Good and Bad Reasons to Relocate a Business to China

Zvi Sperling is one of the founding members of Maxim Lighting, a global leader in the manufacture of interior lighting. Along with his brother, Zvi Sperling started the company in 1970 and, following a long period of growth, moved a portion of its operations to China in 1990.

Moving a business overseas is a multifaceted decision for any company. There are a number of benefits as well as disadvantages to consider. One of the main reasons why companies decide to relocate to China is cost increases in their home country. That’s usually something that the Chinese labor market is good at solving.

Many companies also relocate in search of more forgiving environmental regulations. But this is no longer a good reason to move to china. Environmental regulations are becoming much tighter there, as China is adamantly trying to catch up to Western nations in this area.

Perhaps the best reason to relocate to China is the financial incentives China has 12 free-trade zones that offer excellent infrastructure and pro-business environments. It’s a great testing ground for new company programs.

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