The Pros and Cons of Doing Business in China

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The Pros and Cons of Doing Business in China | FutureBusiness

Whether you’re looking to take your business abroad, or expand to trade on an international level, there are plenty of locations around the world that can offer companies a lot of benefits and options that make the time and expense worth the effort. China is one destination that can be very appealing to businesses looking to head overseas. With a population of more than 1.4 billion, a rapidly growing middle class, and recently more flexible economic conditions and restrictions – it is one of the most lucrative international markets in the world.

There are benefits and drawbacks to doing business in China, and it’s absolutely essential that these are addressed, weighed, and understood before any sort of expansion or relocation should occur. This list isn’t exhaustive by any means, but we’re going to cover some of the most notable pros and cons that you’ll need to be aware of.

The Benefits of Doing Business in China

Reforms are Improving the Ease of Business

In 2019, the World Bank ranked China as one of the top 10 ‘most improved economies’ in which to do business, and reforms across the board are making it easier for foreign businesses to trade both domestically and internationally. Some of the most prominent reforms have included improvements to:
– Business registration and licensing processes
– Permit process for construction and infrastructure
– Corporate tax systems which prioritise savings for small businesses
– Import and Export systems
– Insolvency proceedings

National Investment in Innovation

The Chinese investment in innovation is a commitment that is taken very seriously, with innovations drawing attention to the growing market, and seeing technological improvements, employee development and idea recognition, and a willingness to accept external innovations if they prove beneficial to the internal structure.

Proven Market Stability

The Chinese business market has been growing at a steady rate for an extended period of time, which makes expansion to the destination less uncertain and easier to predict.

Comparable Tax Rates

Although the Chinese corporate tax rate is typically 25%, which is higher than areas such as the UK, it is much less than India, Mexico, or Brazil, and can allow for greater profits on goods that would otherwise be taxed at higher rates in these areas.

Ease of Access for Import and Export

China is home to a large number of world-class seaports, which makes it considerably less difficult to move products back and forward.

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