The answer much depends on one factor only – how much low level labour you need. If its a lot, the the answer is ” Yes” – china is the place.
If the answer is no, then China makes no sense. Here is the reasons:
-. Chinese work force had been trained not to think – in. Startup you need thinkers – you won’t get too many of those in China – and if you do you will pay same as in the US
– opening up a Chinese company is hellish. Takes 6-8 months and its just about as much fun as having diarrhea for 8 months.
– once your company is opened, your stomach problems will continue with: monthly tax filling, arcane cash based Chinese tax system and let’s not forget the “currency control” of the China – where it only takes one special bank account, 2 special forms and a trip to a special branch to get some money into China.
To get money out – well, that’s kind of impossible unless you are willing to break a law or 10.
Rent in China is a problem : your joy and happiness if finding a great rate on office space will last about 12 months – or just about when you got all that wiring done. The landlord will noticed all this and to thank you for getting all settled in, bump your rent 10-30%, year on year. Till you move. And start the game again.
And there is much more of the “goodness” if doing business in China but I hope my earlier remarks give you a touch of flavor.
And so, if you do come, be sure to bring lots of Imodium – you will need it! :)