Business in China will never be easy

China has always offered fortune or frustration to the outside world when it comes to trade.

The first British trade mission in 1792, sent to turn around a trade imbalance due to the UK's addiction to tea, set the tone for centuries to come.

After being ignored for months by the Emperor Qianlong and enduring much humiliation they were told that China was for the Chinese and no other nation was worthy of doing business there.

In the end Britain got its revenge by importing opium into China and getting millions addicted thereby addressing the trade imbalance.

When the Chinese tried to ban the drug, Britain replied with gunboat diplomacy and shattered China's belief in its military superiority.

To end the war, China handed over Hong Kong, opened up five ports on the coast for trade and paid Britain 27 million silver dollars.

China's closed doors were opened and since then have opened and closed depending on who is in charge at the time and their attitude to much mistrusted foreigners.

Fast forward 200 years and a lot less blood may be spilt in trading with China, but many companies have bled red ink as they grapple with the world's fastest growing market place.

When the Communist Party first came to power in 1949 it shunned the outside world and in turn was shunned.

The centre tried to hold control of the economy until Premier Deng Xiaoping began the process of opening up China to economic reform and moving towards a free market based system.

As it opened up to foreign investment and imports, many came to China believing they had a license to print money only to find it was not so simple.

While many have done well, others have fallen by the wayside.

Cultural and language barriers, an often impenetrable bureaucracy and China's legendary viciously brutal business environment all led many to fall by the wayside.

Various business models have all had degrees of success and failure.

Some have tried to export finished goods to China or set up business inside the country to sell to the growing consumer market.

Lion Breweries took a huge hit to its bottom line when it bought unprofitable breweries.

It thought it could turn them around and sell beer to the thirsty masses of China, but it got the recipe wrong.

American giant Dunkin' Donuts spent millions trying to bring its product to market only to shut up shop.

The problem was not that the Chinese didn't like donuts but they found the product too big, leading one wag to note "they could sell the hole, but not the donut".

Others have set up factories in China to sell elsewhere only to find that when they turned their back it was a case of just pouring money into a black hole and nothing coming out the other side.

NZPA spoke to several New Zealanders doing business in China and many had similar advice:

*Choose your local partners, go-betweens, staff and translators carefully. The Chinese notion of relationship is complex. Do it well and reap the reward, get it wrong and you are almost bound to fail.

*Have plenty of cash, suppliers in China do not give credit to newcomers but expect it from you.

*Be prepared for a frustrating time with Chinese banks, they are bureaucratic and inefficient.

*Make sure contracts are clear and the English version is compatible with the Chinese.

*Get a good lawyer, there is every chance you will need one.

-NZPA