Adapting to China’s business environment and understanding relocation criteria and strategy implementation

Is your business in China affected by the business environment changes? Are you struggling to adapt to these changes? Adaptation can actually be achieved through relocation! This study identifies the relocation criteria to consider and the relocation strategy implementation steps.

China has been playing a major role in the global supply chains due to various factors such as cheap labor cost and sufficient resources availability. The country underwent different phases to become more globalized and attract foreign investments. However, a shift has been noticed in China’s business environment in recent years, which led companies to look for ways to sustain their business and adapt to the changes. One way of adaptation can be through relocation, which can be a solution for maintaining and attracting new business opportunities. Therefore, the purpose of this research is to provide an overall understanding of China’s business environment and to investigate relocation decision-making in China. In other words, to identify what are the relocation criteria to consider when relocating supply chain hubs and how to implement a relocation strategy in China. The authors identified 14 relocation criteria and relocation steps framework from the collected data in China, which can be seen in the pictures attached below.

What can be highlighted is that when entering or relocating within China, companies should pay attention to their specific objectives and to their industry location, in order to stay closer to the industry and the favorable market. Also, China is transforming its business environment towards a more innovative and green industry, which is why businesses are expected to integrate sustainability in their supply chain operations. This thesis study serves as a guide for business managers to understand what factors nowadays influence a resilient and competitive supply chain in China.