How to Enter China: Choices and Lessons

Whether or not foreign companies can succeed in China is largely determined by how they enter the market. This book offers insightful lessons to international managers in this area. It integrates views of both foreign business and Chinese government, describes entry choices and related governmental policies, compares pros and cons of each entry choice for foreign firms, and provides a series of thoughtful advice to business people. The book illuminates how to enter China for international corporations seeking preemptive opportunities and long-term competitive positions abroad. It presents China’s investment environment at the turn of a new century; outlines the impact of China’s WTO membership on these companies; articulates each of the entry mode choices available to foreign companies; analyzes factors underlying entry mode selection and equity ownership arrangement; and provides insight into entry mode selection from case studies. It also synthesizes relevant literature, offers managerial lessons regarding entry strategies, and illustrates Chinese government views and expectations of MNCs. By choosing an entry mode that fits organizational capabilities, objectives, and environmental contingencies, foreign businesses can accomplish their strategic goals, prevent uncompensated exposure of proprietary knowledge, and mitigate transactional hazards that may be precipitated during allocation and local operations. Students taking a Doing Business in China course, executives interested in foreign investment, and scholars interested in international expansion will find How to Enter China invaluable for those purposes. Yadong Luo is Professor of Management, University of Miami.