China standard of living has been levered up exponentially over the years that it’s now the one of the top few economies in the world. Through the decades, the standard living of China has been rising and consumers are changing their needs and wants. The Chinese no longer seek for basic needs such as food and shelter According to Maslow’s hierarchy of needs, higher standard of living has fulfilled Biological and Physiological needs of the consumers thus the Chinese are moving up the level and demanding more compared to the past.

Hence, a lot of foreign investors in China are no longer just producing their goods in China. Most foreign companies are now marketing their products in China itself due to the large population demand. With a population of 1,313,973,713 (July 2006 est.), labor is not an issue in China. With a huge consumer base and increasing economy, many foreign investors are fighting for a piece of the China market. Furthermore, the China government is encouraging more foreign companies to enter in the China market and certain regulations and procedures have been are no longer as stringent as before. With the government support, China received a total of 622.4 billion U.S. dollars in foreign direct investment from 1979 to 2005.

However, entering the China market is not an easy task. The government procedures in China are not easy to understand. Full of complexities and paperwork, many foreign investors are always so confused when dealing with the authorities. The Chinese have their own style of working which may irritate foreigners who are not familiar with the procedures here. Any complications with the government can lead to long delays with any business opportunities. Therefore, the best way to prevent any complications with the Chinese government would be to engage a local party to help the foreign company with the administrative stuff. First of all, locals would not have any problems with any language barriers. Locals would be more familiar and comfortable dealing with the higher authorities. Furthermore, they would know the proper negotiation methods here in China.

The Chinese cherishes relationships among people. They believe that with good relationship comes trust which will lead to mutual success. Hence, the Chinese businessmen will ensure a strong and stable relationship with their business partners before carrying out any dealings with them. This way of doing business often causes conflicts among foreign investors and the locals. Foreign companies need to understand and familiarize themselves with the Chinese culture. If not, miscommunications can ruin any potential business deals and mess up the whole plan on China market entry.

Many stock market technical analysts will tell you that the Chinese stock market is a bubble and they will also tell you that it is ready to burst. Of course even a technical analyst does not have much to go by as there are very few charts which show similarities with 10% year-over-year growth. Nevertheless judging by technical charts of stock markets in other emerging nations the Chinese stock market looks like it is ready to crash.

Recently former Federal Reserve Chairman Greenspan stated that he believed the Chinese stock market was completely overbought and it was looking for a sharp fall. That very same day in defiance the Chinese stock market went roaring up. Some might say this would show how wrong Greenspan was, however we all know that at the very top of any stock market there is an rational frenzy of buying. If we look at all the major stock market crashes we see this same scenario. So where is the Chinese stock market today and is it really going to crash and when it dies many of us will say what took it so long? Is the Chinese stock market a good long-term play? It very well may be after the big crash. How far down it goes no one will know, but as it stands now it looks very toppy. As the traders, companies and even the Chinese government deny that the stock market is in trouble, technical analysts warn that the end is near and the crash is coming. The question now is how much will the stock market fall and what will be the date of its collapse?