1. A fragmented and differentiated market With the increasing attraction of multinationals to the size and growth of the Chinese consumer market, some tend to overlook the diversity of indigenous consumers. The common misconception that China is a huge market with homogenous consumers often leads to difficulties in assessing demand and formulating effective marketing strategies. In reality, China is a large geographic area made up of multiple fragmented markets; segmented by regional economic development and local culture. The Chinese also have diverse cultural patterns, demonstrated by deviations in dialects, ideals, lifestyles, traditions and customs. Therefore, these regional disparities affect the perception of foreign products and their willingness to purchase, presenting hidden barriers between different markets and making it difficult for multinationals to implement a national marketing and distribution strategy.2. Small consumer market? China offers the largest consumer market with 1.4 billion people, representing a fifth of the global market. However, this figure does not take into account the purchasing power of the Chinese population. Using a benchmark annual per capita income set at US$10,000 and adjusted for purchasing power parity (PPP), China's middle class shrinks to just 123 million, clustered in just 35 million households, mostly located along the east starboard side (REF!!SILKROADASSOC). While people in China's coastal areas and big cities are getting better and better, most people in rural areas still live hand-to-hand. The majority of upper-class Chinese choose to make their luxury purchases abroad. In recent studies, Bain found that more......a paper means......rather than an effective deterrent.China's two-track law enforcement system: the process administrative and judicial process. These violations are often exacerbated by the Chinese justice system. Rights holders continue to complain about China's civil justice system. Companies must undergo onerous legalization requirements in order to introduce evidence from outside China into legal proceedings. In some cases, decisions are made based on local protectionism and bias in favor of local businesses. In addition, concerns remain about the transparency of legal proceedings, including the non-publication of important decisions. The enforceability of court orders and judgments is also problematic.EDIT! Regulatory environment. REF quotes, diagrams, etc. Integrate government factors? Ask Fiona.