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Business Business Profile China’s economy is generally doing well despite the downturn elsewhere in East Asia, which seems to have had little effect on business here. Beijing’s Gross Domestic Product grew by 8.1% in the first few months of 2001, continuing on from the healthy growth of the previous year. Much of this is attributed to the Chinese spending more on housing and transportation. Retail sales have also increased during the same period – by 10.3%. The impact of China’s entry into the World Trade Organisation (WTO) at the end of 2001 has yet to be assessed. It took 15 years of negotiation for China to join the WTO giving it access to lucrative global markets, as well as opening up its own markets to foreign companies. In the short term, there could be widespread unemployment as the government ends its protectionism of its state-run industries and sharpens their competitive edge, which has already resulted in increased profits. In the long term, more jobs could be created as foreign companies invest in China, no longer having the frustration of years of red tape and uncertain profits. Many areas of China, especially in the western and central parts of the country, are struggling (often with dire human consequences) to adjust to the demands of the market economy introduced by the government in the 1980s but Beijing is still leading the country both economically and politically. A major factor in Beijing’s continuing prosperity is the city’s IT and telecommunications industry, which is the best developed in China: an infrastructure of more than one million kilometres of optic fibre within the city serves almost six million local telephone subscribers. One reason for the foreign business presence in Beijing is that it is a key entry point into China for foreign investors. The long list of premier international companies with a presence in Beijing includes Hewlett Packard, IBM, Microsoft, Fujitsu and Motorola. Shanghai and Shenzhen may contain China’s leading stock markets, but since all political directives still originate from the capital, it makes sense for overseas firms to be near the centre of Chinese power so as to have access to the key decision-makers and planners of the economy. Large international insurance companies, such as Sun Life Assurance, are now beginning to look at China with interest. The Chinese authorities estimate that 3.6% of Beijing’s seven million workforce is unemployed, however, this figure does not take into account the city’s population of rural migrants or those not working but still on the payroll of state-owned companies. Independent analysts say that if such workers are taken into account, the true number of unemployed is about 10% of the workforce or up to 700,000. Beijing’s key business districts are Chongwen in the east, close to the China World Trade Centre; and Wangfujing, just east of Tiananmen Square, which is where the Bank of China and the Xindongan Plaza, Beijing’s first indoor shopping mall, are located. Business Etiquette When it comes to conducting business in China, infinite patience is the key. To many foreign businesspeople, the protracted pleasantries at the beginning of each meeting, the drawn-out negotiations where each minor point is discussed at length and the seeming reluctance to close the deal can be very frustrating indeed. The only way to deal with this is to allow plenty of time for discussion and negotiations and ensure that every important condition is included in the contract as the Chinese will follow it strictly once business has been concluded. Chinese businesspeople are very formal and a smart, sober suit is a must, as is the all-important exchanging of business cards. When exchanging business cards, it is polite to use both hands to do so. Cards should be printed in English on one side and Chinese on the other. The person who extended the invitation should pay the bill for business meals. When visiting a business associate’s house, a modest gift, such as chocolates or any kind of flowers, is appropriate; visitors should avoid giving expensive gifts and giving money is considered an insult. Business hours are usually 0800-1700 weekdays, with one or two hours for lunch. Businesspeople visiting Beijing will find the monthly magazine, Business Beijing (website: www.cbw.com/busbj), of interest. |
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