Name Essays (1636 words) - Economy Of China, China, Economy

Name Instructor Course Date Insurance in China The international business that a company is doing can get some consequences that end up having some strong effects of the firm's success (Yu, et al). Choosing a bad country reduces the opportunities and increases the risks for a high financial loss and this can lead to loss of control on the foreign market. When conducting international business it is important to consider the cultural difference and other aspects that affect the business before entering the market. The differences can include language, political states, religion, culture and the demand types. It is easier for a company to enter the new market if the company can create partnerships in the new country just like the partnership in this case between liberty mutual in the United States and the spring airlines in China. Through doing this several obstacles are reduced and entry can be more successful (Yu, et al). Everywhere you look nowadays the booming story is that China has emerged as the world' second largest economy. The economy of China has emerged as the second largest having an economic growth of 10% in the last 30 years (Yu, et al). These numbers makes several countries salivate to tap into the economy of the growing market of China. Unlike any other place in the market, the business culture of Chinese is unlike any other country in the world and the foreign countries need to understand the practical challenges they have to face in order to succeed in this country.in this essay I will discuss the five biggest practical challenges for the foreign small and medium size medium enterprises in the China market and how to address this challenges. For almost a decade of assisting the foreign companies more so the small and the medium sized enterprises. Liberty mutual in the United States has come to understand the major problems that exist for these kind of companies when operating a nd growing their businesses. Red tape There are administrative and bureaucratic tasks in the west that have been simplified in the west that are still time consuming in China. The processes like the opening of a bank account, gaining the approval of a product and registration of a company can drug for even several months. China still lacks a strong rule of law and also has an inconsistent application of regulations, this means that the processes such as opening of a bank account and registering of a company are not designed for the convenience of a new company. The opening of bank account is an important process in China because it also plays an important role in the distribution of the insurance products and there are changes in the last couple of years represent some major threats and also major opportunities to the foreign insurers. The too many requirements needed in the entry level at the Chinese market also is a challenge. It is a regulatory requirement for any foreign insurer to be present in China for at lea st two years before they apply for the business license. No life insurer can also generate revenue before they are given the business license (Yu, et al). In the west several processes are handled electronically and in china, these processes needs reams of paperwork that needs to be filled and stamped by hand. The time that is required in completing these process is a bit lengthy. There are foreign companies that hire 1-2 full time staff in China with the hope that those hired will lead the sales and marketing efforts only to find out later that the employees spend more time in administrative tasks completion (Yu, et al). For a company to be successful in china, the company needs a full time administrative team in place that is responsible for handling the paperwork of the company. This kind of support will free up time for the sales team to focus on promoting the products of the company. This will be easy as they will not have to spend time getting approvals from the offices that are spread all over town. For success here the company should also find ways of reducing the current level of assets that are required