Go by the book to step up strategy
In a market such as China’s, a guidebook is always useful and PricewaterhouseCoopers has just launched its latest edition of Doing Business and Investing in China, which is to the would-be investor in China what the Lonely Planet is to the backpacker.
PwC reckons the change in leadership and the current normalisation of lower growth rates is bringing increased liberalisation of the China market to foreign investment.
The new leadership, under Xi Jinping, who is due to be named president at the National People’s Congress in March, is keen to embrace foreign direct investment to help revive the global economy.
This means market entrants and investors can find a path to sustainable success in China with an open mind and flexible strategy, according to the book.
“As multinational businesses shift their focus from China’s ‘emerging labour pool’ to its ‘emerging middle class’, now is the time to step up your China strategy and capitalise on new market reforms,” said Andrew O’Callaghan, leader of PwC Ireland’s China Practice.
“This presents a huge opportunity for investment by Irish companies in China but careful advance planning is critical for long-term success.”
The guidebook is a compilation of insights and perspectives gained through interviews with dozens of PwC’s leading China-based practitioners.
Over 10 chapters, it uses their on-the-ground experience to look at topics such as market entry and growth, how to do deals, managing risk, corporate governance and IT effectiveness and HR and talent management.
There are also chapters on finance and treasury, supply chain strategies, government relations, regulatory compliance and stakeholder alignment, as well as tax management, accounting and reporting.
“As China moves towards the ‘new normal’ of single-digit growth, investors should focus on China’s growing domestic market and rising income, as well as green projects and the movement of labour-intensive industries towards the central and western parts of the country,” said Mr O’Callaghan.
Rapid changes in demographics and market forces are opening up new sectors and opportunities that would never have been believed possible a few years ago, much less open to foreign investment.
“The best way for investors to mitigate on-the-ground risks is by knowing their customers and partners, government touch points and stakeholders,” says Andrew O’Callaghan.