A Deakin University survey of 40 large, medium and small organisations which looked at the hurdles faced by Australian businesses looking to break into China found less than half had a business plan.

Academic Dr Jane Menzies said many businesses entered China on the back of opportunities presented by associates, contacts, clients and suppliers.

“The risk of this approach is that businesses, as the research found, fail to plan or prepare for their business ventures,” Menzies said.

A result of this approach, the survey found, was that businesses also did not have a good understanding of the bureaucratic environment they were entering.

“This bureaucracy can present significant barriers (and sometimes opportunities) for the businesses; they also influence entry modes that Australian businesses use,” Menzies said.

Australian government assistance vehicle Austrade was found to be helpful in setting up business in China and assistance from the Chinese government was also found to be important.

“Unsurprisingly, the participants found the level of intervention in their business from the Chinese government to be much higher than they were used to in Australia,” Menzies said.

“This led them to place a high value on relationships with government and understanding who the influential players are.”

Australian businesses surveyed were not confident about intellectual property issues they may face in China and took various measures, including holding back technology, to protect their IP.