Is Doing Business in China Losing its Allure? MBA News

The attraction of doing business in China for international companies has been well-documented.

However, in a conference held at Germany’s Mannheim Business School, guest speaker and journalist Nina Trentmann outlined why the benefits to foreign companies doing business in China may be waning.

Nina Trentmann, a dual master’s degree graduate of the London School of Economics (LSE) and Shanghai’s Fudan University is currently the UK business correspondent for Germany’s Die Welt in addition to reporting on China, as seen in this recent feature for USA Today.

At the Mannheim Business School conference, Trentmann argued that the biggest problem affecting international companies’ capacity for doing business in China lies with the country’s increasing levels of regulatory scrutiny. Multinationals under continuing investigation were cited by way of example - Glaxo Smith Kline for alleged bribery and price escalation and Microsoft for possible violations of Chinese antimonopoly laws.

Moreover, conditions such as low labor and production costs, that allowed foreign companies to reap rapid dividends, have been on the way out for some time.

Mannheim Business School audience urged to have more realistic expectations

Nina Trentmann’s talk and the event’s subsequent discussion, entitled ‘China: (No longer) the "Promised Land" for foreign companies?’ concluded that China still presented tangible opportunities but that businesses must be more realistic in their expectations.

The need for businesses to truly understand and appreciate the culture of doing business in China was also reinforced - so as not to fall foul of its distinct standards and laws. As China’s business landscape evolves, putting together proper compliance and risk assessment frameworks is critical to success, according to Trentmann.

The event at Mannheim Business School, attended by businesses throughout the region as well as students, was part of its regular speaker series known as Sino-German Business Insights. It was established under the EMBA program offered jointly between Mannheim Business School and Tongji University – you can read an alumnus’ story here.