Trading and Establishing Foreign-invested Commercial Enterprises in China
Published: July 2011While there has been a great deal of discussion about the macroeconomic trends surrounding and microeconomic thinking behind “the Chinese consumer” (and even whether this term is too generalized to use), the one word describing this demographic that all sources seem to agree on is potential.
No. of Pages: 12 pages
In this issue:
- Evaluating the Suitability of ROs
- Establishing a FICE: Laws and Procedures
- Franchising in China: A Flourishing Business Model
- A Macroeconomic Overview of China Consumers
While there has been a great deal of discussion about the macroeconomic trends surrounding and microeconomic thinking behind “the Chinese consumer” (and even whether this term is too generalized to use), the one word describing this demographic that all sources seem to agree on is potential. It doesn’t take a PhD demographer or marketing guru to calculate that world’s largest population + rapidly rising disposable incomes + increasing tastes for foreign products = a rather enticing market for the foreign company. This little calculation is not new – though it is perhaps significantly more true now than several years ago – and it forms the central theme of hoards of business books and news articles.
But more and more foreign businesses are starting to act. A trend we’ve been seeing a lot of on the ground in China is the conversion of representative offices (ROs) to foreign invested commercial enterprises (FICEs). It is this trend that inspired this issue’s theme. In this issue, we evaluate the suitability of ROs, walk you through the details of FICE (including establishment procedures), discuss franchising in China for foreign companies, and put in a few words about what the Chinese consumer from a macroeconomic perspective.