How to Effectively enter the China Market
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Welcome to ChinaInvest.biz Magazine - January 2011 Issue

ChinaInvest.biz Media is a division of Klako Group and will be providing monthly insight into investment, tax and operational issues for foreign companies entering and operating in China.

And welcome to the start of 2011. An exciting year filled with new opportunities and as usual new regulations and updates on behalf of the Chinese government which we aim to provide you in a brief and concise format.

ChinaInvest.biz – a division of Klako Group – has launched since 2010 its first publication in celebration of the group’s 30th anniversary. The magazine is now entering its second year and will be providing monthly insight into investment, tax and operational issues for foreign companies entering and operating in China.

In this issue we aim to provide new investors in China and/or Hong Kong with guidelines on what to consider when entering the China and/or Hong Kong market. Many foreign invested enterprises are unaware of the strategies and risks that could occur when coming to China and hence we have provided a concise format for everyone to understand. It is important that all companies are aware and understand what the policies, regulations and the simple way of doing business in China are.

We hope this can be a guide for everyone.

Labor Law is a relatively new phenomenon in China, with the first comprehensive law passed
in 1994. The new law, adopted by the National People’s Congress (NPC) on 29th June 2007,
looked to redress some of the poor working conditions found in China, particularly for the
average worker. Prior to the passage of this law, most Chinese employee’s in small-medium sized
firms lacked employment contracts. Morever, they were short-term, giving employers the flexibility to
frequently bring in a new, often cheaper hires whenever they saw fit.


How to Effectively enter the China Market

Foreign companies continue to have mixed experiences in China. Many have  been  extremely  profitable, while others have struggled and failed. To be a success in China, foreign investors must  thoroughly  investigate  the  market, take heed of product standards, prequalify potential business partners and draft contracts that assure payment and minimize understandings between the parties.

It is important to understand that while continued  reform  is  absolutely  essential for China to achieve the economic growth it  requires  and  to  fully  participate  in  the world trading community, in many areas, the necessary changes have not yet taken place. Companies must deal with the current environment in a realistic manner. Risk must be clearly evaluated. If a company determines that the risk is too great, it should seek other markets.


To read full article, please click here to view magazine (PDF file)


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All information in this report is verified to the best of our ability and is assumed to be correct at time of release; however, Klako Group does not accept responsibility for any losses arising from reliance on the information provided within.


Interview with Ahmet Uysal, the President of Power Square Holdings Limited


We are involved in Mineral trading (mainly boron – a mineral used in Glass, Ceramics, composite materials) through  our  companies:  Power  Square  Holdings  Limited  of  Hong  Kong,  Tekpa  Inc.  of  Turkey,  and  Qingdao Phoenix Resources of China .  We serve our customers in two ways: act as their agent or direct sales.  Tekpa Inc.  serves  as  the  procurement  agent  of  some  of  the  largest  Chinese  consumers  of  Boron  in  Turkey  at  Eti Maden, which is a world monopoly as Turkey has in excess of 72% of the known world boron reserves.  Power Square handles our direct sales which are under annual contracts.  Recently, we formed a company in Qingdao (Phoenix Resources) to handle our spot sales for customers in mainland China.

When we started this business in 2002, the total exports to China was less than 5000 mt annually.  After  we signed the first contract with the largest consumer of Boron in China, which produced borosilicate glass tubes and rods, the market rapidly expanded and now is in the vicinity of 450,000 mt. annually.  According to 2011 contracts, we channel almost 25% of the total quantity to China.


To read full interview, please click here to view magazine (PDF file)