Before deciding on doing business in China, it is important to find a good strategy on how to enter the market, one that will best suit a new business in China. It is important to first identify the market. Different businesses have different markets depending on the locations. One should first identify the market and their location. There are some of the locations that are usually appropriate for certain business setups. For example, Shanghai is well known to be a great place to start chemical, petrochemical, automobile, pharmaceutical, financial and electronic apparatus companies. There are certain cities such as Zhejiang, Shanghai and Guangdong that are known to be good cities to start-up a business because of their high population.
It is also important to identify the government regulations when formulating a market entry strategy. The regulations and legislations are usually important factors that affect the timeline and cost of market entry. One should then follow due diligence, hire staff, conduct market research and find strategies for protecting Intellectual Property rights in the country.
There are rumours different ways in which foreign firms may start a business in China. The country now allows foreign companies to venture into the market as Wholly Foreign Owned Enterprise (WFOE), Representative Office, Joint Venture and Foreign Invested Partnership Enterprise, a relatively new option.