The real cost to China's businesses with government anti-corruption crackdown

Many news reports have been published about China's ongoing crackdown on corruption (tigers and flies), but now one of the world's biggest banks has put a price on the corruption.

The report published by the Bank of America Merrill Lynch this week, the Chinese government's anti-graft campaign could have cost China's economy more than $100bn this year alone. 

Many of the small effects of the anti-corruption drive have already been well documented; a slowdown in the restaurant trade and sales in luxury goods has seen Chinese business go out of business.

The gift giving culture is part of the Chinese business culture and required if doing business in China.

The past year has seen Shanghai's posh malls and boutique designer shops business slow to snails pace but the BofAML report suggests that the campaign is also having a significant and troubling macroeconomic effect.

Early last year, government bank deposits have been soaring, by almost 30% year on year and even honest officials are now terrified of starting new projects, for fear of being seen as corrupt that they're simply keeping public funds in the bank.

The cost to the economy of the prohibition on government consumption and the chill on admin spending is an estimated reduction in growth of at least 0.6% this year but it could, the report argues, be as high as 1.5% which gives us the figure of about $135bn of lost economic activity.

The report's authors admit their calculations are a back of the envelope estimate of fiscal contraction, but even if they are only half right it is an extraordinary amount of money and it highlights some of the challenges facing China's anti-corruption crusader in chief, President Xi Jinping.

Since taking office over a year ago Xi has made the cause his goal, warning that official graft and extravagance threaten the very survival of the ruling Communist Party.

Published by Go Frontiers (UK & China)

Isle of Man business to see benefits of Chinese link up

Twelve delegates from the Isle of Man where hosted by a Chinese delegation when they visited China and could soon have produced tangible results for the island economy announced by the chief minister.

Last Wednesday Allan Bell signed a memorandum of understanding (MOU) in the northern Tianjin.

The new alliance aims to provide mutual beneficial trade and technical links between countries.

Mr Allan Bell said: "We have shown how we can support Chinese businesses seeking to do business in UK and Europe" and added, "Strengthening cooperation is key to doing business in China".

 

Published by Go Frontiers (UK & China)

Part A: Chinese Premier Li Keqiang visits the UK yesterday

Yesterday (17th June 2014) the UK played host to China's Premier Li Keqiang and a Chinese delegation on their three day visit to the UK.

The Chinese Premier Li Keqiang arrived in London, yesterday on a three day visit, which is part of Europeon tour for his first official visit with the aim for business talks with the British Prime Minister David Cameron.

Later on in the day Premier Li will have an audience and photo oportunity when he meets Queen Elizabeth II at Windsor Castle.

Their has been plenty of discussions about doing business in China and the UK and the diffeculties in British and Chinese business culture.

However Mr Li said he really hoped his visit would expand Sino-British busines co-operations and create a better understanding between both countries.

The talks went well for both countries but Mr Cameron still remains hugely concerned about China's human rights.

Published by Go Frontiers (UK & China)

Working in China

Benefits of working and doing business in China
China is the largest economies in the world and still growing. This is the reason many multi-national companies are relocating to China and other companies who are already located in other parts of Asia are moving their headquarters to China.

The market in China is still very buoyant with new sectors open up, such as banking/financial services and accounting/legal. The demand for foreign talent will continue, particularly if they have the right business/language skills such as Chinese translation, Chinese Interpreters and understand Chinese business culture.

Economy and Job Market

What is the current local job market situation? China rapid rise and booming economy has made it into one of the most candidate short markets in Asia, facing with some of the highest wage inflation and employee turnover rates in Asia. The Chinese market is fairly buoyant with many companies still moving to China and setting up offices.

Published by: Gary Rice, Go Frontiers (UK & China)

Confucianism the key element to Chinese business culture

From 500 BC to the modern age Confucianism still plays a key role in Chinese business culture and China's character and behaviour to create harmony in society.

President Xi Jinping, the new Chinese President, and his government are now promoting the importance of Confucianism and its positive impact on Chinese society focusing not only on social but business values too in order to promote harmony in society and the working environment.

Confucianism is engrained in China's culture plays its role in social/work ethics, family and relationships. The theory of Confucianism is discussed regularly during dinner, especially between business people.

Learning some Confucianism will give you something to talk about at the dinner table and will help you to build relationships with your Chinese counterparts and agents when doing business in China.

Published by: Gary Rice, Go Frontiers (UK & China)

Exporting to China - the new SME buzz words in the Midlands

Exporting to China are the new buzz words being used by the SME's in the Midlands area. Two of the top destinations are India and China which highlights the issue of culture and doing business their way. Providing you want to be successful that is.

The common issue over looked until it is too late is culture. Culture in many countries is a big deal especially if you are doing business in China were you will need to grasp an understanding of the Chinese business culture and Chinese social culture.

Business in China is done very differently as the Chinese prefer to build trust before they do business. So it is important to spend the time and build a good relationship that will last.

To do this you need to know how to show your respect and portray your class. Developing your Face and others is equally important when building Chinese relationships.

Published by: Gary Rice, Go Frontiers (UK & China)

Amber Valley Jobs Fair (06/09/13) | Go Frontiers (Chinese business culture)

We had a brilliant day networking at the Amber Valley Jobs Fair, organised by Nigel Mills MP.

 

Met Jason, an old friend from Ripley Mill Hill school and had a good chat about doing business in China and Chinese business culture and how this effects businesses and the problems of day-to-day communications.

 

Communications is an issue for companies dealing with China and companies waste a lot of time trying to communicate effectively. If the companies kept their emails simple for the Chinese who have to communicate in their second language (English). Business would run much smoother.