Godfrey Firth has an article up on the website of the China Business Review, the useful bimonthly magazine of the US-China Business Council, listing 20 key questions companies should be asking their China country managers. A sampling:
3. If a sub-contractor to one of your company’s smaller suppliers is dumping untreated wastewater into Lake Tai, would your supply chain auditors, whether internal or third-party, detect this? If a Chinese media report appears detailing precisely this situation, what is your company’s immediate response?
9. Of all the tax incentives enjoyed by your company’s various entities in China, which are still valid or grandfathered for fiscal year 2008? For 2009? Are there any new incentives offered by municipal or provincial governments that you can take advantage of?
12. What kind of a China nexus does a planned global acquisition entail? Does the global turnover of all entities involved exceed ¥10 billion ($1.5 billion) or the China turnover of any two entities in the transaction exceed ¥400 million ($58.3 million)? If so, is your company prepared to disclose the information required to make the appropriate merger filing with the PRC Ministry of Commerce?
14. Does your company conduct robust background checks on management hires? What controls are in place to detect suspicious income growth among staff in sourcing, procurement, business development, marketing, and other departments with potential ethics risks?
20. What process have you used to ensure that your company rules and regulations conform to the requirement for employee consultation under the Labor Contract Law? Will the documentation of that process be sufficient during a potential labor dispute?
It’s a good list. The complete version is here.
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