China is a US$10trn market that’s growing at a staggering 7% a year. Looking to do business there? It’s a lot less daunting than you might think.
MYTH No. 1: Language is too much of a barrier
There’s a new generation of Chinese who’ve studied abroad and have an excellent grasp of English. While they may not be up on the latest buzzwords or use complex western business jargon, you might find it a refreshing change to conduct meetings in plain simple English with your Chinese colleagues.
MYTH No. 2: It's an unsophisticated market
If you thought there was a lack of disposable income in the Chinese market, think again. In fact, it’s estimated that 76% of China’s population will be considered middle class by 2022. That’s a hefty chunk of potential new customers.
MYTH No. 3: They are resistant to doing business with westerners
The Chinese have no problem with western business people. But they certainly have a problem with western business traits like brashness, impatience and rudeness. If you’re willing to take the time to forge strong, mutually respectful relationships, you can reap massive, long-term rewards here.
MYTH No. 4: You just can't get the people
China has one of the biggest, most well-funded education systems in the world. So if you’re looking to expand here, you’ll have access to lots of bright, skilled people across a wide range of disciplines. If you’ve got the jobs, they’ve got the workforce.
MYTH No. 5: You've got to be big to succeed
China isn’t just another outpost for huge multinationals looking to expand their reach. Manufacturing costs can be up to 80% cheaper in China which means it’s a great place for smaller businesses to make strategic partnerships. It could provide just the leg-up your business needs.
MYTH No. 6: It's a closed shop
Couldn’t be further from the truth. China is actively looking to open up its market to foreign investors. In fact, the Chinese government has created 11 free trade zones in major cities for that very purpose.
MYTH No. 7: It's hard to get around
Yes, it is unquestionably huge – the 3rd largest country in the world by total land mass. But China has made every effort to shrink the time it takes to criss-cross the country. Significant investment in the road network has led to the creation of the longest highway system in the world. Nearly all the provinces and regions are connected by the world’s 3rd longest rail network and the fast trains are very, very fast. And by 2020, it plans to have 240 airports.
MYTH No. 8: Apart from Beijing and Shanghai, forget it
China’s rapid urbanization has led to the explosive growth of major cities through the country. What’s more, many of these cities have developed their own specialized industries – for instance, Huainan is big on equipment manufacturing, Guiyang is becoming the home of big data and Hengyang is a hub for electronics. This means that foreign businesses can now target the location of their Chinese investments more precisely than ever.
MYTH No. 9: They're imitators not innovators
While the Chinese have acquired a reputation for being western copycats in the tech sector, that perception is shifting rapidly. With increased government support and strong GDP growth, Chinese companies are increasingly leading the way and giving Silicon Valley a run for its money. Right now, it’s a country that’s never been more willing to embrace new ideas.
In a nutshell:
Over the last decade, China has probably changed more dramatically than any other country in the world. However, if you can set aside your preconceptions and approach the Chinese market with an open mind, the opportunities are immense.
