48% of foreign businesses fail in China within 2 years of entering into the market (Source ACBW 2013). This is a staggering number. Here are some of the reasons for this high failure rate:

  • Pilfering and theft from the Company including loss of valuable intellectual assets
  • Lack of research and due diligence
  • Failure by companies to customise their goods and services to suit the Chinese market they supply
  • Failure to recognise the vast regional differences within the Chinese market.  While it is one  country it is a country of many different regions and cultures
  • Failure to obtain and listen to local advice
  • Bad appointments at senior management level
  • Lack of understanding of the local competition, very often underestimating this local competition

Protection of intellectual assets in China is important and needs to be considered before any commercial activity starts in China.