Located in Eastern Asia, and precisely on the western shore of the Pacific Ocean, China has become one of the top investment destinations. Today, almost big manufacturing multinationals, from electronics dealers to auto parts enterprises, are likely to have some presence in China.
So, if you are looking forward to registering a business in China or have just started it, we will tell you the five most important things that you need to know.
Understand the Role of State in the Economy
Unlike other jurisdictions in the globe, the Chinese administration plays a dominant role in the state of the country’s economy. Although the country has undergone thorough liberalization since 1970s, the areas you can invest in are still restricted. So, as you set the business scope, it is prudent to find out if there are restrictions in the targeted area.
In 2015, the Chinese administration released a guideline referred to as the new Foreign Investment Industries Guidance Catalog that classifies the investments into four groups: encouraged, permitted, restricted, and prohibited. The Chinese administration recommends that entrepreneurs should largely focus on the encouraged industries, which include:
- Construction and operation of grids
- International marine transportation services
- Accounting and auditing
- Aged care institutions
- Operation of performance sites
- Air transportation
Relationship is Very Important to Business Success
While it is prudent to develop good relationships wherever you do business, you will find it more important when working in China. However, the idea of building relationships for business in China works differently. Unlike in the west, where you can meet new people anywhere, including at dinner and seminars, and develop good relationships, Chinese put a lot of weight on introductions.
The best way to build relationships is developing good networking skills where you nurture every lead and use him/her to anchor business growth. For example, if you are selling products, you should try to make every client part of your network. Also, try to recruit employees with good connections to build a strong brand.
Understand the Chinese Consumer Psychology
As you join the Chinese market, it is important to know that most Chinese consumers evaluate products differently compared to westerners. In China, customers are strongly attached to brand and quality. So strong is the focus on brand that at times even quality takes a back seat. As a new business, you should strongly focus on building a strong brand and the profits will no doubt follow. Here are other aspects of consumer psychology that you need to know:
- Chinese are very positive and want to be associated with brands that help to reinforce the notion of success
- Most Chinese are less materialistic, and you should focus on delivering value with the products from your company
- Word of mouth is so powerful in China. Therefore, use every available opportunity to impress clients who come to your store and transform them into leads
Take Advantage of Experts
Today, there is no doubt that China is overflowing with business potential, but the success you can achieve is dependent on the strategies you adopt. Particularly, you should put a lot of weight into building relationships, branding, and adhering to Chinese laws. To ensure that your operations run smoothly, it is advisable to ensure you bring on board experts for help. Reach us to talk to our experts and learn how we can help your business become successful.