Foreword by Peter Pronk
For more than 19 years I have intensively visited, lived and worked in this beautiful country called China. Many westerners tend to focus on the differences and on comparing how things are going at “home”. Whilst working here I see the beauty that China brings to us. Our 1421 team is dedicated to support Western companies entering the China market with the important task of explaining the differences. Pointing out the beauty and endless possibilities in China is very important. It is a fact that 80% of the Western companies is still failing within the first 3 years after coming to China. Trust me, this is not completely because of China but also due to the lack of adaption towards the Chinese way of doing business.
Over the last year 1421 Consulting Group did research on another very important market in China, namely the 20% who “survived” the first three years. If you are still around after the first 3 years it can mean that you hit the right note, found the right partner, you were fully prepared, you had patience but above all;
YOU UNDERSTAND CHINA
Do we congratulate you with this? Of course we do. As the famous soccer coach Arie Haan stated; “You cannot change China, but China will change you”. Now you are here for over 3 years, you make money, you expand, you have a good team and you are even used to the differences between the 2 worlds. The question we challenge you to ask yourself is “Am I still Chinable?” China is changing as a country; the government is increasingly checking companies on the compatibility of the Foreign Invested Entity (FIE) regarding Chinese rules and regulations. So important questions western companies should ask themselves are amongst others; are your permits all up to date? You have signed the many documents in Chinese that your finance department asked you to do as legal representative? Have all required taxes been paid? Have all certificates been applied and approved for? In other words; when did you do a checkup?
In cooperation with our partners R&P Lawyers and VISTRA Shanghai, 1421 developed an effective Chinable Business Scan (CBS) and we would like to bring this scan to your attention. Any CEO, shareholder and or other stakeholder will tell that their company is fully organized and all is up to date. We trust her or him on his honesty, but can the foreign stakeholder really know? We have survived the first 3 years in China because we accepted the different ways of doing business. Why should we stop doing this after you became one of the 20%!
We challenge you, as stakeholder, CEO and or manager, to invite one of our senior consultants to visit you and explain the CBS in detail. We are confident you will agree that a checkup on doing business in China is essential to stay successful in China.
Peter Pronk