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by bobjordan 2769 days ago
American here. I own two different companies in China.

“In order to do business in China, non-Chinese companies must Partner with a Chinese company.”

These days, what you’ve asserted here, is only true in a very limited set of circumstances.

For example, one of my companies is an engineering/supply chain consulting firm and the other is a fully licensed CM factory. With our factory, I have the China government paying me VAT tax rebates on export. I don’t have a Chinese partner, for either of these companies.

That said, it is very difficult to get setup here, without a Chinese partner. It is a difficult convoluted process. And, the locals have no incentive to see a foreigner succeed.

But if Americans want to own a private factory here, and more fully control their own IP and what they allow Chinese nationals to see. From my view as an American that owns a factory in China. They can do it!

Get on a plane, come over here, stay a couple years getting it done, and voila, you own your own factory in China, without a Chinese partner.

2 comments

That’s because China now homegrows its IP. The right time to control this would have been 1978, not 2018.
Do you speak Chinese fluently? I'm guessing this would be difficult to do if not...
My Chinese is still pretty basic. Yes, learning some conversational Chinese and a few hundred Chinese characters pretty quickly, is required, if only to keep sane. But, my Chinese communication skill wasn’t/isn’t/hasn’t been a critical key success factor for business success. More important has been, utilizing employees well and having the sense to recognize and call “bullshit” when needed. Like, if a process seems illogical from a good business practices or efficiency point of view. And someone is telling you something that seems wrong. It’s probably wrong, and they don’t know what they are talking about. And, learning quick, most of what you see here in China, is not as it appears on the surface. Underneath, it’s probably a rats nest. Being a good detective is required to survive.
How easy is it to get your money out of China?
Not very easy. The best structure seems to be, to setup a parent company in Hong Kong. Then, setup a wholly owned subsidiary in China. Then, just send enough money every month to keep the China operations going. It is easy to get your money in and out of Hong Kong.
I went to Hong Kong earlier this year, and I was amused by how there were luxury watch shops seemingly everywhere. My first assumption was that they were for laundering money out of the mainland.
There are likely more than enough rich people living in and traveling to Hong Kong to organically keep these watch shops solvent.
Yup. Flying with hard currency or equivalents is difficult. Just don't bring the receipts or boxes for your new watch, bracelet, ear rings, and neck chain.
I've seen that chocolate and baby powder smuggling is big in Hong Kong.

https://www.youtube.com/watch?v=YQm5FZMforg

To think about going to China, you're going to have to think about how to LEAVE china first

"once the news goes out that you will be leaving China, alleged creditors will come out of the woodwork. The tax authorities will come up with taxes that you owe. Your landlord will explain why you owe it way more than you thought you did. Your suppliers will send you bills for items they never actually gave you. Your employees will demand all sorts of severance."

https://www.chinalawblog.com/2018/09/how-to-terminate-your-c...