How to achieve success in China? We prepared a short guide for everyone who wishes to enter this promising market. If you want to start your business operations in China, you should remember the following 10 things.
10 steps for your success in China
1. Do market research
Chinese people have their ways of doing business. Every province is unique, so you need to devote some time to grasp the basic knowledge. Another good way is visiting trade fairs in China: you can present your products there and find out whether there is a demand for them. Trade fairs are a great opportunity to establish some business relationships. You can also download online reports about your branch of industry. In many cases, it is free of charge, and you will save a lot of time.
2. Explore Chinese business culture
China has its unique business culture, and those who know how to deal with the Chinese have better starting positions and more chances for successful agreements. Read some books or take short courses. Be aware that with the basic knowledge of Chinese business etiquette, there may still be some things that may surprise you, but if in doubt, use your common sense and treat your partners with respect.
3. Choose the type of business presence in China
After market research, you can choose the most suitable type of business presence in China. 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 Enterprises (FICE), and Representative Offices (RO). Read about the advantages and disadvantages of every type.
4. Choose your bank
If you open your company branch in China, you must open a bank account.
There are four big banks in China: the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, and the Agricultural Bank of China. They are generally reliable and well-known. Opening your account there is better than using a small-player service.
5. Choose the proper localization
China is a vast country. If we want to start an IT company, the best choice would be Beijing, a haven for dot-com companies. If you want to outsource production to China, find the best manufacturing base. Every province of China may have different laws and regulations, so it will be the best idea to make a reasonable decision since moving your company from one province to another would be a big waste of money and time.
6. Recruit competent staff
Your company may need Chinese employees to function correctly. The process of recruiting Chinese staff may take some time, so it is better to use the services of a trustworthy recruiting company that has experience searching for suitable workers in a particular province. Remember that you have to pay taxes for every employed worker. Consider outsourcing the job to recruiting managers since not every business vehicle in China can recruit.
7. Register your trademarks
Many foreign investors forget about trademark registration or have no knowledge of Chinese law, which – in this case – uses the rule “first to file.” There are many consequences of not registering your trademarks, so make sure to do it.
8. Find a good partner
Finding a reliable partner in China who has experience in running companies is recommended. The partner may be a consulting company or a chamber of commerce. It should have a good reputation and experience in our field.
9. Develop a long-term strategy
Doing business in China requires a long-term plan, so everything should be considered before: setting up a distribution model, enhancing production, and managing human resources. It is important to base our strategy on up-to-date statistics and meticulous research.
10. Don’t hurry
It takes time to do business in China. Choose another target market if you want to get rich within a year. Spend enough time registering your company, fulfilling all requirements, and, most importantly – building your business relationships. You need to be patient, but it will undoubtedly pay off: over one billion customers are awaiting you!