Many managers find it hard to answer the question why one would want to do business in China. Doing business with China seems to be an integral part of our everyday life. The late Deng Xiaoping’s plan seems to have worked. Capitalism has found its way into the now politically stable China, which is led by a communist government. Joining the Chinese economy has proven to be not an easy task. Cultural and language barriers present formidable challenges. I would advise anyone who would like “to do something in China’’ to get at least some level of knowledge of Chinese culture, history and language. Do not merely visit major cities such as Beijing, Shanghai and Guangzhou but also discover the Centre (e.g. the Sichuan province) or the West (e.g. Xining). This will expose you to the true not yet westernized culture and you will find that there is no such thing as one single Chinese market.
From the perspective of market potential, these areas may seem insignificant. The majority of market potential is found within a mere 2% of China’s total surface area. This centre of gravity is formed by Hong-Kong and its Pearl River Delta and Shanghai and its Yangtzekiang delta. These areas account for 50% of China’s Gross National Product which also is generated by only 10% of the residents of this area. In fact only around 5-10% of the Chinese population can afford ‘’western’’ products. These are interesting figures that are undergoing continuous and major changes.
