Dennis Gillings, CBE, Chairman & CEO of Quintiles and Jin Li, director of medical oncology, Shanghai Fudan University Cancer Hospital as part of the company’s delegation to Shanghai in January, 2011
Top 10 Findings: Creating a Winning Business in China
Published in the News & Observer
http://www.newsobserver.com/2011/10/02/1530065/cree-nurtured-its-ties-in-china.html
Companies should educate themselves about the central government’s policies toward their particular industry and also the local government’s role in regulating their business. While the central government is still the ultimate decision-maker, local authorities are powerful, and the interplay between both can be convoluted at times. Keep in mind that courts are all about "stability", not justice in conflict resolution.
Despite the success of the “Open Door Policy” over the last three decades in attracting large numbers of foreign companies, many Western businesses still face political and regulatory obstacles, such as restrictions on ownership rights and protection of intellectual property. These challenges can result in firms having to spend an unanticipated and disproportionate amount of time working with Chinese authorities.
The degree of economic ownership and product restrictions imposed by the CCP varies by industry. Generally, the media and telecom industries have more government restrictions than consumer goods. In sharing the contextual background of China, Wollman of Quintiles shares that "regulatory timelines are long and unpredictable." "Our growth in China has been slower than other emerging markets."
A recent campaign of “indigenous innovation” has increased government support for local companies in many sectors. A timely example of the central government’s influence on a foreign company’s operations is Google's decision to relocate its Mainland China search service to Hong Kong after losing its censorship battle with the Chinese government in early 2010. After its move, Google’s user base in Mainland China decreased by 50% as it ceded market share to leading Chinese language internet search provider Baidu and its U.S. partner, Bing.
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