Of course, you realize that you cannot ignore China. Every stock you own, be it Caterpillar or Pizza Hut, Microsoft, American Express or Exxon, is deeply affected by what's going on in Shanghai and Beijing today. Ignore China meaning you are possibly ignoring a great fortune.

But when being a small or medium sized company, you are sure that you cannot start the China market in the way that those giants do. Before you get a return from the market, these investments are unavoidable -

l Rental : Rental prices in Beijing and Shanghai are amongst the highest in the world. Shanghai is ranked no. 8 among the 10 most costly cities, according to a survey conducted by ECA international, the world's leading knowledge and solution provider for international HR professionals.

l Man-power: Again, Beijing and Shanghai are not cheap. Especially after the effect of the new Labor contract law, employers are forced to shoulder more cost for employee on insurance, compensation, paid holidays.

l Tax: you should not forget about this. If you are running a Rep. Office (the most common way to startup business in China), you are required to pay approx. 10% tax against your expenses in China. If you are operating a company (WFOE or JV), 5.5% business tax and 25% income tax is required.

Of course, there are many other costs like traveling, communications, office supplies etc. So if someone tells you that China is a low cost country, he means 10 years ago.

Still, money is pouring in to China in the legal and illegal ways. With the fact of rapid increase of RMB (Chinese currency) value against US dollars, foreign capital are flooding into the China market seeking the investment opportunities.

By operating a law firm in Beijing, we have met with different foreign clients and been shared with their successful and unsuccessfully experiences in China. So before you decide to invest in China, you should consider all the market risks and evaluate the ROI by studying the market carefully. Some suggestions for the SMEs before investing in China:

-   full market research;

-   due diligence to learn the market and your possible partners;

-    register your patent, trademark to protect your intellectual property;

-    trail the market by authorizing a distributor or reseller;

Century Dragon Intelligence provides business development assistance services to foreign SMEs who want to start up business in China. We understand the China market and we have a team of professional people that could supply cost-effective and high-level services to you. Such model and services been proved by many SME clients. To learn more, contact us at:

Tel: 86.10.8532.5600
Fax: 86.10.8532.5300
Email: info@century-dragon.com