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Risk is a major reason that companies fail in, or fail to enter, China. Packed with case studies, this unique book demonstrates how correctly applied due diligence can not only reduce business risk in China, but also provide excellent business intelligence to support negotiations and business relationships.

Inhaltsverzeichnis

Frontmatter

Introduction

Abstract
Risk is a major reason that companies fail in, or fail to enter, China. But, as the business pages of the world’s newspapers proclaim on an almost daily basis, business risk is a global phenomenon that cannot easily be constrained by borders, rules, or regulators. Risky business is not about geographies. Whether it is in China or anywhere else, risk is an integral part of any business, and one that all managers need to address. But different markets present different risks, and require different approaches. It is up to individual managers and business owners to assess, accept, and manage those risks in a way that suits their moral, operational, and regulatory requirements.
Jeremy Gordon

Chapter 1. Opportunity and Risk

Abstract
The opportunity to do business and make money in China has been on the mainstream corporate agenda for over 20 years, but in that time the nature of the opportunities has fundamentally changed—as have the risks. In an ironic reversal of the “China is risky” school of thought, it was the China opportunity that was suddenly brought into focus following the global financial crisis of 2008—as “mature” economies suffered from the impact of massive, previously unseen, systemic risks in the financial markets.
Jeremy Gordon

Chapter 2. How Risky Is Business in China?

Abstract
There are many challenges that might keep China-focused mangers awake at night. Some of them, like the (lack of) quality of Beijing’s air, they can do little about. Others are the subject of much debate, planning and effort. It is helpful to map out the range of concerns, and to put the key risks in the context of wider business issues.
Jeremy Gordon

Chapter 3. Due Diligence in China

Abstract
Due diligence is a broad term, and a flexible tool. In China it is usually good to be flexible, and not to be bound by simple checklists and rigid rules. In the words of the famously flexible Bruce Lee1: “the stiffest tree is most easily cracked, while the bamboo or willow survives by bending with the wind.”
Jeremy Gordon

Chapter 4. Putting Due Diligence on the Map

Abstract
Doing business in China can be a bit of an adventure, especially for those who are moving into uncharted territory. Unfortunately not all adventures have happy endings, and many people have rushed down well-worn paths, ignoring the danger signs, only to find themselves lost and in serious trouble.
Jeremy Gordon

Chapter 5. Survival Toolkit

Abstract
There are many ways in which due diligence checks can be conducted on a target in China. Usually it makes sense to start with general information gathering, and then to increase the focus on areas of particular interest or where red flags are identified. Research tools that are at the disposal of any manager for no, or limited, costs include:
Jeremy Gordon

Chapter 6. Emergency Services

Abstract
When looking for and evaluating risks, there is always a risk that an untrained eye could miss an important detail, or that a red flag, when spotted, requires specialist services and/or additional resources to come in, investigate, and help to find a way through to a successful resolution. When a due diligence alarm goes off, the support of an army of emergency services is at hand. The service suppliers range from risk managers and investigators to accountants and lawyers, and include large and small, local and international firms. The right fit of service will depend on the type and scope of issues to be addressed, the level of sensitivity, the internal skills, capacity, and budget that is already available, and the required timeframe for delivery.
Jeremy Gordon

Chapter 7. The Good, the Bad, and the Ugly

Abstract
Some real-life examples of past cases are proof of the variety of risks that have to be addressed, the effectiveness of the tools that can be deployed, and the benefits that due diligence can bring. When conducted at the start of the process it can strengthen the business position, even when no major threat is identified (“the good”). In some cases bad things are found, but often in time to put them right (“the bad”). Sadly, some cases are all about post-impact damage limitation, often because no proper due diligence was done at the outset (“the ugly”).
Jeremy Gordon

Chapter 8. Conclusion: The New Reality

Abstract
China is a market that few companies can choose to ignore. Its entrenched role as a manufacturing hub, combined with its emergence as a major consumer market makes it a prime target for businesses that are desperate for growth in a slowing global economy. It is no longer the case that China needs foreign capital, knowhow, and technology to accelerate its industrial development, and China no longer needs to offer tax breaks and other incentives to lure foreign firms in. It wants to develop and strengthen its domestic industries, develop national champions to serve its home market, and retain more of the value produced by its often low-paid workers, so that they can live Xi Jinping’s “Chinese Dream.”1
Jeremy Gordon

Backmatter

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