Business is going through a dramatic change. In Shanghai, more than any other place in the country, and perhaps more than any other place in the world, money is being spent hand over fist to build the infrastructure that will lead China into a prosperous future. Despite literally hundreds of high-rise residential and commercial buildings in production or recently finished, real estate prices, rents, and new homes (mostly condo high-rise apartments) sales are all increasing. The small unit we purchased last year for 5700 RMB per sq/meter is now up to 7000 RMB for a similar unit in the same complex. Every day I hear stories of someone who pulled out of buying a new unit in the Century Park area of Pudong a year ago for 3200 RMB sq/meter and finding the same complex is selling their phase II now for 8000-9000 RMB sq/meter. New home sales drive an economy, because with a new home, comes spending on furniture, appliances, electronics, phone lines, computers and all the things that make a home. If the current market is any evidence, Shanghai could be in a boom for many years to come and with it, a developing, prosperous middle class of millions.
Multinationals have been here awhile in varying degrees. Among the most visible are Volkswagen, Alcatel, Nokia, GM, HP, IBM, Xerox, and more. If you are a big company person, you may want to check with these companies for info on positions. Starbucks, Carrefour, KFC, and McDonalds are all visible but staffed by local Chinese primarily.
The WTO is on every businessperson's mind. Entry is expected by the of the year with a multi-year implementation plan. China will do well competing in industries that are labor-intensive or resource-intensive. It will find its stiffest competition from foreign enterprises in industries that are capital, technology, or service related. Try as it might to protect certain industries from foreign domination, China sees the need for change and needs the capital to bring its industries up to date.
Businesses Entering the Chinese Market
If you are a foreign company who wants a presence in China, there are several
options. This is just a quick overview. You may want to visit the Shanghai
American Chamber of Commerce website for more detailed information. In a nutshell,
if you want to just set up an office to manage local production that will
be exported, or to just test the market, you will want to set up a rep office.
This is by the far the easiest and cheapest way to start a business in China.
It does not allow you, however, to sell goods and services in the local economy.
It can act as marketing office for products that would be imported to China
by the parent company. A second type of business is Joint Venture. A foreign
company will partner with a Chinese company to enter and sell in the Chinese
market. There are Equity JV and Co-operative JV. There are significant legal
and financial issues here. Limits of liability, distribution of shares, Again,
if you are serious, this only scratches the surface. The third type is the
Wholly Owned Foreign Enterprise (WOFE). The foreign company makes a capital
investment and owns all of the assets of the business. The government requires
that the business demonstrate that it will be of benefit to the Chinese economy.
This may include export quotas, use of technology, and engagement in actual
manufacturing. A man named Roger Cass is an analyst who predicted a world
wide boom in the economy between 1994 and 2020. Wired
Magazine has a series of articles which called it The Long Boom.
Even the current downturn and consolidation was a part of the plan. Part of
the boom is fuelled by rapid and amazing technological advances. Part is fuelled
by countries, such as China, having very large portions of their population
move from what was relative poverty in Western terms to a prosperous middle-class
lifestyle. For other business sources in English, visit the links section
of this website for sites on the web like Shanghai Amcham, chinabiz.org, or
gorillaasia.com.
Jobs
One
of the big questions I get on a regular basis is, "How do I get a job in Shanghai?"
Speaking from experience, (I am currently looking for a job) if you are a
Westerner who does not have a company to send you here, it is not going to
be easy. The easiest and fastest way to come to Shanghai is to get a job teaching
English. There is a big push on right now to get the Chinese staff up to speed
on Business English. You do not have to know Chinese to do this. It would
help if you have a degree of some kind and an ESL teaching certification.
The bad news is that it does not pay much. Usually about US$15-20 per hour
for actual class time, not including preparation. Full time, you may get paid
for 20 hours a week. If you are a spouse of someone relocating to Shanghai..
this might be an excellent way to get out of the house and experience the
city and local folks. If you want a real job that pays well by Western standards,
you have few choices. All the service, lower to mid management, technical,
sales, restaurant and retail work is handled by locals. Most of them earn
about RMB 1000-3000 a month. (US$ 125-$375-month) Someone I know who works
at the local Starbucks behind the counter makes 4 RMB (that's about 50 cents)
an hour. You do not want to be doing this. First choice is that you really
want to come to Shanghai with a job offer from a company. These jobs tend
to be in management -- usually senior. In some cases, very senior technical,
consulting, business development or project managers. Almost all of these
want you to know Mandarin. Depending on your skill set and background, you
may be faced with having to do your own business (under the table) or do some
kind of web-based business. This has some possibilities if you are focused,
organized, have a little capital, and plug away relentlessly building your
business. If you do something in Shanghai, chances are your customers will
be other expats, not local Chinese. The local Chinese would not usually pay
the price a foreigner would ask unless it was a very compelling product. If
you have a good skill set, especially in management, and speak some Chinese,
you would do well to go to a recruiter or web database who deals with foreign
placement. Try http://jobs.shanghaiexpat.com,
tmp.com, Wang and Li or zhaopin.com.
Post your request on some of the online forums such as Shanghai
Expat, That's Shanghai, or Shanghai-ed
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