Top 5 Successful Business Tips For Expats In China
Published Friday December 02, 2016 (14:50:38)
China is becoming more important as a market for employers around the world and it's also growing in popularity for start-ups too.
However, regardless of business size here are some tips on how to succeed in one of the world's biggest markets.
Competition is fierce in business and it can be a challenge finding Chinese consumers but with some preparation and dedication, China offers impressive rewards for those who make the effort.
1. Find a local business partner
There are many reasons why a firm setting up in China should partner with a local business but the main one is the partner will know and understand the market and how to reach it.
There are growing numbers of start-ups, particularly in technology and finance, and there are organisations that help firms find a suitable partner so they can develop a business together.
A locally-based partner can also help a start-up or a business entering China avoid some of the pitfalls and help establish its business identity properly and also deal with local customs and laws.
Among the benefits of having a partner is that they will have a residential ID so they can access basic services, which will be needed to create an online marketplace, for instance. Expats may find that setting up an online shop with some of the leading Chinese portals will be very difficult and when negotiating there may be language issues as well.
However, for anyone starting a business in China there are some very important issues they need to be aware of early on and one of them is the importance of interpersonal connections since the Chinese still do a lot of business face-to-face which brings us neatly onto our second important business tip for starting a business in China.
2. Saving face
It's known as 'face culture' in China though the exact translation is to 'give face' and it's what is known in English as 'saving face'.
This can be a complicated area for an expat new to the country to understand. A person's reputation and their good standing is vital to a Chinese businessman or woman so if an expat makes even a mild criticism of them in public it would mean them losing face.
Should this happen the expat will, in all probability, lose their potential business client or partner.
This also works in the opposite way; Chinese clients will elect to work with the expat if they trust in them and believe they can deliver a good business opportunity. This is when politeness and respecting face culture really will deliver rewards.
This is why there's a lot of importance attached to networking and building business relationships which means they must be maintained and developed over a period of time. This means having regular events and business dinners and even offering small gifts (though the expat should be wary of offering a gift that appears to be illegal or is a bribe).
Whilst on the issue of developing relationships, it's also important that an expat starting a business in China understands the country’s culture and appreciates how business actually works there.
Not doing this may lead to small basic mistakes, such as not being polite at all times, and this may be costly since the client or partner may come to dislike and even distrust the expat. Having knowledge of basic Chinese customs will be a huge advantage for anyone setting up in business in China.
Also, understanding these Chinese customs and the importance of relationships will deliver a greater understanding of a client’s needs and help deliver greater rewards. It will also, and this should not be underestimated, reveal to clients and partners the expat’s ability to adapt to the local market and business demands.
Expats living and working in China should never embarrass, confront or create a conflict with a co-worker, which may mean them losing face. Indeed, the situation should be avoided at all costs.
The problem expats may face is that a Chinese co-worker or business partner will not refuse a request or disagree with what the expat says but they will express themselves subtly rather than engaging in direct confrontation. An expat needs to learn what the signals are and when they hear them and not press someone for an answer.
This will be seen as unprofessional and aggressive and will damage future business opportunities.
Oh, and remember to be punctual for all business meetings in China since being late is considered to be not only rude but disrespectful. The expat must make an effort in order to succeed.
3. Take time and be wary of copycats
Start-up businesses, in particular, need to be aware that the market moves quickly. While they are conducting research and testing their service or product, a competitor may launch a rival to it.
However, new businesses need to take the time to establish themselves and develop their ideas and products. Despite the size of the Chinese consumer market, they should not rush into delivering something without fully trialling it first.
The market is developing quickly and it's a straightforward step from creation to delivery of a product or service and finding distributors since the online marketplace is interconnected. Plus, there are lots of production opportunities.
Businesses and expats moving to China will appreciate fairly early on that competition is stiff and that competitors will bring out rival products very quickly so the expat’s business needs to deliver quality above all else.
Having said that, they do need to carefully monitor the marketplace for rival products, especially those that are simply copycats since this will create a legal issue that will need resolving – and this is where a local business partner should really come to the fore with their knowledge.
4. Learn the language
Along with the notion of saving face and developing a network of friends and business contacts, expats would do well to learn the language. It's easier than many people believe it will be.
So along with getting to grips with the local culture, learning the language will be of huge help for any business new to the country. By not doing so the expat will be depriving themselves of opportunities because they cannot communicate effectively.
Unlike most parts the world, including Southeast Asia, where English is the lingua franca, that's not the case in China, so unless the expat is willing to learn the language then they will need to hire a translator.
Learning the Chinese language and culture also brings another benefit for expats starting a business, which is why it's been listed as a separate tip. It effectively gives an insight into consumer behaviour and why the Chinese market operates in the way it does, which could prove vital for any business wanting to succeed in the country.
There's no doubt that expats who can speak the language create a good first impression with Chinese people and will be respected for making the effort, regardless of how well they can communicate in the new language.
5. Hire Chinese staff
For businesses new to China, teaming up with a local business partner is a sound first step but at some point, they will need to hire Chinese staff they can rely on and trust.
It appears the most common platform for expats recruiting Chinese people for jobs is LinkedIn. That's because there is a Chinese language version, which was launched in 2014 and attracts a very large number of Chinese professionals looking for opportunities.
Alongside this is Red Rabbit, a LinkedIn platform, which is aimed at attracting young professional Chinese workers. There are other social media platforms, many of which are Chinese creations and unheard of outside of the country but which are very popular, which will help find quality staff.
It's also possible to use the growing number of recruitment firms and expats should appreciate that most Chinese jobseekers tend to apply for a job by phone.
There’s also another potential tip that will prove helpful for business success in China and that is the expat should pay their taxes.
No one likes paying taxes, not even in their own country but when in China they need to pay their taxes on time. It doesn't help that the taxes and rules for them are continually changing.
Currently, there's a single 25% tax rate charged on the income of foreign and local companies though some business areas offer tax incentives to reduce this amount. For instance, many areas want to develop a high-tech sector are offering tax rates of just 15% to firms that meet the tech criteria.
Other cities, usually megacities such as Shanghai, also offer expats other enticements to create a new business or to simply move from one part of China to their area. For instance, in Shanghai expats in some business sectors are exempt from contributing to the country’s social security system.
Foreign employers also need to note that the rate of income tax varies in most areas and the rate also depends on the nationality of the employee.
With rules and tax rates changing on a regular basis, the foreign business really does need to keep up-to-date with these changes and so will probably find it easier to employ a local who understands them and can explain them effectively.
While these are important business tips for anyone looking to start a business in China, it should be reiterated that the need to learn the language and culture is very important, as is the need for subtlety.
Indeed, regardless of how busy the expat is they should still take time to learn the language every day, preferably on a one-to-one basis with a Chinese-born teacher. There are classes and schools available and some of these offer online lessons as well.
There are even mobile apps available so expats can learn simple expressions and words so they can communicate on a basic level.
It should also be emphasised that entertaining and the giving of gifts is also very important but expats should know that when they take a client or partner for dinner that they should not discuss business since the aim is to get to know each other better so they have a trusting and rewarding relationship.
Also, when an expat is taken to dinner by their client or partner, they should accept all of the dishes that are offered. Do not refuse any of them but if the expat decides they don't want to eat it (Chinese restaurants do offer a range of unusual and unsightly dishes), then they should simply leave it on their plate uneaten.
And while they shouldn't spend a lot on gifts, they are seen by Chinese people as a valued sign of respect so it's always worthwhile making the effort to deliver something the recipient would be pleased to receive.
Also, when networking the expat working in China will find that business cards are given, and more importantly, received with both hands. A small tip for expats is that their business cards should have one side printed in English and the details printed in Chinese on the reverse side.
New businesses should also note that when they employ a Chinese team that the poaching of key employees is rife as competition for quality employees is cutthroat and there will be a high turnover of staff.
These top five business tips for expats in China will not only help them become successful but also help them navigate the often confusing world of conducting business in the country but most of all, the tips will endear expats to the Chinese business people and employees they meet to ensure their stay in the country is not only rewarding but enjoyable too.
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Article content received from: Expat Focus,