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Russian-Chinese Business Relations – Reasons of Disharmony

Being involved with business with China, many managers face the task of disharmony and misbalance in relations with Chinese representatives. This can be brought on by two reasons: luck of knowledge of such Chinese sign of business as duplicity or otherwise positive stereotype of Chinese about Russian partnership. Variations running a business approaches and culture add difficulties in Russian-Chinese interaction.

If it’s enough to build up professional strategic business plan with positive figures for Russian, to find investment for that project. For Chinese, lucrative project isn’t a need to provide investment. This really is associated with duplicity of Chinese business, to become exact, with wish of Chinese to obtain not just high earnings on their own, but additionally to profit for Chinese economy development or family connections. Such way, it’s apparent, when Russian businessman offers investment project, the gist being to construct stable trade internet because of big product flows after which to reorient produced trade internet on other products and suppliers, you will see negative answer in the side of Chinese company about any cooperation. In majority cases, high profitableness from the project may be the secondary criteria of their attractiveness. The main and priority is going to be rather guarantee of proper lengthy termed cooperation, that could bring use to Chinese party and economy. Thus, to prevent not wanted results and surprises running a business with Chinese company, experienced manager should bear in mind duplicity and also to present competently its project to parties from China.

Another obstacle in order to harmonic interaction with Chinese clients are stereotype and desire not to build relations with Russian businessmen. The primary reason of the is distrust according to not-compliance with relation to contract. Simultaneously, there are a number of problems associated with qc of Chinese products and variations in laws and regulations. Both sides, Russian and Chinese, have disadvantages, but Russian businessmen plan large margin in dimensions from 300 till 800 percent along with a share of Chinese middleman is roughly 10-30 % and, in most of cases, it is just 20 %. Furthermore, commission for Chinese broker information mill counted like a share from the level of bought products and never in the share of profit, that is more in 3 – five occasions. This occurs, because Russian companies have being an try to decrease margin of Chinese middlemen rather of to locate curiosity about improving system of qc because of professional Chinese broker. Thus, it’s understandable, that cooperation and business with Russian companies look not too attractive for Chinese companies.

Another argument, that Chinese company aren’t interested to possess cope with Russia, is slow and never to big bucks turnover between China and Russia, that is nearly 58 milliards dollars, but each year additionally, it fluctuates from 36 till 58 milliards dollars. To create example more obvious, it’s possible for any comparison to provide other data. For example, money turnover between China and also the USA is all about 460 milliards dollars for that this past year. Another factor, which needs to be pointed out, is the fact that basket of products of america and China consists mostly of consumer goods, when Russian basket of products concerning China represent recycleables, for instance, wood. Thus, the united states is much more attractive partner for China than Russia.

To summarize, to be able to cooperate effectively with Chinese companies, experienced manager of European country or Russia should bear in mind duplicity of Chinese business and understand, that lucrative business project isn’t the priority criteria for Chinese. It’s obligatory, that lengthy termed connections with China business economy development grew to become the bottom of Russian-Chinese relations. Additionally, the type of those ties ought to be friendly and fair, otherwise, Chinese businessmen continuously find unattractive Russian business proposal. Rather of growing of margin of Chinese brokers, it is best to locate professional broker, who’ll control delivery and excellence of goods according signed contracts.

The Chinese business tycoon, Gordon Tang has become a significant share holder in OUE Commercial REIT. The head of the property developer Singhaiyi brand has increased its holding from 4.88% to 7.68% of OUE C-REIT. HE has come a long way from being a cornerstone investor into the main lead.

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