Operating Business In China Essay

8213 words - 33 pages

1. Introduction.The Viewpoint by Siva Yam (Establishing Entities in China: 2002:1-2)Siva Yam who is President of the U.S.-China Chamber of Commerce. He is also Managing Director of Siva Yam & Associates, L.L.C., a private investment banking and consulting firm that specializes in micro and middle market companies that invest in China.Siva framed his presentation with the statement "everything in China is illegal until proven innocent," to underscore his sentiment that "the people in China who make money are the ones who give the approvals [to do business in the country]."Siva supported his opening remarks with the historical fact that China suffered 200 years of political turmoil ...view middle of the document...

"You cannot evaluate machines, property, or intellectual property. You can only evaluate cash." He also warned that "selling old technology to China doesn't work, since China wants technology transfer." Siva said joint ventures also have substantial government involvement. Also, the Chinese side of a joint venture can veto Western partners who wish to sell off assets or ownership.Siva offered that Wholly Owned Enterprises (WOEs) work better for foreign companies investing in China than do joint ventures. Many industries are still prohibited from forming WOEs, including news media, publishing, domestic commerce, and telecommunications among others, according to a white paper prepared by Siva Yam & Associates. The white paper, entitled "Establishing Entities in China," was included in the Conference proceedings. WOEs with advanced technology and/or that export their products may see tax privileges they wouldn't under other business structures. Siva pointed out, however, that "Western investors still may need to convert their China company from a WOE "to an offshore-based entity to get their money out [of China]."Siva concluded his talk by giving advice on how to do business in China. "You need to collect information, which is the most important thing. You need to understand the players." He continued that China has an extensive approval process, so "you need to know high to low: all the players," he emphasized. "Eat dinner; sing karaoke with these people to understand everything." Western operators must personally attend to details, determine what is real and unreal in doing business in China, and be very patient.2. The Case Study: Nokia2.1 Nokia in Brief"Our mission of connecting people is more than just an advertising buzz phrase. It describes what we do. It says what benefits we bring to our operator and enterprise customers, to consumers and to society. It says who we are and what we represent. It is our compass; we use it to drive our business forward and to deliver value to our customers."--- Jorma Ollila, Nokia Chairman and CEO (European, online, 09/2005, 17:50pm)Nokia is the world leader in mobile communications, driving the growth and sustainability of the broader mobility industry. Nokia is dedicated to enhancing people's lives and productivity by providing easy-to-use and innovative products like mobile phones, and solutions for imaging, games, media, mobile network operators and businesses.In 2004, Nokia's net sales totaled EUR 29.3 billion. The company has 15 manufacturing facilities in 9 countries and research and development in 12 countries. At the end of 2004, Nokia employed approximately 55,500 people. Nokia is a broadly held company with listings on the Helsinki, Stockholm, Frankfurt and New York stock exchanges. With a leading brand, strong product offering, advanced technology, and unique corporate culture, Nokia is well placed to usher in a new era of mobile communications (European, online, 09/2005, 17:50pm)2.2...

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