The tangle of red tape involved in tax, compliance, customs clearance, business registration and so on can overwhelm small firms. Alexandra Voss of the German Chamber of Commerce points out that local firms often work overtime and on weekends during negotiations—and that foreign SMEs with staff shortages and little local knowledge can quickly get overwhelmed.
A bigger snag is that getting China right demands a huge amount of attention from the top brass, says Franklin Yao of Smith Street Solutions, a consulting firm that advises firms keen to enter China. The problem is that the market is enormous, complicated and opaque. It is also hyper-competitive, thanks to a proliferation of both low-cost locals and deep-pocketed multinational companies.
For intrepid SMEs still keen to try, help is at hand. All developed countries have trade offices and business chambers devoted to helping smaller firms clear the many hurdles. Consultants are also coming up with new ways to connect these firms to unfamiliar customers.
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