Expatriation in China

Seminar paper from the year 2009 in the subject Business economics - Business Management, Corporate Governance, grade: 1.0, Helmut Schmidt University - University of the Federal Armed Forces Hamburg (Fakultät für Wirtschafts- und Sozialwissenschaften), course: Seminar Expatriation, language: English, abstract: With the present paper we tried to create a quite comprehensive picture of China, it¿s economy, education, law and culture and, based thereof, what challenge a German company that considers expatriating staff to China can possibly encounter.

Though entering the Chinese market with its great potential for future growth is understandably attractive for globally acting firms, setting up shop in the People¿s Republic needs to be considered carefully and planned thoroughly.

Besides many other difficulties, the question of how best to make use of German and local staff is vitally important. The success of operating in China will largely rise and fall with the ability of the German expatriates who are responsible for setting up operations in China. Therefore, choosing the right staff for expatriation, training, supervising and caring for it is of utmost importance.

Because of the vast cultural differences, China is probably one of the most demanding expatriation destinations there is. As we showed in our section about culture, China differs from Germany considerably in all but one of Hofstede¿s dimension, the most significant difference being the long-term orientation and collectivism. These cultural differences are of course reflected in the way the Chinese work, manage and negotiate. In order to be successful, the German expatriate not only needs to know about these differences, he or she has to adapt to them. As Posth states in his remarks and experiences in China, most foreign enterprises in China fail not because of too high costs or lack of competitiveness, but because cultural interaction problems and missing understanding of each other (Posth, 2006).

Based on the expatriation experiences of Bosch and Volkswagen, the paper gives general recommendations for firms which want to send expatriates to China.