  For foreign companies, China represents a massive growth opportunity, and those that succeed will expect their effort to be well rewarded. But companies should think carefully before entering the market, exercise due diligence and vigilantly evaluate the risks.
China is the “Place to Be” in Asia
China has been remarkably successful at opening its markets to the rest of the world while also beginning the necessary reforms of its internal institutions. Building on its competitive advantages, the economy continues to attract record investment from overseas.
Opportunities
China’s implementation of its World Trade Organization accession obligations makes it easier for foreign companies to invest in the country and to benefit from its low wages and production costs. This implementation has also encouraged the growth of China’s domestic market.
…and Risks
The potential reward is tempered by risks inherent in a transitional economy and a market which is geographically vast and economically diverse. Multinationals must take care to understand and evaluate the risks.
Managing Exposure to Risk in China
This Accenture study, involving multi-tier research with more than 200 CEOs and senior executives in Asia, identifies both the attractions and the risks, and concludes that there are some pragmatic techniques to help limit total risk exposure:
- Develop local networks.
- Develop local expertise.
- Establish local flexibility.
- Manage risk locally.
- Assess your needs carefully.
Download the full report, "China–A Pragmatic View of Managing Risk." [PDF, 192K]
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