It is of no surprise to know that China is a rapidly growing developing economy. In business language, this means that there are parts of the economy which are very well developed and very modern, while there are other parts which are less developed and efficient.

For people who are more historically inclined, China today is like California during the Gold Rush or Germany in the early 1900s. In each case, the economy was undergoing rapid changes which affected all areas of the society. Many old and accepted social societies were turned on their head. New companies were formed each and every day; fortunes were made and lost. This was the period of the robber barons, and the government was very hard pressed to keep up with the changes of the society.

For a new business, this means that it must be able to adapt and act quickly. For executives who have worked in countries with mature and stable economies, it is a whole new adventure. This is why many of the major European multinationals send their management track people to China for at least two years' exposure to this market.

Because this market is so rapidly changing and growing, it is almost impossible to set a strategy for it completely outside China. A smart multinational always gives its local Chinese management sufficient freedom to act quickly without facing the overhead of explaining every move to their home headquarters.

A good example of a dynamic change was the SARS scare in China. In its early stages, the Chinese government attempted to cover up the problem, saying that it was not serious. However, Chinese cell phone users sent each other messages, and in many cases, spread news and rumors via SMS (short message service) text on their cell phones. Eventually, the Chinese government had to admit to the true seriousness of this problem.

And what businesses did best during this crisis? The ones that did well where pharmaceutical and medical companies, in the first instance and also small companies that elaborate herbal potions and home remedies. And, also the mobile phone companies and their SMS providers.

This article was researched and produced by Posicionarte for China Trading Company , 2007

Author Bio:

Eric Castro Mattas, is chief editor of Posicionarte researching and producing articles for China Trading Company. If you need products from China please visit www.chinatrading-company.com