This article is an extract from Pathfinder Business magazine.

Looking across the Huangpu River to the towering skyline of Pudong, you witness China’s economic miracle. The country’s annual growth is around 10 per cent, and foreign investment still rising.

The transformation from a mainly agricultural to an urban society carries on apace, as does that to a market economy from one ruled by the politburo. The middle class is now thought to number 300m. The industrial sector is being remodelled and the world’s greatest infrastructure projects are underway or planned.

There’s huge potential for companies that understand the business culture. A few foreign companies have been in China since the 1980s but it was accession to the World Trading Organisation (WTO) in 2001 that attracted a rush of inward investment. Opportunities have opened up in insurance, banking, retail, services and producing goods for UK business.

Ask Dr Jeffrey Malaihollo, managing director of Central China Goldfields, a British mining company in Sichuan. ‘If a company has the ability to be nimble, has entrepreneurial flair, extensive contacts and cultural awareness then China represents a huge opportunity,’ he says. ‘We decided to focus on China because we think there are many world-class deposits to be discovered there. Because of its economic growth China consumes most of the world’s resources, so there is a readily available market domestically.’

From next year, visitors arriving by air will disembark at one of Asia’s largest terminals, created by Sir Norman Foster with UK’s ARUP heavily involved in the engineering design. It’s a statement about where China now is on the global business map. To the southeast, the major Olympics sites are on time for completion, again with ARUP playing a big part.

With the expected inrush of visitors, hotel construction is booming. The Olympics have already brought enormous benefit. By 2010 a network of 13 metro lines will ease congestion in a city where hundreds of new cars are registered daily.

Beijing is expected to grow way beyond the Olympics. It is emerging as a centre for international business — brand names such as Motorola and Hewlett Packard have offices there. It is also a major tourist destination with leading hotel chains offering a wide choice.

Despite all that Beijing has to offer, Shanghai is the preferred location for some foreign companies. It is the main financial centre, although Beijing and Shenzhen also attract financial services.

Douglas Barrett, British Expertise’s director for Asia Pacific, says that failing to observe the difference in business culture is one of the most common mistakes that British companies make when first entering the Chinese market.

‘Business ethics are very different to British or European business ethics,’ he says. ‘But most British people are far too trusting and when they go to China they don’t do due diligence. The other thing is intellectual property rights being ripped off. It could even be your partner doing it. The laws about copyright are not that different in China, but the enforcement is different.’

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