Day 19

Today we had IS lessons in the morning and the topic today was about introduction to business in China.

I found somethings very useful from today's lesson. For instance, why should we expand our business in China.

China is quickly transforming into a mass consumer market and some people may even say that it is even going to overtake the USA. Whether you have been in business for a long time or a short time, if you ask an experienced person when is the best time to enter the china market, he'll definetely say now. This is because China's market is slowly growing. Be it in the service industry or product related industries, it is wise to enter China's market now.

As Chinas population is one of the worst largest, expanding a business here will prove to be a good idea. Labour costs and manufacturing costs wouldnt be as expensive as doing business in Singapore because if you want to expand your business in Singapore, the facilities might be more expensive to built and morever land is more expensive in Singapore.

There are three major growth industries in China. It includes the exporting of education, processed food and wine products. They have many potential in generating even more profits as compared to other industries here.

Do all of you know what kind of businesses can be set up in China?

There are a few, representative office, joint venture,etc.

Let me briefly talk about them.

A representative office is just a subsidiary of a foreign company in china. If you are looking for a company, which needs a local presence to manage services or coordinate outsourcing business activities or research developing chinese market, then a representative office will definetely be the right choice because it is useful and inexpensive for establishing a presence in china.

A joint venture is business where a foreign firm goes into businesses with local chinese partners. Joint venture is usually established to exploit the market knowledge, preferential market treatment, and manufacturing capability of the chinese side along with the technology, manufacturing know-how and marketing.

Even if you know what businesses you want to set up, there are many things to consider. How will you want your company to be known?

You may want to choose technology transfer or E-commerce. But personally, i think that E-commerce will be a better way because now, E-commerce is being used almost all around the world for businesses.

Technology transfer is an initial market entry approach used by many companies. It offers short- term profits but there is a risk of creating long term competitors

E commerce: the e-commerce environment is still fairly immature due to the lack of defined regulatory powers over the industry, effective chinese certificate

I think that in China, though e-commerce is still fairly immature, it will be more popular and used more commonly with the passing of time and it will do great for businesses who want to enter China's market.

After IS lesson, we headed back to our rooms.

Reflection
Today, we were told by our teacher that an average graduate earns about 1.8k-2k rmb per month for their starting pay. It was rather shocking to hear that. In singapore, an average university graduate's starting pay is about 2.5k and above sgd, that is about 12.5k rmb per month. I feel very lucky to be born in Singapore. Even though Singapore is a small country, it is rather well known throughout the world and its currency is also strong. Singapore is our homeland and I'm very proud to be a Singaporean.

Though doing a business in China may prone to make profits, there are also disadvantages of doing businesses in China.Here are some disadvantages.

Firstly, the language barrier. In China, even though its main language is Chinese, it will be good to be able to be able to speak english. This is because usually when people do businesses, they tend to converse in English because english is a universal language. If you do businesses in China, it is best to speak simple english if the people you are working with isn't very good in english. This is to avoid misunderstandings that might arise due to communication issues.

Secondly, quality. Things may appear to look attractive but the material which is used to make the product may not be of good quality. Therefore, it is better if you understand what materials products are made from before buying them and selling. Normally, quality is a normal disadvantage in doing business in china that people has to stress over and over again.