The China market is
increasing over the years and many foreign companies are considering
about entering into China.
However, many have heard about the downside of failed China market entry and
are worried about the complications of the China market. But as long foreign
investors learn and understand more about the Chinese business culture and
the local competitors, they would be able to develop a strategy to counter
problems that they might face when entering the China market.
For a successful
partnership, both parties need to go the extra mile to learn more about each
other culturally and their business styles.
The Chinese are not
difficult to work with. As long as we are familiar with the way they work
and their style of negotiation, overseas companies can collaborate with
local organizations and expand their enterprise into the China market. Since
the China market consists of mainly local organizations, overseas companies
would need to have contacts among the locals to enter into the China market.
We have collated a few
suggestions on how overseas companies can work effectively with the locals
in China.
1. Chinese Business Culture
Many foreign investors find
it very frustrating to work with the Chinese because firstly they do not
understand the Chinese language and culture, and secondly they feel that the
Chinese have a different sense of business style. Language barriers cause
conflicts and miscommunications among the parties. Thus, for foreign
investors to successfully enter into China market, they would need to be
able to communicate and negotiate with the locals.
The people in China have a
strong national and culture pride thus it is of no surprise that the Chinese
tend to carry out their business according to their beliefs and values. For
example, the Chinese places a high importance on respect in society. Hence,
at the workplace, the Chinese have a high respect for their superiors and
their co-workers. Thus, foreign investors would need
to recognize that that they
need to be respectful when talking to the Chinese during business meetings.
If the Chinese feel that the foreigners are unknowingly disrespectful, the
foreign company may not be able to strike a deal with the locals.
Furthermore, the foreign
companies need to understand how the Chinese carry out their business here.
As China is only an emerging market, not many companies understand the
Chinese business culture. In China, the locals are very concerned about
building up good relationships with their partners and clients. Therefore,
the Chinese will put in a lot of effort and time to socialize with their
clients before settling on a deal. Even though the business deal might not
be successful, the Chinese
would still want to keep that relationship strong for future benefits.
2. “Guanxi”
Maintaining good
relationships in China would help foreign companies in the China market.
The Chinese feel that one
needs to be constantly networking in China. In China, establishing
relationships with others is referred to as having “Guanxi” with people.
Guanxi (relationship) is
an important element in
achieving successful business in China. With a good relationship with
others, a company would benefit in many different ways. First, a trust
between the different parties would have long been established thus the
parties would be very comfortable working
with each other. Next, if a
company would to encounter any problems in any field, knowing someone who is
an expert in that field would help explain matters and may even help to
resolve any problems.
3. Establish
close relations with government officials
Because the China
government plays an important role in influencing market movement and
administering foreign investments, a strong government relationship remains
an important factor to do business successfully
in China. Fewer hiccups may be met during paperwork applications or
achieving local authorization if a strong relationship with government
officials is in place.
4. Local
competition
Foreign investors also need
to find out what their local competitions are. However, one must not
overlook small local companies in the China market as the Chinese have a
very strong national pride thus they tend to be more supportive towards
their local rather than foreign products. Hence, foreign companies
would really need to do a detailed market and consumer research if they want
to not only enter the China market but also market their products to the
local market.
Foreign investors can seek
for outside help when trying to enter into the China market. The above are
just some of the problems or information of the China market. However, there
are many more which most of the foreign investors are unable to handle on
their own. Approaching someone who is familiar with the China market and the
Chinese culture would help tremendously as they would know the tactic on how
to handle any problems.
