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China’sLaws,Rules&Regulations

China’sLaws,Rules&Re1DiscussionQuestionsWhatarethekeyaspectsofChina’spoliticalandlegalenvironment?WhatoptionsareavailableforforeigninvestorsinpreparingtheirbusinessentrytotheChinamarket?HowhasChina’saccessiontotheWTOmembershipcreatednewopportunitiesandchallengesforbothChineseandforeignenterprises?Whatarethelegal,politicalandinvestmentrisksinvolvedindoingbusinessinChina?Whatarethepossiblesolutions?WhydidChinaestablishtheShanghaiFreeTradeZonein2013?WhatopportunitiesandchallengeswilltheShanghaiFreeTradeZoneprovideforforeigninvestors?DiscussionQuestionsWhataret2China’sPoliticalandLegalEnvironment1.Thepoliticalsystemisstable.But,althoughthestatelookspowerfulfromtheoutside,itlookslesssofromwithin

2.Thecommunistparty(CCP)isintransition.Theynowallowsbusinesspeople,or“capitalists”,tobecomemembers.ButiftheCCPwanttokeeppower,itisgoingtohavetosacrificeMarxismandcommunism.3.ThelegalsystemissubordinatetotheCCP RulebymannotrulebyLaw.Judgesareappointed andpromotedbythelocalpartycommitteeand governmentelite,notbytheMinistryofJustice.China’sPoliticalandLegalEn3TenGoldenBusinessRulesforChina

Assembletherightteam,trainlocalsKnowthemarketandoperatingenvironmentChinaisnotonebuteightdistinctlydifferentmarketsLookformultiplepointsofentryObservemarketdevelopmentsandchanges“Seektruthfromfact”(Businessrecords,statistics,statementsetc)KnowhowtobenefitfromtheinformationnetworkanddevelopalliesBecreativeandpragmatic-likedrivingacarinChina.“Gropeone’sway,stonebystone,acrosstheriver”Havepatienceandkeepoptionsopen-finaloffersarethefirststageofnegotiationsRemember:YouareinChinatomakemoney!*

*Conflictofinterest:+ChinaManagersstriveforoperationalsuccess(eg.sales)+HeadOfficeexpectsReturnonInvestmentTenGoldenBusinessRulesfor4ForeignInvestmentOptions

-JointVentures-WhollyForeignOwned(WFOE)

-MergerandAcquisitionTrendsForeignInvestmentOptions-5

EquityJointVenture(EJV)Co-operativeJointVenture(CJV)WhollyForeignOwnedEnterprise(WFOE)LegalFormLegalentitywithLimitedLiabilityMaybesetupasalegalentityorasanenterprisehavingnoseparatelegalpersonstatusLegalentitywithLimitedLiabilityForeignPartner’sEquityNormallycannotbelessthan25%Nostrictrequirement.Dependsoncontract100%ContractRequiredRequiredNotRequiredArticlesofAssociationRequiredRequiredRequiredStandardsforInvestmentBenefitstotheChinanationaleconomy,Export-orientedorutilizeAdvancedtechnologiesExport-orientedorutilizeAdvancedtechnologiesBenefitstotheChinanationaleconomyMOFTECApprovalRequiredRequiredRequiredProjectProposalRequiredRequiredRequiredFeasibilityStudyRequiredRequiredRequiredSAICregistrationRequiredRequirediftherearechangesinthestatutoryitems(industrial/commercialandtaxregistrations)RequiredCapitalContributionCash,Capitalgoods,IndustrialPropertyrightsCash,materialobjects,land-userights,industrialpropertyrights,unpatentedtechnologyandotherpropertyrightsCash,capitalgoods,industrialpropertyrights,know-how,landuserightsForeign:AdvancedtechnologyandequipmentsmusttrulysuitedtotheneedsofChinaChinese:LanduserightBoardofDirectorsRequired.DecidedundercontractEitheraBoardofDirectororaJointManagementCommitteeisneededNotnecessaryExportrequirementNominimumexportrequiredNominimumexportrequiredNominimumexportrequiredAccountingAccountingasseparateentityrequired.AccountbookmustbekeptinChinaAccountbookmustbeestablishedandkeptinChinaAccountingasseparateentityrequired.AccountbookmustbekeptinChinaProfit/LossDistributionProfitandlosssharedaccordingtotheratioinregisteredcapitalProfitandlosssharedaccordingtocontracttermsAfterdeductionofnecessaryfeesandtax,profitcanberepatriatedoverseasTaxCorporateIncomeTaxCorporateIncomeTaxCorporateIncomeTaxInvestmentTermDependsonindustry;usuallydecidedbycontractSpecifiedinthecontractSubmitattimeofregistrationEarlyTerminationPermittedPermittedPermittedGoverningLawPRCLawPRCLawPRCLaw?Fiducia2002E.&O.E.PRODUCTIONINCHINA–AVAILABLEALTERNATIVES

EquityJointVenture(EJV)Co-6ForcesthatShapetheChinaMarket1)MonitorandunderstandWTOinducedrestructuring2)ExploitopportunitiesresultingfromWTO,especiallydomestictrading,distributionandopeningbranchoffices3)Exploitgrowingdisposableincome4)Monitorinlanddevelopmentsandopportunities5)Concentrateondevelopingandmaintainingcompetitivestrategies(competitionfromdomesticcompaniesisincreasing)6)CultureofChinesecompanieschanging7)Improvebrandingandimagebuilding8)Howtodealwithskillshortage?(e.g.insurancesector)9)Attractandkeephigh-caliberlocalmanagersasthecompetitionforthemheatsupfromnewcomersanddomesticcompaniesMarketswithdevelopmentpotentialare:

Telecom,Chemicals,Machinery,FastMovingConsumerGoods(FMCG),ITandServices.ForcesthatShapetheChinaMa7

LegalOpportunitiesofRepresentations

agreementsoftenancy(businessandliving-room)

residentspermitsforforeignemployees

showingcompanylogo

usingofbusiness-cards

openingbankaccounts

indirectemploymentofChinesestaff(aboutaserviceagencylicensedbynationaladministration)

LegalOpportunitiesofRepres8TheTasksofRepresentationsRepresentationsarenotallowedtosetupbusinessactivities,i.d.theyarenotallowedtoissueinvoicesinChina.MainTasks:

observationofthemarket,

contacting,maintainingcontacts,

strengtheningthetiestoclients,

After-salesService

promotionandsupportofthecompany'snameorbrand,

marketstudy.

TheTasksofRepresentations9WhollyForeignOwnedEnterprise

uncomplicatedlicenseprocedure,nonegotiationswithapotientalpartnernecessarylaunchingofacompletlynewcompany,notakingoverandrestructuringofanobsoletecompanynoproblemsinevaluatingmoreflexibilityinhowtoempowermanagementfreelocationalchoiceAdvantagesWhollyForeignOwnedEnterpris10WhollyForeignOwnedEnterprisehigherinvestmentsstrictregulationsforexportthereisnoestablishedpartnerforsettingupadistributionnetpersonellandmanagementhastobesendoverDisadvantagesWhollyForeignOwnedEnterpris11EquityJointVentureusuallyLimitedLiabilityCo.LawonChineseForeignEquityJointVenture8.7.1979,revised

4/4/90,RegulationsfortheImplementationoftheLawonForeign

EquityJointVenturesfrom9/20/83,LawonCompanies7/1/94legalbasisaimsforeignminimumsharelegalformofenterpriseDistributioninChina25%EquityJointVentureusuallyLi12JointVentureexistingbaseforlocalization

existingdistributionnetaswellasafunctioningnetofsuppliersAdvantagesJointVentureexistingbasefo13JointVenture

nofreedomofchoiceconcerningoperativeandstrategiccompanydecisionsaplannedincreaseinsharecapitalcanbeblockedbythepartnernoabsolutesecrecyofknow-howcanbeensurednofreechoiceoflocationDisadvantagesJointVenturenofreedomofch14JV-Problemsdifferentinterestsonbothsides

uncontrolledKnow-HowtransferfoundationofaWFOE,restructuringofthejv,restructuringofdecisioningareas42%18%34%60%18%9%EJVWFOECJV11%6%noanswerWhichlegalformofenter-prisedidyouchoose?Whichformwouldyouchoosenow?increasingtendency

toWFOEproblemssolutionJV-Problemsdifferentinterest15Howlongtookitmedium-sizedbusinesscompaniestopreparetheirundertakingofinvestment?

1to2years2to5years5yearsandmorenocommentlessthan1yearinpercent%Howlongtookitmedium-sized16MainproblemsforrepresentationsconcerningthepreparationofinvestmentsinChinareliablemarketinformationsearchandchoiceofpartners

localemployeesnegotiations,contractconcludingfeasibilitystudyadjustingofproducts/servicestotheChinesemarketfinancinginsufficientsupportbyChineseauthoritiescommercialprotectionoflaw73434033252419179inpercent%Mainproblemsforrepresentati17MainproblemsforrepresentationsconcerningtherealizationofinvestmentsinChinapaymentbehaviorofclients

localemployeesco-operationwiththeJV-partnerco-operationbetweenGermanmanagementandChinesepersonnellocalinfra-structurefinancialdifficultiesoftheJV-partnerlocalnegotiationculture4742381816151317inpercent%34321310othermarketcharacteristicsthanexpectedestablishingdistributionstandardofperformanceoflocalcontributorscertaintyandimplementingoflawcorruptionMainproblemsforrepresentati1810080604020020406080

competitionbyothercompanies

overviewofthemarket

corruption

identifypotentialclientsadjustmentofproducts/

performancestothedemandsoftheclients43131102342914

competitionbyChinesecompanies25514312606141323019253126311norelevanceslightlyproblematicproblematichighlyproblematicProblemsConcerningtheRepresentation10080604020020406080competiti19

TheMarketSituationandWTOImplicationsManufacturingChallenges:“MadeinChina”or“Import”Reductionintariffrateswillimpacteveryone’smanufacturingstrategyManufacturinginChinanolongerakeyadvantageNewcompetitorsemergingWhollyForeignOwnedEnterprise(WFOE)orJointVenture(JV)?ManufacturingOpportunities:TariffreductionsreductioninimportedmaterialcostsHeightenedcompetitiondomesticrestructuringM&AopportunityNewFDIinlogistics,distributionandcustomerfinancingbettersupportservicesChineselegend:“Thehillsarehigh,theEmperorisfaraway”China’saccessiontotheWTOwillbringbothnewopportunitiesandnewchallengesSuccessfulimplementationofWTOruleswilldependonindustrysector,regionandministry.Thuseachcompanyneedstocloselymonitorchanges&developments.TheMarketSituationandWTO20BusinessChallenges

SizeanddiversityofcountryPersonneldevelopmentOperationallimitations:businessactivity,industryscopeReliabilityofinformationanddata

Forexample,financialdata(balancesheet,profit&lossstatement)Predictability:unexpectedpolicychangescreateuncertaintyforforeigninvestors.

Forexample,ChinaNetcom(telecombackbonecarrier),inwhichGoldmanSachsandNewsCorporationinvestedUS$25mio,istobeamalgamated,inNorthChinawithrivalChinaTelecom(Stateowned)BusinessChallengesSizeandd21

DomesticTradebarriersareamajorhurdleforcompaniesinChinaTradeand

investmentbetweenChina’sprovinceshaslargelystagnated.

Corruptionisrampant“InternationalCorruptionPerceptionIndex”-China3.5(nearlycorrupt)-HongKong7.9(nearlyclean)

Non-performingloans*BankofChina28%*ConstructionBank40-50%*AgriculturalBank80-90%(estimatesbyforeignbanks)

Forcomparison:InternationalNorm6%

LackofTransparency -censorshipofmedia

-newrestrictionsforserviceprovidersaretoscreenprivate

e-mailmessagesforpoliticalcontent…China’sCurrentProblems(1)

22China’sCurrentProblems(2)

Potentialforsocialunrest:Increasingunemploymentresultingfromthereform process,growingincomedisparitycity/countryside andcoastalprovincesandtheinterior.Notplayingbytherules:Localprotectionism Unauthorizedlocalfees&taxes

IPRinfringement,productpiracy

Poorenforcementofcourtjudgments:

“amazinglypoor,eveninlocalcases” (J.Cohen,USattorney)

Glassceilings: “Guanxi”preventsdirectactionagainstseniorofficials andtheirchildrenFreshwatershortage: EspeciallyinNorthEastChinaChina’sCurrentProblems(2)P23PotientialRisksInvolvedinDoingBusinessin

ChinaExportRepresentationCompaniesdefaultofpaymentsnoclosecustomerrelationswrongchoiceofagentsoverestimatingthemarketlossofknow-howinsufficientplanningstaffjvproblemsmoralofclientscon-cerningpaymentslegaluncertaintiespoliticalriskshiddencostsgeneralrisksspecificrisksPotientialRisksInvolvedinD24OverEstimatingtheMarketChinaisnotamarketwithapotentialof1,2bclients!!!lokalandforeigncompetitionisenormous!!!PROBLEMEenterthemarketstepbystepregularmarketanalysiscompanyrepresentationexportthroughagentsvolumeoftradetimeProblemsSolutionsOverEstimatingtheMarketChi25LossofKnow-Howpermanentinfringementsofcopyrightnolegalopportunitiestoavertthoseinfringementsshortdevelopmentandproductlife-cyclesregisteringofbrands,labelsandpatentslobbyingauthorities,departmentoftradeandindustrieetc.donotproducemaincomponentsinChinaproblemssolutionsLossofKnow-Howpermanentinf26ProblemsConcerningStafffindingappropiatestaff,fluctuationofemployeescontrollingandsupportbyGermanmanagement,cleardistinctionbetweenboardandmanagement,personellmanagement,developmentofstaffetc.

solutionsproblemsProblemsConcerningStafffind27UncertaintyofPlanningduetoinsufficientorwrongplanningwrongstrategicdecisionsaremadedrawingupabusinessplanduringthewholephaseofentranceinthemarket

workingoutprice,

distributionsand

competitionanalysis,promotionplans

problemssolutionsUncertaintyofPlanningdueto28PoliticalRiskssocialtensionsduetoChinasshifttomarketeconomy,

increasingunemploymentrates,significantdifferenceintheincreaseofincomeratesbetweenthecitiesandthecountrysidenoneproblemssolutionsPoliticalRiskssocialtension29LegalRisksabout1.300lawsarebeingchangedorissuedduetoChinasbecommingmemberoftheWTO

theprocessofadjustingandconstrueingthenewlawwilltaketimenoneproblemssolutionsLegalRisksabout1.300lawsa30HiddenCostshighexpensesforlaunching,quality,travelling

highcostsforproduction,hiddencostsexactcalculationofcostsduringentranceinthemarketconsiderableexpenses:stafftravellingrentscommunicationmin.Costs???considerableexpenses:qualityeducationlong-termaimsofpaymentadministrationmin.costs???RepresentationCompanyproblemssolutionsHiddenCostshighexpensesfor31NewFreeTradeZones

TheChinesegovernmenthasissuedaseriesofregulationsfortheChina(Shanghai)PilotFreeTradeZone,inabidtoallowgreaterinvolvementofforeigninvestorsinformerlyrestrictedareassuchastelecommunications.TheShanghaipilotfreetradezonewillprovideunprecedentedbreakthroughopportunitiesforforeigninvestors.ShanghaiwillstrivetoworkonasetofpoliciesthatcanbereplicatedandpromotedinChina'sotherpotentialfreetradezonesaspartofitsreformefforts.NewFreeTradeZonesTheChine32ReformGuideline

TheShanghaigovernmenthasrecentlypublishedareformguideline,callingforareductioningovernmentinterferenceintheoperationofstate-ownedenterprises.Theguidelineseekstoensurethatthemanagementofstate-ownedassetswillbeputunderintegratedsupervision,replacingprevioussystemswithmyriadsofseparateregulationsbylocalsupervisioncommissions.AccordingtoarankingreleasedbytheChinaInstituteofCityCompetitiveness,ShanghaiovertookHongKongtobecomeChina'smostcompetitivecity,mainlyduetothepilotfreetradezone.ReformGuidelineTheShanghai33

China’sLaws,Rules&Regulations

China’sLaws,Rules&Re34DiscussionQuestionsWhatarethekeyaspectsofChina’spoliticalandlegalenvironment?WhatoptionsareavailableforforeigninvestorsinpreparingtheirbusinessentrytotheChinamarket?HowhasChina’saccessiontotheWTOmembershipcreatednewopportunitiesandchallengesforbothChineseandforeignenterprises?Whatarethelegal,politicalandinvestmentrisksinvolvedindoingbusinessinChina?Whatarethepossiblesolutions?WhydidChinaestablishtheShanghaiFreeTradeZonein2013?WhatopportunitiesandchallengeswilltheShanghaiFreeTradeZoneprovideforforeigninvestors?DiscussionQuestionsWhataret35China’sPoliticalandLegalEnvironment1.Thepoliticalsystemisstable.But,althoughthestatelookspowerfulfromtheoutside,itlookslesssofromwithin

2.Thecommunistparty(CCP)isintransition.Theynowallowsbusinesspeople,or“capitalists”,tobecomemembers.ButiftheCCPwanttokeeppower,itisgoingtohavetosacrificeMarxismandcommunism.3.ThelegalsystemissubordinatetotheCCP RulebymannotrulebyLaw.Judgesareappointed andpromotedbythelocalpartycommitteeand governmentelite,notbytheMinistryofJustice.China’sPoliticalandLegalEn36TenGoldenBusinessRulesforChina

Assembletherightteam,trainlocalsKnowthemarketandoperatingenvironmentChinaisnotonebuteightdistinctlydifferentmarketsLookformultiplepointsofentryObservemarketdevelopmentsandchanges“Seektruthfromfact”(Businessrecords,statistics,statementsetc)KnowhowtobenefitfromtheinformationnetworkanddevelopalliesBecreativeandpragmatic-likedrivingacarinChina.“Gropeone’sway,stonebystone,acrosstheriver”Havepatienceandkeepoptionsopen-finaloffersarethefirststageofnegotiationsRemember:YouareinChinatomakemoney!*

*Conflictofinterest:+ChinaManagersstriveforoperationalsuccess(eg.sales)+HeadOfficeexpectsReturnonInvestmentTenGoldenBusinessRulesfor37ForeignInvestmentOptions

-JointVentures-WhollyForeignOwned(WFOE)

-MergerandAcquisitionTrendsForeignInvestmentOptions-38

EquityJointVenture(EJV)Co-operativeJointVenture(CJV)WhollyForeignOwnedEnterprise(WFOE)LegalFormLegalentitywithLimitedLiabilityMaybesetupasalegalentityorasanenterprisehavingnoseparatelegalpersonstatusLegalentitywithLimitedLiabilityForeignPartner’sEquityNormallycannotbelessthan25%Nostrictrequirement.Dependsoncontract100%ContractRequiredRequiredNotRequiredArticlesofAssociationRequiredRequiredRequiredStandardsforInvestmentBenefitstotheChinanationaleconomy,Export-orientedorutilizeAdvancedtechnologiesExport-orientedorutilizeAdvancedtechnologiesBenefitstotheChinanationaleconomyMOFTECApprovalRequiredRequiredRequiredProjectProposalRequiredRequiredRequiredFeasibilityStudyRequiredRequiredRequiredSAICregistrationRequiredRequirediftherearechangesinthestatutoryitems(industrial/commercialandtaxregistrations)RequiredCapitalContributionCash,Capitalgoods,IndustrialPropertyrightsCash,materialobjects,land-userights,industrialpropertyrights,unpatentedtechnologyandotherpropertyrightsCash,capitalgoods,industrialpropertyrights,know-how,landuserightsForeign:AdvancedtechnologyandequipmentsmusttrulysuitedtotheneedsofChinaChinese:LanduserightBoardofDirectorsRequired.DecidedundercontractEitheraBoardofDirectororaJointManagementCommitteeisneededNotnecessaryExportrequirementNominimumexportrequiredNominimumexportrequiredNominimumexportrequiredAccountingAccountingasseparateentityrequired.AccountbookmustbekeptinChinaAccountbookmustbeestablishedandkeptinChinaAccountingasseparateentityrequired.AccountbookmustbekeptinChinaProfit/LossDistributionProfitandlosssharedaccordingtotheratioinregisteredcapitalProfitandlosssharedaccordingtocontracttermsAfterdeductionofnecessaryfeesandtax,profitcanberepatriatedoverseasTaxCorporateIncomeTaxCorporateIncomeTaxCorporateIncomeTaxInvestmentTermDependsonindustry;usuallydecidedbycontractSpecifiedinthecontractSubmitattimeofregistrationEarlyTerminationPermittedPermittedPermittedGoverningLawPRCLawPRCLawPRCLaw?Fiducia2002E.&O.E.PRODUCTIONINCHINA–AVAILABLEALTERNATIVES

EquityJointVenture(EJV)Co-39ForcesthatShapetheChinaMarket1)MonitorandunderstandWTOinducedrestructuring2)ExploitopportunitiesresultingfromWTO,especiallydomestictrading,distributionandopeningbranchoffices3)Exploitgrowingdisposableincome4)Monitorinlanddevelopmentsandopportunities5)Concentrateondevelopingandmaintainingcompetitivestrategies(competitionfromdomesticcompaniesisincreasing)6)CultureofChinesecompanieschanging7)Improvebrandingandimagebuilding8)Howtodealwithskillshortage?(e.g.insurancesector)9)Attractandkeephigh-caliberlocalmanagersasthecompetitionforthemheatsupfromnewcomersanddomesticcompaniesMarketswithdevelopmentpotentialare:

Telecom,Chemicals,Machinery,FastMovingConsumerGoods(FMCG),ITandServices.ForcesthatShapetheChinaMa40

LegalOpportunitiesofRepresentations

agreementsoftenancy(businessandliving-room)

residentspermitsforforeignemployees

showingcompanylogo

usingofbusiness-cards

openingbankaccounts

indirectemploymentofChinesestaff(aboutaserviceagencylicensedbynationaladministration)

LegalOpportunitiesofRepres41TheTasksofRepresentationsRepresentationsarenotallowedtosetupbusinessactivities,i.d.theyarenotallowedtoissueinvoicesinChina.MainTasks:

observationofthemarket,

contacting,maintainingcontacts,

strengtheningthetiestoclients,

After-salesService

promotionandsupportofthecompany'snameorbrand,

marketstudy.

TheTasksofRepresentations42WhollyForeignOwnedEnterprise

uncomplicatedlicenseprocedure,nonegotiationswithapotientalpartnernecessarylaunchingofacompletlynewcompany,notakingoverandrestructuringofanobsoletecompanynoproblemsinevaluatingmoreflexibilityinhowtoempowermanagementfreelocationalchoiceAdvantagesWhollyForeignOwnedEnterpris43WhollyForeignOwnedEnterprisehigherinvestmentsstrictregulationsforexportthereisnoestablishedpartnerforsettingupadistributionnetpersonellandmanagementhastobesendoverDisadvantagesWhollyForeignOwnedEnterpris44EquityJointVentureusuallyLimitedLiabilityCo.LawonChineseForeignEquityJointVenture8.7.1979,revised

4/4/90,RegulationsfortheImplementationoftheLawonForeign

EquityJointVenturesfrom9/20/83,LawonCompanies7/1/94legalbasisaimsforeignminimumsharelegalformofenterpriseDistributioninChina25%EquityJointVentureusuallyLi45JointVentureexistingbaseforlocalization

existingdistributionnetaswellasafunctioningnetofsuppliersAdvantagesJointVentureexistingbasefo46JointVenture

nofreedomofchoiceconcerningoperativeandstrategiccompanydecisionsaplannedincreaseinsharecapitalcanbeblockedbythepartnernoabsolutesecrecyofknow-howcanbeensurednofreechoiceoflocationDisadvantagesJointVenturenofreedomofch47JV-Problemsdifferentinterestsonbothsides

uncontrolledKnow-HowtransferfoundationofaWFOE,restructuringofthejv,restructuringofdecisioningareas42%18%34%60%18%9%EJVWFOECJV11%6%noanswerWhichlegalformofenter-prisedidyouchoose?Whichformwouldyouchoosenow?increasingtendency

toWFOEproblemssolutionJV-Problemsdifferentinterest48Howlongtookitmedium-sizedbusinesscompaniestopreparetheirundertakingofinvestment?

1to2years2to5years5yearsandmorenocommentlessthan1yearinpercent%Howlongtookitmedium-sized49MainproblemsforrepresentationsconcerningthepreparationofinvestmentsinChinareliablemarketinformationsearchandchoiceofpartners

localemployeesnegotiations,contractconcludingfeasibilitystudyadjustingofproducts/servicestotheChinesemarketfinancinginsufficientsupportbyChineseauthoritiescommercialprotectionoflaw73434033252419179inpercent%Mainproblemsforrepresentati50MainproblemsforrepresentationsconcerningtherealizationofinvestmentsinChinapaymentbehaviorofclients

localemployeesco-operationwiththeJV-partnerco-operationbetweenGermanmanagementandChinesepersonnellocalinfra-structurefinancialdifficultiesoftheJV-partnerlocalnegotiationculture4742381816151317inpercent%34321310othermarketcharacteristicsthanexpectedestablishingdistributionstandardofperformanceoflocalcontributorscertaintyandimplementingoflawcorruptionMainproblemsforrepresentati5110080604020020406080

competitionbyothercompanies

overviewofthemarket

corruption

identifypotentialclientsadjustmentofproducts/

performancestothedemandsoftheclients43

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