Abstract (eng)
The Chinese Market is a quite alluring market, not only because of its size.
This thesis deals with the difficulties and market entry barriers that foreign investors have to face when starting to do business in China.
In the first parts I try to find the causation for different barriers that exist today by shortly describing the history of China and the effects of the Chinese history on today’s situation.
To better understand the economic situation concerning foreign direct investment in this time, the next two chapters explain the Basic Law as well as the economic system of China.
Before I start dealing with the different entry barriers, I talk about the reasons to invest in China, the economic data and the chances for foreign investors to survive on the Chinese market.
Furthermore, I describe some economic theories, which deal with the question why market entry barriers exist and what they are trying to effect.
To approximate to the main part of the thesis, I start describing the different types of foreign direct investment which are possible in China – the EJV, CJV, WFOE, FICLS, the representative office and the holding company. Which are the differences between these forms or types? Which form is best suited for which type of business?
Then we come to the question which entry barriers now occur if I opted for one form of company or JV to start doing business in China.
First, there is made a difference between tariff- and non-tariff barriers. Non-tariff barriers are the preservation of the authorization to do foreign trade, the quota- and licensing system in China, quality controls, regulations from a planned economy, import-substitution lists and the guideline catalogue of industries for foreign investment as well as difficulties concerning the employees of a foreign invested enterprise. Tariff barriers are the customs and the prevalent tax law.
In the following, each different barrier will be described as well as their influence on the daily economic life of foreign investors doing business in China. Of great importance are also the changes and also changes for better, which appeared because of Chinas accession to the WTO. I analyse here how these changes are reflected in different statistics showing foreign direct investments and imports/exports – to find out that the changes induced by Chinas accession to the WTO are reflected in the statistics, while those changes made before the accession to the WTO are not reflected in the data.
Another main part of the thesis is composed of difficulties one has to face in China concerning distribution channels. In the beginning I describe the difficulties and problems in the distribution and trading sector, which exist today as well as the liberalisation process over the last few years in this sector. Thereafter, I describe more into detail the logistics sector and the different possibilities to transport goods in China – as there are – train, truck, airplane and the waterways. What are the advantages of the different transport methods? Which methods are most common –and for which kind of goods? The changes for good of the last few years are described afterwards.
With this thesis I wanted to establish some kind of guidelines for foreign investors to show them what they have to pay attention to – supported by the wording of the different laws as well as the description where to find the different laws and regulations. - Since an exact and good knowledge about the Chinese market is indispensable in order to be able to seize the chances on the Chinese market.