|
If you plan to start a manufacturing operation in China, you are not just operating a factory – you are managing a new company with all the legal, regulatory, financial and administrative requirements of a stand-alone corporation.
Assuming that your Western manufacturing and management paradigms will transfer seamlessly to your China operation is a risky path. Western management approaches must be refined and adjusted for the unique nature of the China industrial marketplace; China Centric has led the start-up of over 15 integrated manufacturing operations throughout China and our executive team has managed more manufacturing plants in China.
Many aspects of operating a company in China are different than in the West:
- Business formation is a different process with a defined and limiting scope of business that needs to be carefully formulated and “negotiated” including careful determination of regulatory capital requirements – Total Investment (TI) and Registered Capital (RC)
- Financing and capitalizing a company in China is very different and counter-intuitive to most Western businessmen, requiring careful and comprehensive financial modeling and financial structure planning
- VAT, Tax and many regulatory requirements must be considered
- Employment laws and practices, tax laws and a wide range of different regulatory requirements must be carefully integrated into an effective plan and execution
- Staffing and cultural considerations drive different organizational structures and staffing needs for most businesses
- The cost relationships of labor, capital and material are different than in the West making your “tried and true” cost structure paradigms invalid in China
- Cost structures must be recreated around China structures
- Manufacturing processes can often be re-optimized around these new cost relationships, driving different process structures than employed in the West e.g. substitute low cost China labor content for high cost automation in the West where labor costs are much higher
- Finding the best location requires a careful analysis of market, supply chain, infrastructure, development zone criteria, cost and facility issues that are often not obvious or comparable to Western practices;
- Installing the full range of business policies, functional and operating procedures, internal controls is a complex balance of Company requirements and local regulatory requirements, common business practices and cultural issues;
- Many other differences must be navigated for a successful manufacturing operation to be sustained in China
We have field-tested experience starting and managing all aspects of manufacturing and corporate administrative functions.
China Centric focuses this experience on Client needs in five types of projects:
- WOFE/JV Start-up
- Hosted Manufacturing
- Licensing
- Turn-Key Contract Manufacturing
- Custom Manufacturing Projects
|
