Business in China 20

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Author: Berk Guneri

Loyola University New OrleansINTB-G893

International Business Practices in ChinaDr. Wing Fok

A report for U.S. companies that are interested in developing markets in China.

Statement of Confidentiality

This report contains proprietary information. Please maintain the confidentiality of all proprietary information during and after the term of the fall 2010 semester. Also, please refrain from using this proprietary information in any other manner-including in any other business-without the Berk Guneri's (the author) written approval.

The author’s confidential information, knowledge, and know-how include all information and other materials or data Berk Guneri designates as proprietary and confidential, without limitation.

The author provides a copy of the report to Dr. Wing Fok (the recipient) during the term of fall 2010 semester. The author reserves the right to revise and otherwise modify the report. The report is the sole property of the author.

The recipient must keep its copy of the report current and complete. The master copy, maintained by the author, shall control in all disputes over contents. The recipient shall not disclose any information to third parties without the written consent of the author.

I have read and understand the Statement of Confidentiality and will abide by its terms and conditions.

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Executive Summary

This report has been prepared to help U.S. companies and entrepreneurs that are interested in

developing markets in China. Various resources as well as personal observations are employed in the

making of this report. Currently, China is the second largest economy and has the highest labor force

in the world- figures around 813.5 million people. Numerous investment opportunities are available

to U.S. companies and entrepreneurs in China. Some of these opportunities are highlighted in latter

sections of the report.

Other sections include, but not limited to, economy, culture, and characteristics of Chinese

entrepreneurs. The report also provides information about the entry strategies for U.S. companies

intending to penetrate Chinese markets. Business environment in China is far more different than

U.S.A.; these differences, as well as the problems foreseeing China in the future, are indicated in this

report.

With an economy of $8.748 trillion and a real growth rate of 9.1% (2009), China promises real

returns to foreign investors. Typical exit ratio was around 26.4 in 2007. Currently, exchange rate in

China is 6.82RMB to a dollar. However, Chinese government is showing signs of relaxing the

exchange rate which would substantially benefit U.S. companies doing business in China. This

report is going to give first-hand experience to its readers in understanding the business environment

in China.

Table of Content

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s

Statement of Confidentiality............................................................................................................................... i

Executive Summary............................................................................................................................................ ii

I. Economy in China......................................................................................................................................1

II. The Role of the Government in Chinese Economy.....................................................................................2

III. Culture in China.........................................................................................................................................3

IV. Common Chinese Business Practices.........................................................................................................4

V. Characteristics of Chinese Entrepreneurs..................................................................................................6

VI. Challenges Facing Entrepreneurs in China.................................................................................................7

VII. Entry Strategies for American Companies.................................................................................................7

A. Import/Export.........................................................................................................................................8

B. Joint Venture..........................................................................................................................................8

C. Wholly Foreign-Owned Enterprises........................................................................................................8

VIII. Venture Capital in China............................................................................................................................9

Trend of VC Investments in China................................................................................................................10

IX. Second Largest Economy in the World; Is it Surprising?..........................................................................10

X. Problems Foreseeing China......................................................................................................................10

XI. Opportunities for U.S. Companies...........................................................................................................13

XII. Conclusion...............................................................................................................................................16

Works Cited.....................................................................................................................................................18

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I. Economy in China

With the formation of Peoples’ Republic of China in 1949, all resources and companies became the

state-owned enterprises (SOE) in China. The accounting rules and regulations were known as “Fund

Accounting”, and were characterized by their rigidity and uniformity. They were primarily used for

establishing information and reporting system for the implementation of national economic policies

and resource allocation in the planned economy. In particular, they were used for the maintenance of

administrative control over state-owned assets (SOAs) and to strengthen the financial discipline of

the SOEs and thereby safeguard SOAs. (InterChina)

In 1978, China launched “Four Modernization” reform program and introduced “Open door policy”

for economic growth. Four Modernization includes strengthening agriculture, industry, technology,

and defense. Reform movement also included tax incentives, monetary grants, and relaxed laws. In

1992, former Chinese leader decided to accelerate growth. Regarding the economic turnaround in

the last 30 years, CIA – The world fact book states, “In the late 1970s, reforms started with the

phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices,

fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified

banking system, the development of stock markets, the rapid growth of the non-state sector, and the

opening to foreign trade and investment. Annual inflows of foreign direct investment rose to nearly

$108 billion in 2008. China has generally implemented reforms in a gradualist or piecemeal fashion.

In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it

considers important to "economic security," explicitly looking to foster globally competitive national

champions. After keeping its currency tightly linked to the US dollar for years, China in July 2005

revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that

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references a basket of currencies. Cumulative appreciation of the Yuan against the US dollar since

the end of the dollar peg was more than 20% by late 2008, but the exchange rate has remained

virtually pegged since the onset of the global financial crisis. The restructuring of the economy and

resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2009

stood as the second-largest economy in the world after the US, although in per capita terms the

country is still low middle-income.”

The Chinese government needs good supply of educated people for manufacturing industries. China

has three education hubs: Beijing, Shanghai, and Xi’an. These three locations have the best

universities. Most companies are head quartered in Beijing due to most SOEs being located in there.

The Chinese government pushes SOEs to marketization in these days. The ratio of working

population over dependent population (dependency rate) is 64 percent. The region of Shanghai and

Beijing, Shanghai and Beijing are always rival cities, is already developed. The government wants to

develop Xi’an area now. In 15 years, Chinese government intends to develop inland west.

II. The Role of the Government in Chinese Economy

The Chinese government plays a big role in Chinese economy. Most of the firms in manufacturing

industry are stated owned. In the last 20 years, China has seen the involvement of private industries,

though it is still small compared to the SOEs. “The effective exercise of control over the economy

requires an army of bureaucrats and a highly complicated chain of command, stretching from the top

down to the level of individual enterprise. The Chinese Communist Party reserves the right to make

broad decisions on economic priorities and policies, but the government apparatus headed by the

State Council assumes the major burden of running the economy. The State Planning Commission

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and the Ministry of Finance also are concerned with the functioning of virtually the entire economy.”

(Encylopedia Britannica) The State Council in China controls all the resources required for heavy

industries. Three types of economic activity exist in China; 1) The ones involving mandatory

planning, 2) The ones involving indicative planning, 3) The ones involving free-market. Since the

accession to World Trade Organization, China received generous amounts of foreign investments.

“The largely bureaucratic nature of China’s economy, however, has posed inherent problems for

foreign firms that want to operate in the Chinese environment, and China gradually has had to add

more incentives to attract foreign capital.” (Encylopedia Britannica) Today, the government policy is

split between centralized planning and free-market economy with more emphasis going into

marketization of SOEs in the quest to establish a true free-market economy.

III. Culture in China

China is very diverse even though it does not seem that way, 56 ethnic cultures exists in China.

Some Chinese people love Mao, some hate him. Foreigners should be political talking about Mao

with strangers. Learning about Chinese culture is important for American companies willing to do

business in China. In China, Northern people consider themselves more civilized than southerners

(North: Xi’an, Beijing; South: Shanghai, Suzhou). Village people are not trained to cheat. They are

more honest than people living in urban areas. If Chinese people were perfect, they would not do

business with American companies as they would not need foreign assistance.

The most important culture aspect in China is the concept of “Face”. “In the PRC, face has to do

with the image or credibility of the person you are dealing with. You should never, insult, embarrass,

shame, yell at or otherwise demean a person. If you do, they will lose "Face". In ancient times, a

Chinese warrior chief, after losing a battle, may commit suicide because he has lost face. While this

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may no longer occur, the concept of "face" remains alive and well in China. Awareness of face and

its impact is an extremely important cultural issue. In the business world, negotiations should be

conducted to assure that the person at the other end of the table maintains face even if the deal

should not successfully conclude. His "face" may be dependent upon his ability to conclude the deal.

If not, he saves "face" if  he is the one to bring the negotiations to closure in a manner that he will

look best to his superiors, yet not impact you.” (Premier Star Co.)

Chinese people, like the rest of Asian cultures, are very brand conscious. Credibility is crucially

important for them. Be sure to let them know your credentials, such as the school you went to, the

places you worked at, the articles you published etc., beforehand so that you would gain respect. At

a dinner table, unless you are the guest of honor, do not sit facing the door. That place is reserved for

guest of honor and usually indicated by a special kind of napkin. Chinese people like to give

speeches in between dinner courses, be prepared for this. When someone solutes you, be sure to hit

his glass in lower position. Asking for rice filler in dinner indicates that food is not enough- avoid

this. When someone hands you something with two hands, receive it with two hands. Try to give

your business card with two hands; this is the proper way. Late arrivals are considered disrespectful.

Remember, respect is crucial; always pay respect to your hosts.

IV. Common Chinese Business Practices

Chinese business practices widely differ from the western counter parts. Certain practices must be

observed in order to carry effective communication and successfully negotiate a business deal.

Below are the key highlights of business practices in China. (Chan)

Respect the business cards – Chinese treat the exchange of business cards as hand shake.

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Establish relationship first and then do business – “China is a people-based rather than a law-

based culture. People in China build trust by “profiling” one another. They observe one

another’s behavior over time before they’ll do business.”

Always start the meetings with small talk and then go into business matters.

Do not insult someone in public – This would be considered as losing face (See part II,

“Culture in China”).

Avoid certain colors – “White is the color of mourning in the Chinese tradition” and

“Wearing a green hat” in Chinese means that someone’s wife is being unfaithful.”

Never give a clock for a gift – Giving a clock indicates attending someone’s funeral.

Be mindful of Chinese superstitions about numbers – i.e. the number four refers to failure.

Be mindful of “Guan Xi.” (See part IV, “Characteristic of Chinese Entrepreneurs”) – Always

try to establish a relationship before conducting any sort of business affair.

Smile – You can make more friends by smiling.

Speak slowly - Chinese businessmen consider it impolite to ask someone to repeat

themselves, so speak slowly to be understandable.

Always be formal in addressing people.

Don’t expect much eye contact.

Chinese businessmen like to smoke in meetings.

“Yes” does not mean the subject is affirmative – Chinese businessmen use “yes” to

demonstrate that they are paying attention. Do not take “yes” literally.

Avoid jargon – Many Chinese people learn English in academic settings and they are not

knowledgeable about day-to-day American terms. They would not ask you to explain

yourself as they do not like losing face in public.

Use metric system – Chinese people use metric system instead of British customary units.

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Meet face to face – Chinese would like to do business with people whom they personally

met.

To understand what they think, arrange one-on-one meetings – Chinese people are direct and

straightforward in one-on-one settings. In order to capture what they really think, arrange

one-on-one meetings.

Do not give expensive gifts – Expensive gifts can be seen as bribery by the Chinese.

V. Characteristics of Chinese Entrepreneurs

Young Chinese believe China is the strongest country in the world. Chinese think Americans are

naïve, because they think Chinese were through a lot of hardship which made them tougher than

Americans. Two types of business people exist in China, regular business people and ex-government

officials who tend to be corrupt and rude. Because of the language barrier between Chinese people

and foreigners, Chinese may seem rude. Therefore, knowing Chinese is important in conducting

business. Usually, Chinese people who do business with foreigners are elite class of Chinese people.

Chinese entrepreneurs are;

Less tolerant to risk and failure, also called “losing face.”

Opportunistic and focus on short-term strategy due to future uncertainty. They are skeptical

about how long the growth rate will continue and scared that the government may fail the

Chinese people again as it occurred in the past.

Able to take advantage of government policy and identify arbitrage opportunity.

Rely heavily on relationships (Guan Xi) which help win business contracts, speed up

government approval. Trade-offs in Guan Xi are corruption, bribery etc. Contracts are signed

not in the office, but on the dinner table or in the karaoke bar while drinking- Chinese

attitude: if you drink with me, we are friends and we can do business.

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VI. Challenges Facing Entrepreneurs in China

When doing business in China, entrepreneurs need to be patient, flexible, and, prepared for chaos.

Chinese people usually do not know what to do when faced with new situations. No success story

exists for a country transforming from communism to free-market economy. Chinese people are in

transition and they learn as they go. However, the Chinese are not necessarily bad people as they

have no previous example guiding them. China and USA are in different stages of development.

Foreign entrepreneurs penetrating Chinese market face with;

Lack of funding.

Political & legal uncertainty.

Government regulation and connection.

Difficulty accessing resources such as labor, infrastructure etc.

Lack of job loyalty.

Management level people tend to be more risk averse. Stock options are not well perceived.

Weak enforcement of intellectual property regulations.

Credibility- it is hard to establish trust for a new foreign company.

Lack of long term goals.

VII. Entry Strategies for American Companies

American companies should start out with small contracts, testing Chinese counterparts and go

bigger as trust is established. In China, it is often over promised and under delivered. American

entrepreneurs have three methods of entry to China. These are;

a) Import/Export (less profitable, less risky)

b) Joint Venture

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c) Wholly Foreign-Owned Enterprises (riskiest)

A. Import/Export

Start a company in Virgin Islands, which manages a company in Hong Kong, which distributes to

China. Find an attorney in Hong Kong for the start-up company to speed up the legal procedure.

This whole process cost around $10,000. This is the less profitable and the least risky method of

entry.

B. Joint Venture

“In a joint venture (JV) the partners form an independent and jointly-owned separate company to

achieve specific business goals.” (Marketing-in-China) Joint Venture is the easiest way for

American companies to enter Chinese markets. In theory JV works as the following; An American

Company forms a JV with a Chinese company which has the same set of business goals. A joint

venture in China is formed as a limited liability company under PRC company law. The most

important issue forming JV is who gets the control over company operations. (Dickinson) Having

the majority shares of JV does not guarantee effective control over the company- it is actually a

pitfall. It is important to maintain the power of electing the representative director and the company

general manager. It is also important to keep the power of making contracts. (Dickinson)

C. Wholly Foreign-Owned Enterprises

A Wholly Owned Foreign Enterprise (WOFE) is a limited liability company funded and operated by

foreign investment in mainland China. This option is becoming more popular in foreign investors as

it does not require a Chinese partner giving the full control to the investing company. It also does not

require large amount of capital funds. The minimum requirement for invested capital is RMB

1.000.000, roughly US$ 100.000. “WOFEs can be the result of acquiring an existing facility (M&A)

or a from-scratch development of an entirely new facility (greenfield investment).” (Marketing-in-

China) According to WFOE regulations, "Foreign investors are permitted to setting up a 100%

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foreign owned enterprise in industries that are conducive to the development of China’s economic

benefits, and not prohibited or restricted by China government." “A WFOE can only operate within

the business scope as set forth in its business license. If it decides to pursue other activities than the

ones mentioned in its scope of business, it will first have to gain approval from the relevant

authorities.” (China Orbit) Even though complete control over the company sounds good to foreign

investors, the lack of “Guan Xi” or personal relationships may create problems especially in

government approvals. The advantages of WFOE is; a) complete control over the company b) being

able to accept payments in RNB c) no risk of intellectual property theft by joint venture partner-

another pitfall for U.S. companies.

The easiest way of starting a WFOE is setting up an off-shore company in Cayman Islands or British

Virgin Islands which sets up an on-shore entity. WFOE in China, only in management level, controls

the on-shore entity (See figure 1)

Figure 1: WFOE Structure in China

Off-shore holding company →On-shore entity Management← WFOE (China)

VIII. Venture Capital in China

Most VC (Venture Capital) money goes to companies in expansion phase instead of start-up phase in

IPO or IT industry. Chinese government puts money to start-up phase. In China, VC return is

demanded in 2-3 years instead of traditional 10 years. Time to liquidation is around 2 years.

Trend of VC Investments in China

VC Investments in China have two phases. These are,

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Phase 1: Internet/Gaming/Telecom (Copycat business models; technology adaption was more

popular than technology creation, i.e.: Baidu1.)

Phase 2: More traditional industries i.e. Agriculture.

IX. Second Largest Economy in the World; Is it Surprising?

China has the highest labor force in the world with figures around 813.5 million people. It is not

surprising that China is the second largest economy in the world given the fact that it has a large

pool of inexpensive labor and a centrally planned government strategically arranging the work force

and resources. However, China’s wealth is not equally distributed among the population. All the

large companies in China are stated owned. . In this case, a large economy does not translate into

western style economies. Most of the incomes generated by SOAs are held in governmental level,

leaving little to people. Despite having an average of 8% growth rate, being the second largest

economy in the world and the first in developing countries of the recipient of foreign investments,

the per capita income of China is fairly low at around 6,600 USD. This puts China at 128th place out

of 179 countries in per capita income ranking, which translates as low domestic purchasing power.

X. Problems Foreseeing China

China has an unemployment rate of 4.3% in urban areas. Since most of the economic development is

concentrated at east coast (Beijing-Xi’an-Shanghai area), the unemployment rate in rural areas is

unknown and expected to be high. China has incomplete social security system, so people save for

future. There is a huge difference of income between rural and urban areas. According to

International Monetary Fund, the unemployment rate in rural areas will more than likely to worsen

over the next few years due to restructuring in the rural and state enterprise sectors. (Barnett)

1 Google like search engine in China.

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According to 2009 data in CIA – The World Factbook, China consumed 8.2 million bbl/day of oil

and produced 3.991 million bbl/day. The oil production gap per day was over 4 million bbl. China is

the second largest oil consumer in the world. According to China's Customs General

Administration, Saudi Arabia, Oman, Sudan, and Yemen already supply over 39% of China's crude

oil- other suppliers include Iran, Sudan, and Venezuela. “China's need for energy is projected to

increase by 150 percent by 2020; in order to sustain its growth, China requires increasing amounts of

oil. Its oil consumption grows by 7.5% per year, seven times faster than the U.S.” (The Institute for

the Analysis of Global Security) The increasing oil demand is due to industrialization and transition

from mass transit to personal vehicles. China is the largest automobile market in the world

surpassing USA. Despite the thirst for oil, Chinese gasoline prices are ranked the lowest among oil

importing countries. “China’s ability to provide for its own needs is limited by the fact that its

proven oil reserves are small in relation to its consumption. At current production rates they are

likely to last for less than two decades. Though during the 1970s and 1980s China was a net oil

exporter, it became a net oil importer in 1993 and is growingly dependent on foreign oil. China

currently imports 32% of its oil and is expected to double its need for imported oil between now and

2010. A report by the International Energy Agency predicted that by 2030, Chinese oil imports will

equal imports by the U.S. today. (The Institute for the Analysis of Global Security) Lack of oil

supply is the biggest hinder to sustainable growth in China. China can sustain current economic

growth in the next ten years as long as there is enough oil to quench its thirst.

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Another problem foreseeing China in the future is deflation due to insufficient demand and excess

capacity in short term. Figure 2 and 3 demonstrates the relation between total investment rate and

deflation thread in Chinese economy.

Figure 2: Total investment rate

Figure 3: Inflation/Deflation

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The other general problems are lack of unskilled workforce (machine is there, but there is no skilled

operator) and lack of fresh water supply in China.

XI. Opportunities for U.S. Companies

Exit ratio is substantially high in China when compared to rest of the world. (See below formula for

the definition of exit ratio)

Exit Ratio= IPO pre−money valuationEquity raised pre IPO

=26.4∈2007

In China, everything is booming especially property. Chinese government is shifting investments to

inland west in a hope to pull that area to same levels in east coast. Buying property in west,

especially in Chengdu, is a good investment. Chengdu is strategically important and very well

protected. As guidance, housing prices in east were 7000 Yuan/m2 in 2006; it is 30,000 Yuan/m2 in

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2010. Despite the housing bubble crisis in the U.S., Chinese housing market in inland west is still a

good opportunity for U.S. companies.

In the last few years, mobile business (M-Business) is gaining track in China. It is a good

opportunity for U.S., IT companies to invest in this sector as U.S. companies have a ton of

experience in mobile business field. China is also in need of reliable broad band internet access as

there is a growing demand for e-commerce.

China is short of fresh water supply. The country needs dams, artificial lakes, and water reservoirs to

satisfy the need for fresh water. U.S. firms can invest into utilities sector as there would be a huge

demand for fresh water.

Another profitable business opportunity is vending machines. China is very hot during summer and

southern parts of China have long summers. No toilet paper and sanitary products are available in

Chinese public restrooms. Vending machines dispensing water, soda, sanitary products etc. would be

profitable due to high demand.

Despite the huge population, China does not seem to have enough public restrooms as children

urinate in public. Portable restrooms which operate electronically for a small fee can make money to

their investors.

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Chinese households lack many appliances U.S. houses have (See Table 1 for comparison). Main

reasons for Chinese homes not having common U.S. household items are price and energy

requirement. U.S. companies can manufacture these items in China for a low cost; however, they

need to be energy efficient as electricity is relatively expensive for Chinese consumers.

Table 1: Availability of appliances in cities and rural areas (Premier Star Co.)Appliance City Home Rural HomeWashing Machine

Rare Rare

Dryer Rare RareMicrowave Increasingly Common RareOven Common CommonRefrigerator Increasingly Common RareFreezer Rare Virtually non-Existent

English language proficiency is low in China. However, many people are keen to learn more about

western cultures, as well as English. Language centers teaching English to Chinese people is a good

business opportunity; but, U.S. companies need to earn money through volume as many Chinese has

little money to spend on themselves. Unskilled labor is a problem in China. Technical schools (ITT

style) teaching Chinese laborers skills they need at their work would return profit as not only

Chinese would pay for their education for a better future, but also Chinese companies would pay for

their employees to gain technical knowledge as well.

Restaurant chains serving international foods are another option. However, this approach would

require substantial marketing effort as Chinese consumers are foreign to international tastes.

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Middle-class Chinese people have a growing desire to see the rest of the world. A travel website,

Expedia style, would make international trip planning and reservation easier for Chinese consumers.

Websites for online auctions, EBay style, or classifieds, Craigslist style, may also generate profit.

Chinese companies have a growing need for logistic operations. A reliable logistics and

transportation company like UPS or FedEx serving mainland China is a profitable business. In

conjunction with EBay or Amazon style online merchants, the logistic company would serve the

needs of Chinese consumers trying to reach hard to find items or items in substantial discount prices

around China.

XII. Conclusion

China is developing in a rapid pace. Some sections of this report may become outdated as little as

few years. U.S. companies intending to go into Chinese markets should carefully analyze the

industry they are going into. China is very regional and divided. Some brands are popular in one

place, very unpopular in other places. Thus, localization strategy is more beneficial for American

companies. Confucianism plays an important role in Chinese culture; therefore, American

companies need to know the culture of Chine for successful business ventures. Language barrier can

disturb business deals; so, knowing Chinese is very important in business. Chinese usually do not

have commanding English.

Chinese business people usually are not bind to written contracts as much as westerns. They believe

contract terms should change with changing conditions. American companies should be prepared for

modifications in contracts. You can always bring the issue to court, but this approach is not

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recommended as you may make the corresponding party to “lose face.” If you are the reason for

Chinese business people to lose face, they will never do business with you again- common examples

are Lehman Brothers and McDonalds in Beijing. It is better to renegotiate the terms for continuing

business.

You need to be able to drink “Bai Jiu2” and prepared to sign contracts at restaurants or karaoke

places- of course, after drinking Bai Jiu. You need to establish relationship “Guan Xi” and trust

before Chinese people sign a contract with you. China men usually do not want to negotiate business

terms with females; so, a company’s best bet is to send a male correspondence.

The most valuable lesson I learnt during my visit to China is people are essentially the same; they

just have different habits. Learning these differences enabled me to better communicate with a

culture which was completely foreign to me. I went from “they do it wrong” to “they do it

differently” to “there is a reason they do it differently.” This trip taught me that if people keep an

open mind and learn about each other’s difference, any problem is solvable.

2 “Bai Jiu” (pronounced “by-joe”) vodka like tasting liquor made from fermented rice.

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Works Cited

Barnett, Steven [et al.]. China’s Growth and Integration into the World Economy economy: prospects and

challenges/edited by Eswar Prasad. Occasional paper. Washington, D.C.: International Monetary

Fund, 2004.

Central Intelligence Agency. The World Fact Book. n.d. 01 09 2010

<https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html>.

Chan, James. Chinese Business Practices. 2009. 13 09 2010 <http://knol.google.com/k/chinese-business-

practices#>.

China Orbit. China Orbit. n.d. 04 09 2010 <http://www.chinaorbit.com/china-economy/china-wfoe.html>.

Dickinson, Steve. "Avoiding Mistakes in Chinese Joint Ventures." April 2008. The American Chamber of

Commerce China. 04 09 2010

<http://www.amcham-china.org.cn/amcham/upload/wysiwyg/CB2008No3-JV.pdf>.

Encylopedia Britannica. Travel & Geography: China. 2010. 13 09 2010

<http://www.britannica.com/EBchecked/topic/111803/China/71005/The-role-of-the-government>.

InterChina. n.d. 05 08 2010 <http://www.casaasia.es/pdf/7209103358AM1246523638483.pdf>.

Marketing-in-China. Marketing in China. 2010. 04 09 2010 <http://www.marketing-in-china.org/market-

entry-strategies-entry-modes.html>.

Premier Star Co. Culture in China. 1999. 04 09 2010 <http://www.chinaunique.com/educate/culture.htm>.

The Institute for the Analysis of Global Security. Fueling the dragon: China's race into the oil market. 2004.

08 09 2010 <http://www.iags.org/china.htm>.

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