China Business: Is it time to go elsewhere?

Recently, there was a survey that European companies have been a bit discouraged that the good times have finally come to an end in wonderland China – what with the slowing of economic growth, regulatory hurdles, falling profits, pollution, and rising labor costs.

As the report said – “Business is already tough and it is getting tougher.”

Wait. If you are a foreign company especially didn’t you anticipate that that would happen? Regardless of its slowdown, China would be protective of its interests, that’s natural. So, why are many still surprised?

The fact is, the author is quite surprised by the reactive instead of proactive approach of foreign companies regarding their businesses in China. Tighter regulations and falling profits are obviously tied up to a slowdown which you would notice even in quarterly reports of way past. 2-3 reports of such negativity should already make your company adjust its sails. Didn’t you?

Rising labor costs is inevitable. You don’t expect natives to just take what’s on the table while you rake in tons money. If you are a company with goodwill, fairness is your game. Yes, you have this “grace period” to really profit, but sooner or later, you should be giving people what they really deserve.

Now, should labor costs adjust with the economy? Ideally, it should but if inflation is also corrected. Otherwise, what would happen to the people’s purchasing power? Isn’t that the problem of the government? Well, it’s also your problem since you do business over there.

Yet the real problem however is the pollution issue. We are all aware that expat recruitment and retention has hit a rock because of this issue, and that’s just one of the many negatives pollution brings with it. Then again, don’t you think you should just take a more active role in addressing pollution?

Nah, you don’t just file petitions and stuff – that will just end up in the trash can. No, you should do more than just put up greenhouses – for one, imagine the land it needs to especially make it successful; more so, can a building of all those greens like be enough to feed even just thousands of people? Think sustainability.

Still, even with all these woes, the “largeness” of the Chinese market should be motivation enough to maintain an office. All you need to do is be a little more proactive and active. Start really knocking on those doors.

What’s your take?