This paper attempts to analyze some of the ways in which social, cultural, economic, legal and political differences among nations, specifically China, affect international business. China has a totalitarian style government which is somewhat resistant to change, and very conservative. It is extremely concerned with the way the rest of the world perceives it, yet strives to keep continuity with it's past.
Social factors play a large role in how China does business both on a national and global level. In Chinese society, business is fundamentally a matter of building relationships. They believe that communication, respect, and group harmony are all important key factors in a business structure. While western businesses may consider communication just a way of passing along information; the communication comes to an end when the deal is concluded, a Chinese business finds communication an absolute necessity for creating and maintaining business relationships. .
Culturally, China is a very family oriented society where individualism and independence were suppressed for a long period of its history. This contributed to their lack of experience in dealing with the outside world, and their propensity to perceive business as more of a personal issue than most western societies. In China, it is more who you know than what you know. Networking is the most important step to getting business done; you have to have the right connections. This makes it difficult sometimes for other international companies to do business in Chinese society.
Although China has experienced a large amount of economic growth within the last decade, it has a multitude of challenges brought on by that growth to address. In a population of 1.2 billion people, 200 million of those people live in a state of poverty. Unfortunately, China lacks a social security system to help it deal with the unemployed and individuals temporarily laid-off from their jobs.