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Doing Business in China
How to do Business in China
China remains an untapped market with great growth potential for companies seeking to do business in there. Be aware that the Chinese community is weary of companies entering the country because they believe that most companies are there to make a fast dollar. However, if a western company follows a few simple rules and adheres to some cultural outlines, success in Chinacan be achieved.
Building relationships are crucial in China. Also known as guanxi. It would be helpful to build a few relationships with companies prior to even suggesting that you want to operate in China. A person known to both parties should arrange introductions to a Chinese company. Chinese business people are unlikely to meet with strangers. Westerners will find that production, distribution, and advertising of a product or solution flows easiest once crucial relationships have been built. A large amount of business is conducted at after hour’s entertainment gatherings. Do not hesitate to bring small gifts as mementos of your visit. Learn the language. Although the country has many dialects, Mandarin is the official language of China. Lastly, do not be rigid in your ways. Deals are often delayed in China. Learn to be flexible.
The first rule of a business meeting in China is to be punctual. If a meeting is set for 8am, then be there at or before 8am. It is customary for the senior member of a group to enter a meeting room first. This member also guides discussion during the meeting.
Never underestimate the power of the Chinese government in business. Remember, the communist party is still the biggest company is China. Remember that a network of business executives in China extends not only throughout the corporate world, but also throughout the government bureaucracy. Many Hong Kong entrepreneurs will freely admit that it’s important to grease the wheels of government bureaucracy with well-placed gifts and personal relationships with those in power. Proceed with extreme caution when it comes to gifts. Do not be apparent about it, but simply keep it low-key. The Chinese generally view gift giving not as bribery, but simply as the reciprocitation of favors given and politeness.
Advantages of doing business in China:
Land, labor supply, natural resources, and management are readily available. Low-cost land and labor are just a few advantages of doing business in China. China is not one market, but seven different markets for you to tap into.