The process of doing business in China is not a difficult one if the basic steps for foreign registration are followed. What is essential is that the Chinese partners in this process be constantly kept informed of the nature of the business and opinions of the shareholders. It is the Chinese partners that are the only significant factors in the application procedures. The basic application procedure is simple, and is guided by the Chinese national interest, that is, whether the investment will be profitable for the locality, and China as a whole, not just for the shareholders in the venture.
- Once the informal negotiations concerning the investment are made and plans drawn up, the local party (that is, the Chinese business team), must submit a report to the local trade and economic cooperation bureau. The purpose here is to submit a general idea of the business proposal to the local authorities. A more detailed report will be necessary later. Large business ventures (over USD $100 million) must also submit a report to the provincial bureaus as well.
- Detailed plans of the business venture need to be submitted to the same authorities, including feasibility reports, purpose and name. The local authorities at all levels must approve the project on other bases as well including environmental impact and financing plans. This step is for what is called an "approval certificate," which is a tentative agreement of the government for the foreign venture.
- Once approved, the application for a business license is the last step. The business license is the final approval of the government for the joint venture. As this process is proceeding, the Chinese party needs to begin actions with the bank, as well as the filing all important export-import papers that the government requires. This also includes such steps as providing insurance, tax papers and commodity inspection papers.
- The "Doing Business" project has several more detailed steps that one needs to follow. The two most important are making certain that the business registers with both the social welfare department, the police department and the career services center in the relevant locality for proper hiring and firing measures (Reference 2).
- Keep mind that these procedures rely entirely on the action of the Chinese side of the equation. All important actions in terms of getting a business license should be done by the Chinese national and put through the government and party apparatus, represented by the bureaus mentioned above. All power centers of party and government authority are necessary for approval, not just those who deal in business or taxation. The Chinese here hold business to be a holistic science, not merely a money making enterprise to take advantage of Chinese workers and low wages.
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