The Globalization of Business in China

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Twenty-One Critical Points to consider when doing business in China

How many times I have been asked, “So just how do I make money in China?” or, “How do I get started with expanding my business into China?” These are good visionary questions with no single simple answer.

However, at the top of the list is whether you truly have the requisite amount of knowledge and experience in understanding the differences in business climate, etiquette, and culture between your country and theirs.

Let’s go over some of the critical points and legal considerations for transacting successful business in China.

1. Have clear contract terms and try to plan for all reasonable contingencies.

2. Do not attempt to enter into an agreement without sound legal advice and have your own legal counsel. Do not rely on their legal counsel.

3. Specify exact terms of payment, time lines, and performance standards.

4. Question all promises.

5. Make certain your project is economically viable. Viability may look very different over the short, medium and longer term.

6. Know your partner. Do your "due diligence," and do it well.

7. Be sure that your negotiating partner has the authority to make a decision.

8. Make sure the project is a win-win.

9. You must be ready to obey all foreign laws and regulations, even if you initially can successfully avoid them. Seriously question any agreement where you are told you can ignore or avoid the law.

10. Search for problems before they materialize.

11. In addition to creating pro-forma financial statements, spend some time at the beginning of a project to create scenarios of what you will do if things go wrong. Try to anticipate possible problem areas. If you can't find any, you are not looking hard enough.

12. Create a strategy to deal with potential problems. Know your limits on losses as well. Be sure to limit your exposure.

13. Set milestones in the project for performance.

14. In foreign countries, especially Asia and China, personal relationships are very important and sometimes partners may not be completely truthful about problems or potential problems if they feel it may have a negative impact on the personal relationship. Foreign partners may also be under pressure from government or party bureaucrats (as well as business associates) to compromise ethical standards. When problems arise, you should have excellent contacts among officials at the local, provincial and central level governments to manage the issue.

15. Do a thorough risk analysis.

16. Projects and sales in foreign countries require constant attention and clear lines of communication. Do not assume they will run themselves.

17. Keep an eye on the company’s account books, or if licensing, on the licensee’s account books. Neglect of oversight can result in compromised product quality and lead to a struggle for management control as well as possible unethical activity.

18. Get paid. Check with legal counsel to determine the specific payment terms that are customary for a certain type of transaction. If you want to be paid in U.S. dollars, be certain you are able to convert profits and remit funds.

19. Watch Your Intellectual Property Rights. It behooves all traders and investors to take aggressive measures to minimize their potential IPR vulnerability in the international market.

20. Have a local presence that understands both business cultures. This will help with problem solving and avoiding miscommunications.

21. Bring in an expert who understands both countries negotiation styles and strategies so you know when “no” means “no”, “yes”, or “maybe”.

Attorney Michael R. Polin has given keynote speeches on China both in China, and the United States, and has helped many International companies break into the China market space. He will be addressing these issues and answering Globalization questions as a guest professor at the Cal State University San Marcos ( ) as part of the Universities ongoing “Certificate in Global Commerce program”. He will be lecturing on understanding International laws, regulations, legal systems, government support, foreign rights, joint venture agreements, Euro-Sino-Foreign co-productions, distribution, manufacturing and most importantly, which partners and strategic alliances (Government and Private) to trust and work with.

Attorney Polin is currently the China Expert for General Alexander Haig’s television show, World Business Review ( He will be a guest speaker at the upcoming China India Global Conference (, November 15, at the Pasadena, California Hilton Hotel.

Attorney Michael R. Polin, founder of International Law Firm of Michael R. Polin (, is a highly sought after consultant on International legal and business matters. He is also the founder and CEO of two China-Asia Entertainment companies - American Television in China and International Television for Asia. Polin has extensive relationships and partners in China, including those at the world's largest Cell and Internet companies, China Mobile, China Unicom, China Netcom, and China Telcom. Attorney Polin is distinctly and uniquely focused on multimedia entertainment that includes cell phone and Internet content, television programming and merchandising, publishing, DVD sales, co-productions, animation, feature films and other IPR revenue earning products. Attorney Polin recently lead two separate panels at the International Mobile Entertainment Summit on July 27-28 ( ) with wireless leaders from Asia's biggest markets -- China, Korea, Japan and Taiwan. Attorney Polin is an expert in how to cut entertainment content deals in the world's fastest growing continent for mobile, how to maximize mobile marketing revenues, as well as how to evaluate the latest technology and applications.

The International Law Firm of Michael R. Polin ( ) is very experienced on U.S, European, and China markets, and has extensive knowledge, partnerships, marketing strategies, and penetration planning for the Entertainment and Media Markets. For San Diego office, contact (858) 350-4225.


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Michael R. Polin, Esq.