Manufacturing Business Operations in Beijing China Business Plan

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Beijing

The population of Beijing is somewhat homogenous in that the people are almost entirely Han Chinese, but the city does act as a magnet for Chinese from around the country. There can be significant cultural and even linguistic differences between Chinese from different parts of the country. While the city is 96% Han, there are significant minorities of Manchu, Hui and Mongol (Beijing Welcome, 2012), in addition a foreigner population for which estimates vary significantly but is well over 100,000 (Sina.com, 2010). The primary language spoken in Mandarin. All Chinese are taught the Beijing dialect (Putonghua) in school, so even migrants from other parts of the country should be functional in Mandarin. Most long-term foreigners in Beijing also speak Mandarin.

In addition to being the political and cultural capital of China, Beijing is one of its most important economic cities. The city's economy is rapidly growing, and 71.3% of the city's GDP comes from tertiary (service) industries. The financial industry is one of the largest sectors, along with real estate, automobile production and sales, pharmaceuticals, IT, and outside the city there are some heavy industries as well (Beijing Travels.com, 2012).

Most businesses in Beijing are small and retail in nature. Among the larger firms, there is a split between public and government businesses. Even those businesses that trade on the stock exchange are often subject to strong regulation from the government, so private industry does not have the same freedom to practice its business as a Western company would have.

In general, workers' rights in China are poor. There are trade unions, but the government plays a strong role in the activities of the unions and in ensuring that conflict between union and business is minimal.

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For example, the government and one of the largest unions issued a new plan together to collect more funds from enterprise to go to a worker's reserve fund (Walsh & Lin, 2012). With weak enforcement of labor codes, there are no set rules with respect to hours or pay. A China Daily report showed that average pay outside of the private sector was •37,147 in 2010, which equates to $5,887 at current exchange rates (People's Daily, 2011). Workers in Beijing often make considerably more. The method of payment would be either in cash or to a bank account, not much different than back home. The method of pay would be different for a U.S. employees assigned to China. Such an employee would likely need to take pay at a U.S. bank and then withdraw it. A stipend could also be paid by the local Chinese operation so that the employee has some local money to cover living expenses.

The pace of technological change is rapid in China. In general, Beijing is one of the more developed cities in China, and China is closing the gap on the West quickly. That said, there still remains a gap between what Chinese companies are capable of and what Western companies are capable of. Beijing, as noted, is becoming something of an IT hub, and….....

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