Managing business risks in China

Managing Business Risks in China I,. Zhuang, R. Ritchie and Q. Zhang

A LL BUSINESS ACTIVITIES INVOLVE RISK. This risk is generated both externally and from within the organisation itself. Whilst the increasingly volatile environment is usually cited as the major source of risk to the organisation the strategies, structures and decision takers within the business are equally important in determining the exposure to risk. It is often argued that there is a direct correlation between risk and reward. One should recognise that taking higher risks will not always result in the promise or realisation of higher rewards. There is no doubting the scale of consequences for many businesses from the increased exposure to risks, often resulting in the loss of the entire business. The recent collapse of Baring Bank provides an example of the scale of the consequences and the contribution that internal factors may make towards the degree of risk exposure.

In the past two decades, the rapid economic growth in China, has triggered an upsurge of foreign direct investment (FDI) inflows to the country. Motivated by the idea of establishing a foothold in the largest potential market of the world, foreign investors have poured in, hoping to make their fortune in this largest emerging market. However, not everyone has been rewarded with handsome profits, due to unforeseeable forces and the consequent risks.

A considerable amount of research has been carried out, examining FDI opportunities and their associated risks,’ and offering advice on various aspects of investing in China.’ Intending to add to the current understanding of FDI in China, this article focuses on the external sources of business risks. It seeks to bring to the attention of investors and management the potential problems they might encounter when they do take their business to China and to suggest measures that may be taken to minimise the impact of these problems and risks. Based on a recent empirical study of the perceived risks associated with foreign investment in China, it also draws experiences from other sources.

According to Porter and Robinson3 there are three

r In the past two decades, the rapid economic growth in China has triggered an upsurge of foreign direct investment. Attracted by the enormous market potential, foreign investors have poured into the country but not everyone has been rewarded with the promised handsome profits, due to unforeseeable forces. Based on recent research involving Sino-foreign Joint Ventures, this article seeks to highlight the potential problems investors might encounter when they do take their business to China. Measures that may be taken to minimise the impact of these problems and their associated risks are identified and emphasised. 0 1998 Elsevier Science Ltd. All rights reserved

chief forms of FDI investment in China, namely, the equity joint venture (EJV), the co-operative joint venture (CJV), and the wholly foreign owned enterprise (WFOE) (p.91--102). However, for the purpose of this paper, the term foreign funded enterprise (FFE) will be used to include business entities falling into any of these categories.

Economic Growth and Foreign Direct Investment in China Since the beginning of the 199Os, China has achieved consistently high rates of economic growth, as shown in Table 1. Compared with other countries, China’s state economy has been growing at an annual rate of 10% or over for four consecutive years, a rate unmat- ched elsewhere in the world. According to the World Bank, the gross domestic product of China in 1992 was $506.1 billion, which ranked the eighth largest

Pergamon PII: S002&6301f98)00058-2

Long Range Planning, Vol. 31, No. 4, pp. 606 to 614, 1998

0 1998 Elsevier Science Ltd. All rights reserved Printed in Great Britain

0024-6301/98 $lQ.OO+O.OO

/ 607 \

World Average 2.2 0.8 1.4 2.3 3.1 3.6

Developed countries 2.0 0.3 2.0 1.8 2.7 2.7 U.S.A. 0.8 -1.1 2.6 3.1 3.7 2.5 Japan 4.8 4.1 1.3 0.1 0.7 1.9 Germany 4.9 3.6 0.8 -2.1 2.3 2.8 U.K. 0.4 -2.2 -0.6 2.0 3.3 3.0 France 2.5 0.8 1.2 -1.0 1.9 3.0

Developing countries 3.5 3.9 5.6 6.1 5.6 5.6 China 3.9 8.0 13.6 13.4 11.8 10.0 India 4.9 1.0 4.6 4.5 5.2 5.5 Republic of Korea 9.5 9.1 5.1 5.5 7.6 7.3 Singapore 8.3 7.0 6.1 9.9 10.1 8.5 Malaysia 9.7 8.7 8.5 8.0 8.6 8.3 Indonesia 7.2 6.9 6.3 6.7 7.0 7.2

*Estimated figures. Source: Beijing Review, 4-10 March 1996, p.22.

economy in the world behind the U.S., Japan, Germ- any, France, Italy, the U. K. and Spain.

Like the Asian Newly Industrialised Economies (NIEs) during their early stages of development, Chi- na’s rapid economic growth in the past decade or so has been accompanied by a rapid growth of Foreign Direct Investment inflow. According to The People’s Ddy(28 October 1993), between 1979 and September 1993,153,580 FDI projects were approved by the Chi- nese government, with a negotiated fund of $193 billion. In 1994 alone, the FDI into China was over $31.54 billion.” By 1993, China had become the world’s second largest FDI recipient, second only to the U.S5

The spectacular growth of the Chinese state economy and the FDI inflow has attracted much attention from the media, business and academic communities. Many commentators and researchers are looking for logical explanations for such rapid growth; others are keen to find out whether this growth is sustainable.’ On the subject of FDI in China alone, numerous research based articles have been written, giving advice on issues ranging from strategic options7 to partner selection,8 and to practical steps that should be taken to ensure success.’ As the Chinese state economy continues to grow, further expansion of FDI is expected in the years to come.

Evidence of Business Risks The Sino-U.S. joint venture with Unilever is one of the FFEs which has learned about both the business opportunities and the risks involved.g The company has established many joint ventures with Chinese companies with activities ranging from manu-

facturing ice creams, detergents, and toothpaste to tea and chemicals. Many of its products are now house- hold names both in China and abroad. Unilever has been in China since the 1920s when the company began making Lux soap. Its operation continued until 1949 before it went into a period of inaction stretching over three decades. It was not until the late 1980s that Unilever became active again in China. By this time, one of Unilever’s major product ranges was doing extremely well in Hong Kong and many other countries. The product was sold under a trade mark adopted after 1949 when the People’s Republic of China was founded, and the company had failed to register the trade mark in China. Subsequently, Unil- ever fought a legal battle against a counterfeiter of that particular product using an identical trademark. Even with the best legal advice, Unilever still lost its case because the counterfeiter had registered the trade mark in China. This case might have been result of an oversight on Unilever’s part but it highlights some of the problems many international joint ventures have to deal with on a regular basis.

It is virtually impossible to gather evidence from the Chinese press that suggests that FDI activities in China can ever go wrong. But in the British press, almost every week there are articles written about the problems encountered by companies investing in China, which give the impression that “there is no worse place to invest than China”. Just how risky is it to invest in China? Although there are lots of media reports on the subject, there is little concrete and objective evidence available to answer this question convincingly. However, FDI continues to grow in China despite the potential risks. In his recent article, Luo” compares FDI inflows in China with other selec-

Long Range Planning Vol. 31 August 1998

ted countries. According to him, between 1990 and 1993, FDI inflows in China rose from $3,755 million to $27,769 million whilst in the U.S. FDI during this period declined from $48,422 million to $31,519; and in the U.K., FDI in 1993 was down to El4,449 million, less than half the figure recorded in 1990, $32,897. There are always some investors who are willing to make short-term sacrifices and take risks in exchange for long term profitability, but this group would not include all the foreign investors in China.

Whilst acknowledging the existence of major risks, Shenkarl argues that justified criticism about the investment environment in China tends to “conceal the success of many China-based IJVs (International Joint Ventures)*“. He reports that “Of the 120 U.S.- PRC IJVs studied by the National Council for U.S.- China Trade (1987), only a ‘handful’ appear to have failed”. He goes on to suggest that much of the criticism of FDI in China “also tends to neglect the reality that IJV problems are not unique to the PRC”.

In addition to Shenkar’s work, there have also been studies looking into problems and risks and remedies associated with joint ventures in China;l’z” however, the authors believe that the current understanding on FDI related risks is far from complete, for a number of reasons:

There is too much sensationalised media coverage which inevitably distorts the true picture. Most of the articles on the subject tend to be based on studies carried out a few years ago. As the economic reform continues and China learns to operate more effectively within the framework of market mechanisms, the mix of factors which were pre- viously regarded as sources of risk may have chan- ged. Potential investors need to keep abreast of these changing situations to minimise their exposure. In response to criticism by the international business community, China has over the years made considerable progress in improving the investment environment for FDI. The unification of the income tax on both domestic enterprises and FFEs,” the reform of the foreign exchange market,13 the reforms in the fiscal and banking sectors, and the proposed introduction of a free trade systemI are just a few examples.

Perceived Business Risks Building on the experiences derived from previous studies, the authors carried out a study in which selected FFEs in China were asked to share what they perceived to be the most significant risks to their business operations.

*The explanatory note is given by the authors.

Objectives and Research Methods The principal objectives of the study were to: (a) establish a better understanding of the problems and risks affecting FFEs in China; (b) disseminate results of interests to other potential investors in the China market; and (c) explore ways in which these problems may be addressed by organisations and the impact of the risks minimised. The key emphasis was to capture the first-hand experience of existing FFEs in China. Issues concerning the design, sampling and execution of the study have been discussed in great detail in another paper15 and therefore will not be repeated here.

The initial thought was to opt for a survey based methodology with the questionnaire developed and piloted in the U.K. and administered to companies in China whilst asking the respondents to return their completed questionnaire to the U.K. for analysis. To facilitate this approach, an unsuccessful attempt was made through the official channel to obtain a copy of contact details for all the FFEs operating in the coastal regions of China. As the primary study of this project was carried out over two and half months, and because of the difficulties in gaining access to the companies, one of the authors made a short visit to Guangdong where personal contacts secured the co- operation of 22 companies.

When the Chief Executives were contacted by phone, most of them agreed to take part in the questionnaire survey but only ten could arrange an inter- view at a mutually convenient time. As a result, the sample was divided into two groups, one for a questionnaire survey and the other for in-depth interviews. The former consisted of 12 medium-size companies and the latter were 10 large companies. Figure 1 shows their key characteristics including their industrial activities, the countries of their overseas partners and their registered capital.

Following a preliminary literature review on business risks and their management, a questionnaire was developed and piloted. The revised questionnaire was sent at the end of July 1995 to the 12 participating FFEs, 10 of which promptly returned the questionnaire. Personal visits were made to the other 10 companies where structured interviews were carried out using the same questionnaire as a guide. The FFEs studied are shown in Table 2.

Key Findings and Discussion The data collected using these methods were analysed in a number of ways including: descriptive statistics and cross-tabulation for quantitative data, and con- tent analysis for qualitative data. In this article, only the results relevant to managing risk will be presented.

Managing Business Risks in China

/ 609 \

Interviews Mail Survey*

1. Asia-PepsiCo Ltd 2. Foshan Hai-Ye Development Group Corporation 3. Giordano Corporation 4. Golden Field United Textiles Ltd 5. H. B. Electronics Ltd 6. Pacific Concord Ltd 7. Pilkington Corporation 8. P & G Corporation 9. Yaohua United Ltd

10. Unilever Corporation

1. Guang-Dong Textile Enterprises Ltd 2. Hai-Hua Properties Management Co. Ltd 3. Ji-Fu Toys Ltd 4. Nan-Yue Corporation 5. Ri-Qing Food Ltd 6. Shun-De Gao-Bao Vehicles Repair Co. Ltd 7. Wing-Shan Enterprises (Holding) Ltd 8. Xing-Hui Corporation 9. Yong-Chang Restaurant & Entertainment Co. Ltd

IO. You-Heng Electronics Ltd

*Only the ten companies which returned the questionnaire were listed.


Risk awareness among FFEs. Preliminary research suggested that when people become aware of the risk, their instinct will prompt them to do something about it. In relation to business risk, whether measures are taken and what they are, tend to reflect how much the companies are aware of the risks they are involved in. Since business risk has not been a subject widely taught in schools and universities or routinely incorporated in “on the job” management training, the most common approach taken by the companies involved in the study was attending risk management courses. One major drawback with this approach is that it gives no indication of the level of risk awareness among managers of other companies who have not attended any risk management courses. Managers from some FFEs appeared to be more aware of the risks involved in their business ventures than others. The level of risk awareness, measured in terms of attendance at risk management courses, had a posi- tive correlation with size of total capital employed. The same applies to the use of risk assessment tech- niques, i.e., the process of evaluating risks prior to major decisions (see Fig. 2).

Even among the smaller companies who either could not afford or did not see the need to spend money on attending risk management courses, some measure of risk assessment was carried out before any major business decision was taken. Some companies do so by examining the causes of major corporate failures within the same industry and under a similar external environment, whilst others may opt for studying the supporting and restraining forces sur- rounding their business venture.

FIGURE 2. Awareness of risk.

Politics presents the most serious source of risk whilst culture the least. When asked to identify the most serious risk from a list including: politics, foreign exchange, cultural differences, environment, management and finance, all respondents nominated “politics” without any hesitation (see Fig. 3). Despite the widely acknowledged cultural differences between China and most other nations in the world, culture was not regarded as a high risk factor. This might have something to do with the fact that 40% of the FFEs studied were jointly funded with Hong Kong partners who were no stranger to the Cantonese customs.

It pays to avoid government intervention. Many companies view government actions, such as a change in interest rate, artificially holding prices down in a time of high inflation, and the with- drawal of preferential treatment from FFEs, etc., as “government intervention”. Fifty five percent of the companies reported that they suffered from serious government intervention and 35% regarded the amount of government intervention they had received as being average (see Fig. 4). As the primary aim of this study was to evaluate the perceived business risk, the words “serious”, “average” and “little” were meant to measure the subjective perception of indi- vidual Chief Executives who took part in the study. Typically, managers see a given course of action by the government as serious intervention if it results in substantial financial or opportunity loss.

The FFEs that had suffered most from government intervention tended to be those aiming primarily at the domestic market whilst those who suffered the least tended to be more orientated towards the global market. Figure 5 illustrates the results.

As can be seen from Fig. 5, the more FFEs rely on imported technology and skills, and exports, the less likely they are to suffer from government intervention. This seems to be in line with the current


FIGURE 4. Extent of government intervention. I

FIGURE 5. Rate of import/export activities and government intervention.

FDI policy in China, which favours the transfer of technology, managerial know-how and exports.

Top ten investment problems identified. The questionnaire survey and in-depth interviews also identified a number of areas where problems are likely to occur, with varying degrees of impact on FDI activities in China. Table 3 shows details of the ten most serious problems.

As shown in Table 3, 90% of the FFEs managers contacted saw the inconsistency of government policy as the most problematic issue concerning their business operation. This seems to tie in with the repu- tation of the Chinese government which is known for frequently changing its policies without warning. The second most serious problem emerged was the unreliable legal system, which is also widely acknowl-

TABLE 3. Problems experienced by FFEb in china

Specific % of Ranking Problems Response

1 Ever-changing policy 90% 2 Unreliable legal system 85% 3 Control over import and export 70% 4 Inflation 60% 5 Market disorder 55% 6 Poor information & 45%

communication systems 7 Bureaucracy 45% 8 Devaluation of Chinese currency 30% 9 Crumbling transport system 20%

10 Business credibility 15%

edged. However, most Chief Executives involved in the study could not be very specific about these claims. It will take some years before the Chinese society can be transformed from one governed by ever-changing rules to one governed by law.

Although these are not regarded as the most serious problems, poor communication systems and the crumbling transport system are increasingly becom- ing bottle-necks in the Chinese state economy. Unless swift improvement in these areas are made, the sus- tainability of economic growth is in serious doubt.

Implications for Investors Most of the factors that emerged as sources of potential business risks in China fall into two categories, political and economic, both of which are invariably related to instability or uncertainty in the country’s political system. Culture was not identified as one of any great significance particularly to businesses with links to Hong Kong, but to a foreign investor with little understanding of the Chinese culture, it can still cause problems. Some of the measures required from the overseas partner under the circumstances are: (a) be prepared to take time to observe and learn, (b) be willing to confront one’s own preconceptions, and (c) be willing to adapt. There are also a number of books available, most noteworthy of which are: (a) m China Business Guide by Robin Porter and Mandi Robinson (1994),” and (b) Kevin B. Bucknall’s Cultural Guide to Doing Business in China (1994)." The following paragraphs concentrate on political and economic risks.

Managing Political Risks From an FFE’s point of view, “political risk” usually refers to changes in the political decision-making in the host country, and the effect of this is known as


“intervention”. Although no business can ever be immune to political risk, in China, “ever-changing government policy” seems to present the most serious threat to FFEs’ operation. For instance, in late Sep- tember 1996, the Microsoft Corporation was banned from selling its simplified Chinese character version of Windows 95, which was found to contain phrases,

e.g., “communist evils”, “Taiwanese independence”, etc., which were not acceptable to the Chinese govern-

ment (Singaporean ‘$&T#p’,* 30/09/96). A common approach adopted by many FFEs includ-

ing those in the study, was to try to avoid the intervention when it is about to happen. This is usually done by decreasing the assets at risk, increasing short- term cash outflows, reducing investment and looking for short-term profits. Another risk-reduction strategy is arranging a joint-venture.17 This has been the type of direct investment preferred by the Chinese government. These two strategies seem to have become less effective over the years. As many developing nations have learnt to police the financial activities of FFEs, asset transfer between global sites has become more difficult.

Instead of running away from it, a more effective way of dealing with government intervention may be to increase the company’s bargaining power. This can be achieved in a variety of ways. Sometimes, investors can turn an awkward situation to their advantage. For instance, during a recent conflict in the Taiwan Straits, the Chinese government was keen to reassure the Taiwanese investors that the war-game was aimed only at the movement towards Taiwanese independence. Many Taiwanese investors actually used this to ask the government to express their reassur- ance in deeds as well as words.

The findings presented in Fig. 5 suggest other ways for a foreign investor to increase bargaining power: by reducing the degree of dependence on the domestic market and increasing its reliance on international markets in terms of technology, managerial know- how and export; so for foreign investors who are primarily interested in establishing a market presence in the Chinese market, their bargaining power can be strengthened by using imported technology, management know-how or by sourcing of essential com- ponents from outside China.

Managing Economic Risks According to the research [Fig. 3), apart from policy inconsistency, what worried investors the most were economic factors such as foreign exchange, import/

*An electronic Chinese newspaper published in Singapore, which can be downloaded from the Internet. The site address at the time of writing was-http:l/www.asial.com.sg/zaobao/pages/ zg0051.html

export control, and high inflation. The core objective in managing economic risks, for many FFEs in China, must be to minimise or avoid the financial losses which can be caused by these factors.

There are signs that the Chinese government is doing something to boost investors’ confidence. In 1994, as Gu14 reported (1996), “China abolished dual exchange rates, unified the exchange rate of Renminbi (Chinese currency unit) with other currencies and introduced a unitary floating of exchange rate based on market supply and demand”. These measures were part of China’s attempt to bring the Chinese economy into the world economic system.

As regards foreign exchange control, a new set of regulations went into effect on 1 April 1996.” Accord- ing to these new regulations, “Profits, dividends and bonuses accruing to foreign investors” in FFEs in China need not be examined and approved by the State Administration of Exchange Control. The effect of this change still remains to be seen.

Also, according to the Financial Times (1 April 1996), “China is introducing sweeping tariff cuts on about 5000 items today” by more than a third, from 35.9% to 23%.lg According to the same report, there are still 34 agricultural items on which there will be quotas, but about 380 agricultural products would have their import tariffs reduced including those subject to quota. This may be seen as a further step to bring the Chinese economy in line with world standards.

Some of these government initiatives were introduced after the research was carried out and their effects were not examined. However, lobbying the Chinese government to adopt more favourable policies towards FFEs is no substitute for taking measures to minimise the potential impact caused by any sud- den change in the government’s economic policies. There are other measures which FFEs can take to safeguard their interests, which include product diversification, flexible marketing and flexible manufacturing.

Much has been written about how a “balanced portfolio of products” can serve to reduce the overall risk of the business should any of the product markets suddenly collapse. ‘O “Flexible marketing” means that firms need to be willing to adapt their marketing mix according to changing market conditions. For example, if there is little competition in their market, when the host country devalues its currency, the firm could increase the export price in the host country’s currency. On the other hand, if competition is strong, the firm could lower the export price in a foreign currency. During the research, it was interesting to discover that the Yaohua store in Shen-zhen avoided the impact of Renminbi devaluation by displaying all but 10% of its products in Hong Kong dollars. The company had little difficulty in generating profits and repatriating these overseas.


[ 613 \

“Flexible manufacturing” refers to the FFEs’ ability to increase its competitive advantage by making effective use of the host country’s production resources. If the overall wage rates and other production costs are low, as is the case in many developing countries, such as China and Vietnam, labour intensive operations will be more competitive. However, continuing economic growth will usually produce an increase in liv- ing standards, which in turn will push up wage rates making labour intensive operations less profitable. When this happens, firms can either transfer their existing low-tech operations elsewhere or invest in a more high-tech operation in China.

Conclusions According to the findings which emerged from our study, among the problems facing foreign investors in China, the lack of consistency in government policy and market irregularity concerning the foreign exchange system and high inflation were seen to present the most serious threats. Contrary to our expectations, cultural differences and the country’s under developed infrastructure were not perceived as serious sources of business risk.

The perceived business risks facing foreign investors in China fall into two categories: political and economic. Political risks should be tackled head-on by utilising the bargaining power of the Foreign Funded Enterprises as a group more effectively, and through maintaining closer linkages with other countries through new technologies, management know- how, suppliers and exports. Product diversification, flexible marketing and flexible manufacturing strategies could be effective measures in combating economic risks. Foreign Funded Enterprises should also be continuously lobbying the government.

The five key messages that this research and previous work with Chinese organisations suggest are:

l Develop and maintain an effective communication

channels with reliable contacts in China. There is no substitute for direct links with the marketplace especially one whose true situation may be distorted by an over-zealous media.

l Monitor closely the changes in legislation, official procedures and practices which affect the marketplace, normal commercial relations and the operation of the foreign exchange markets. The evolution of the market economy is increasingly rapid and failure to spot fundamental changes may have sev- ere consequences.

l Undertake a rigorous assessment of the commercial and financial risks both prior to and after com- mitting oneself to the investment. The opportunities of this developing market are highly attractive but there are many potential pitfalls on the road to realising these.

l Recognise that the administrative processes associated with gaining access to markets, manufacturing and distribution resources and financial capital may be very slow and cumbersome. Proposals employing local labour sources, manufacturing for export markets and providing opportunities for technology and skill transfer will receive priority consideration,

l Emphasise the specific values and skills that the organisation can bring to the Chinese economy in terms of new technologies, access to overseas markets, managerial and organisational skills, design capabilities, etc.

Although in recent years, measures have been taken by the Chinese government to improve the conditions for foreign investment, some have proved more effective than others. There is no doubt that foreign investors will always find room for improvement until such time as the developmental gap between China and the developed countries is closed and the attraction for investing in China vanishes completely. This is surely not going to happen this side of the millennium. So, be philosophical about it: where there is opportunity, there is always risk.

References

1. 0. Shenkar, ‘International Joint Ventures’ Problems in China: Risks and Remedies’. Long Range Planning, 23(3), 82-90 (1990).

2. D. G. Woodward and C. F. Liu, ‘Investing in China: Guidelines for Success’. Long Range Planning, 26(2), 83-89 (1993).

3. R. Porter and M. Robinson, The China Business Guide. Ryburn Publishing, Keele University Press (1994).

4. W. Munchau, ‘Cultural Wall Falls to DM’s Incursion: A Report on German Investment in China’. Financial Times, 27 July. p.15 (1995).

5. Yadong Luo, ‘Evaluating the Performance of Strategic Alliances in China’. Long Range Planning, 29(4), 534-542 (1996).

6. F. Preiss, ‘The Pacific Rim: Powerhouse of the 21st century’. Understanding Global Issues, U.K. (1995).


_ I. V. H. Kirkoalani, K. C. Mun and M. Hui, ‘Hong Kong and China: Strategic Options for

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

Investors’. Long Range Planning, 25(2), 44-51 (1992).

K. W. Glaister and Y. Wang, ‘U.K. Joint Ventures in China: Motivation and Partner Selection’. Marketing intelligence & Planning, MCB University Press. 11(2), 9-15 (1993).

0. Zhang, Risk Management: An Empirical Study on Foreign invested Enterprises in China (An MBA Dissertation, Staffordshire University Business School, U.K.) (1995).

S. Goldenberg, Hands Across the Ocean: Managing Joint Ventures. Harvard Business School Press, Boston (1988).

P. Epser, ‘Managing Chinese Employees’. The China Business Review, July-August. 24- 30 (1991).

N. Li, ‘Official on Trend of China’s Taxation Reform’, Beijing Review, 39(4), 22-28 January, 21-22 (1996).

R. Li, ‘Reform of Foreign Exchange Market Proves Successful’, Beijing Review, 39tl I), 1 l- 7 March, 17 (1996).

Y. Gu, ‘China to Establish Free Trade System’, Beijing Review, 39(11), 1 l-7 March, 15-6 (1996).

L. Zhuang, R. Ritchie and 0. Zhang, ‘Foreign Direct Investment in China: Opportunities and Risks’. Submitted to the conference on Managing in a Global Economy VII: Europe Towards the 2 Ist Century-Convergence and Divergence (I 996).

K. B. Bucknall, Kevin 6 Sucknall’s Cultural Guide to Doing Business in China. Butterworth Heinemann (1994).

F. J. Contractor and P. Lorange, ‘Why Should Firms Co-operate? The Strategy and Economics Basis for Co-operative Ventures’. In Contractor and Lorange eds, Co- operative Strategies in international Business. Lexington Books, Lexington, MA (1988).

M. Wei, ‘New Regulations on Foreign Exchange Control’. Beijing Review, 39(15), 8-14 April, 4 (1996).

T. Walker, ‘China Cuts Tariffs by a Third to Aid WTO Ambitions’, Financial Times (the Internet version), Monday 1 April (1996).

R. Brown, ‘Making the Product Portfolio a Basis for Action’. Long Range Planning, 24(l), 102-110 (1991).

Dr L Zhuang is a Senior Lecturer at Stafford- shire University Busi- ness School, U.K.

Dr R Ritchie is Head of Business and Manage- ment Studies at Man- chester Metropolitan University, U.K.

Qi Zhang is a purchaser for the Swedish company Koilstsmide in Hong Kong.


Documents

Managing business risks in China