Strategies For Entry Into The Chinese market

The political and business atmosphere in China makes now a good time to enter this untapped market, James Shen, president of Wicon International, has said. However, multinationals need a market entry strategy with clearly-defined objectives and, given the national income and living standards, must take a long-term perspective in developing this strategy. China is not a good choice for making immediate profits, he said.

He told a US International Institute for Learning seminar that multinationals should look at China now because the state-owned enterprise system is collapsing, economic reform has led to double-digit growth, the two-tier foreign exchange system has ended, state price control is loosening, and a new corporation law allows takeovers by foreign firms. While China has recently made concessions on markets to assure access to the new World Trade Organization, it has for some time encouraged foreign investment through its special economic zones and laws to regulate and protect foreign investment. Foreign companies must however be aware of the upheaval in the industry and the other special problems involved in making and selling drugs in the country.

Business Information, Market Research Are Essential Business information in China is scarce, but companies need data on the health care market before making decisions or developing plans to entry. He suggested they turn to specialized health care information companies or consultants, government agencies (through a local Chinese agent or a consultant), foreign government agencies such as the US Department of Commerce, semi-governmental organizations, trade groups or chambers of commerce, and public seminars. Professional market research is also needed, as the Ministry of Health often judges a product not only on technical aspects but also on market conditions, he warned.