How to achieve success in China? We prepared the short guide for everyone, who wishes to enter this promising market. If you want to start your business operations in China, you should remember about following 10 things:
1. Make market research
Chinese people have their own ways of doing business and the whole market is unique, you need to devote some time in order to grasp the basic knowledge about it. It is better than reconnaissance by fire, no big risks are involved. Another good way is visiting trade fairs in China: you can present your products there, find out whether is there a demand for them, trade fair is a great opportunity to start some business relationships. You can also download online reports about your branch of industry – in many cases it is free of charge, you will save a lot of time.
2. Obtain some knowledge about Chinese culture
China has its own unique culture of business, and those who know how to deal with the Chinese have better starting position and more chances for successful agreements. Read some books or take short courses. Be aware that with the basic knowledge about Chinese business etiquette there may be still some things that may surprise you, but remain cold-minded, use your common sense and treat your partners with respect.
3. Choose the type of business presence in China
After market research, you will be able to find out what is the most reasonable type of business presence in China for you. There are several ways, in which the foreign company can be present in China: Joint-venture Companies, Wholly Owned Foreign Enterprises (WOFE), Foreign Invested Commercial Enterprise (FICE), Representative Office (RO). We have already described the advantages and disadvantages of every type.
5. Choose the bank
If you open your company branch in China, you need to open a bank account.
There are four big banks in China, they are generally reliable and well-known. It is better to open your account there than to make use of services of another, small bank. The big four are: Bank of China, China Construction Bank, Industrial and Commercial Bank of China, Agricultural Bank of China.
5. Choose the proper localization
China is a vast country with big surface. If we want to start an IT company, the best choice would be Beijing, a safe haven for dot-com companies. If we want to outsource production to China, than you should find out where is the best resource base. Every province of China may have different laws and regulations, so it will be the best idea to make reasonable decision, moving your company from one province to another would be a big waste of money.
6. Employ good workers
Your company may need Chinese workers to function properly.
The whole process of recruiting Chinese staff may take some time, so it is better to use the services of an entrusted recruiting company, which has experience in searching for suitable workers in particular province. Remember, that you have to pay taxes for every employed worker. It is the best option to start from recruiting managers; they will find the rest of workers.
7. Register your trademarks
Many foreign investors forget about this or have no knowledge of Chinese law, which – in this case – uses the rule “first come first served”. We have already written about consequences of not registering your trademarks, the lack of proper registration may have dire consequences for your business.
8. Find a good partner
It is a good option to find a reliable partner in China, who has experience in running companies there. Our partner may be a consulting company or a chamber of commerce, it should have good reputation and experience in our field.
9. Develop a long-term strategy
Doing business in China requires long-term strategy, so everything should be considered before: how to set up a distribution grid, how to enhance production, how to manage human resources. It is important to base our plan upon up-to-date statistics and meticulous research.
10. Don’t hurry
It takes time to do business in China, if you want to get rich within a year, better choose another destination. You need to devote a lot of time for registering your company, fulfilling all of the requirements, and most importantly – for building your personal business relationships. We need to be patient in everything, but it will certainly pay off: one billion of customers are awaiting you!