Johan Bjorksten (pictured) is an entrepreneur who built a consulting business with over 100 employees in China. Anders Hagglund is a seasoned manager who set up high-growth and highly profitable operations in China for a major industrial multinational. Together, the two men wrote the book How to Manage a Successful Business in China (World Scientific Publishing, 2010), which aims to dispense advice to business people on actual experiences in different industries, including but not limited to those of the authors. Below are excerpts from the book:

• Understand the decision-making structure: Who is really calling the shots? This can be a fiendishly difficult question, and one that may come back to haunt you if it is not dealt with upfront. In a local state-owned enterprise, for example, the real power may lie with the Party secretary rather than the President or General Manager; if possible, you should also try to involve the relevant officials for the city or region in question. But the complex networks of informal guanxi of Chinese organizations can also introduce decision makers with influence way out of proportion to their formal titles. What is more, balances may change, sometimes rapidly, in the fast-moving Chinese environment.

• Make sure agreements are realistic: It is not uncommon for business partners to make promises that they cannot keep, whether because of lack of experience or simple wishful thinking; sometimes even because of pure desperation.

• Make sure agreements are enforceable: You may feel satisfied that you have ample contractual guarantees, even including penalties for breaches of agreement. But what if the partner simply has no money to pay? What if he has excellent guanxi with local utilities that can block production by cutting off energy or water? Local tax authorities? Banks? Courts? The written contract cannot necessarily provide protection - agreements in China must always be structured so that they make sense for both parties, and so that they punish both parties equally in the event of disagreement.

• Beware of relatives: In joint ventures, it is common for both parties to appoint not only Directors, but also to contribute senior management positions. It can be challenging to manage persons with strong connections, perhaps even family ties, to the joint-venture partner. This is a not a problem of the past - it keeps haunting business partnerships in China to this day.

• Try to buy the assets rather than the company: Chinese companies often have hidden liabilities and other legacy issues. These risks can be reduced by purchasing the totality of assets: not just production facilities, buildings, inventory, and so on, but even accounts receivables and existing personnel structure. This approach makes all explicit.

• Let the seller handle legacies: For example, companies can suffer from overstaffing and bureaucracy. The selling party will often be in better position to handle such issues than you are; it is therefore usually better to let him solve perceived problems as a precondition of you acquiring the company.

• Wait for the right opportunity: Business cycles are beginning to affect China in the same way as other countries. This means that there will be times, when a company is cheaper to buy.