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54.
Problems involved in marketing and
product pricing
Even where domestic sales are allowed, marketing
is still a big problem in China. The commercial network
is very complicated,' involving multiple levels of marketing. Some foreign investors complain that the Chinese partners are often not well informed or are
secretive about vital information on distribution and
marketing channels. More important still, joint ventures do not possess much autonomy in pricing their products. The State Bureau of Commodity Prices has the final say.
55.
Difference in management styles
The management style of a Chinese enterprise differs markedly from that of a western firm. In settling disputes, the Chinese often stress the principle of consensus. Consultation is usually adopted,
notwithstanding the fact that it is a time-consuming
process. The reluctance to put matters to vote has led to uncertainties over the degree of control that can be exercised by each partner, because effective influence on crucial matters is not necessarily directly proportional to the respective capital contributions.
56.
(c)
Institutional problems
(i) Bureaucratic controls
Foreign investors often complain that there is too much "red-tape" in China. Simple matters such as obtaining a supply of electricity and plumbing may involve
7 to 8 bureaux. Sometimes, the situation is made even
worse because communication between the various government bureaux is poor.
CONFIDENTIAL #3
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