down and business ethics is vulnerable. But, if Chinese government keeps trying to improve the market economy system and upgrade its level to developed countries, China will give an incomparable business opportunity in terms of growth, flexibility and economic size in future."
He added, "China is very rough market with uncertain numbers. When you enter into the market or acquire a company, you have to research thoroughly, and operate a joint venture in short to mid-term and plan an escape in advance to prevent failure."
When it comes to Quanxi (关系), he said it has not been required from all industry. Such as information technology industry is open and free competition market in China too, so quanxi doesn’t play a significant role and is no longer a prior condition to do a business in the industry.
In addition, to acquire Chinese company successfully, need to not to get public's attention and keep a low profile because Chinese are sensitive whether a foreign company damages their local brand or not.
Regarding how to make a joint venture (JV) successful, he advises that recognizing a partner's will and reputation is critical. Furthermore, he stressed to remember Chinese business ethics has not formulated well and do not think the JV relationship in long-term. Set operation term in three to five years when you establish a JV, and take a break when a period of JV ended and consider continuity of relations.
Read the full article here (Korean)