Chinese Business: Adventure Or Nightmare?
When you are starting a new business there are very many things you have to be aware of and put in place and if you are starting a business in a part of the world that is so very different from you are your native country like China, you will find that there is a lot of things you will have to take in to consideration if you want to have a success.
There are many factors when you are entering the Chinese market and you are often in need of someone that knows the market, the culture and the customs as well as the ins and outs of the market both financially and the bureaucratic red tape in a country so far away from anything you are used to. It is both in marketing, in the way to talk to government officials, he way to present your product to the market and the way you do marketing.
China needs foreigners
Despite the declining market in all of western Europe, the Chinese market and economy has managed to grow at an alarming rate, it has grown so much that it is attracting investors and has surpassed the American economy as the biggest in the world.
As foreign companies are entering the huge Chinese market and Chinese companies are entering markets all over the world, qualified experts that know the companies and the products that are entering the Chinese market and also qualified workers that know the many markets the Chinese companies are trying to enter.
Even though China is a uniformed country there are huge differences depending on where you are in the country you will find many differences, you always have to remember that there is a huge difference all depending where you are and if you are in major cities or in more rural areas.
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More than 1,7 million currently work in china and more are entering China to aid in expanding both foreign companies in China and Chinese Companies.
Chinese companies hiring foreigners
Right now many companies are looking for qualified works in engineering, sales, marketing, language, teaching, high level CEO and marketing. Teaching jobs to make sure that languages are being taught and reassuring the next generation is well rounded in the languages needed to enter foreign markets.
The companies that are looking for foreign workers are major companies looking to enter foreign markets in the next few years or some that are looking for people with special skills in a certain area, some companies that have many foreign workers are often looking for a foreign CEO, because it will be so much easier to incorporate the many foreign workers to a CEO that knows the customs from the many foreign workers.
Starting a business in China
When you are starting a business in China you have many things you have to be aware of, not only the many cultural differences, but also the red tape that exists everywhere.
Since China entered the WHO in 2001 regulation in China has become more uniform and more and more regulations are restricting and making it more and more difficult to start a business.
When entering a market, it is important to know the culture you are entering, the Chinese culture is different from any other market and it also differs from area to area.
The best way to start is to know your target group, start small and build larger, you cannot enter the market like you would do in Europe, you start small and then you keep growing slowly.
Make sure you from the beginning follow all rules and regulations making sure you always all papers in order and you follow all instructions to a tee.
You have to make sure you protect the technology you are going to present to the Chinese market, there is a great deal of industrial espionage. From the beginning you have to make allies and make sure you keep them happy, the Chinese market is not easy to enter and you will need good allies.
When you are entering the Chinese market you need to keep your cost down, it is essential to make sure you will be able to survive the Chinese market, it is highly competitive and it is also a market the is very lucrative if you do it right.
In China brands matter, so make sure you do a very good branding for your product, it is a must if you want to introduce a new product. It also gives some protection if your product is being copied illegally and sold on the Chinese market.
Mistakes not to make
If you do not manage the company yourself it is essential you have a CEO tat knows the market, it is so important if you want all employees to be on the same page and the product to be marketed and sold correctly.
It is a very bad idea to give your product away to gain market access, as we said before brand s are important to the Chinese and you will not be looked upon with a smile if you do so, and you will most likely not gain access to the market and most certainly not sell your products.
When you are entering the Chinese market you are there for a long haul, you are not to expect any short-term profit, it takes time to build a brand and to make money, the first period you will have only expenses and you should always make a long term plan to make sure you do not get surprised by it.
It is so essential to all that you are getting special benefits because you come a major company, you are bound by the same rules as anybody else and no exceptions are made.
Do not manage your company from abroad, you will not be able to, it is essential you have hands on control of your company every day to make it work and also work around the many distributors that will try and make a profit from your company and products, they are always looking to build their own and has no sympathy for neither you nor your company.
Legal issues and visa rules
When you are starting a company in China you need to make sure you have all legal papers in order you need all visa for employees and for the start of the company to be in order from the beginning.
Make sure you have your papers in order for a longer stay in China, like we said before you do not enter the Chinese market in a few weeks.
When you are starting up in China, make sure you have legal aid to get through the red tape that is everywhere, it is a country that has written and unwritten rules for business, as anywhere else in the world, that you will need to obey in order to get all thins in order.
Make sure you start well in advance, it is not easy to get working permits in China, it is not something you will acquire in a few days, it will take time and you need to be patient.
Make sure you have a working permit and not just a tourist visa.
Face the Dragon
Make sure you from the beginning have a good knowledge of not only the culture, but also the work ethics of China. Remember there is a huge difference from working in Beijing to working in the more rural areas of China.
It is also important that you quickly get a social life with people you are working with in order to find ways into the local community. Learning phrases and getting familiar with customs and language is an absolute must.
Costs in China is something regulated by the government and though you might think it is a free market all is regulated down to a tee. So are the pay scales and it is often frowned upon if you offer a lot more to get better workers and creating a work situation where you are stealing employees from other manufactures.
There is a huge leap from being a worker and management. You will need to differentiate clearly between the two.
In China it is a normal thing that you are not getting a pay raise unless you perform with perfection. It is required of a worker to perform well over what is expected if you want to succeed.
Do’s and Don’ts in Chinese offices
First of all, dress code for almost any company is something you would see. A conservative environment where you report to your superior and let him or her make the decisions is completely normal. You do not make any decisions yourself.
It is important that you remember that you are the new kid on the block and that your ideas will have to be implemented over time and that all employees no matter what position they hold will expect you to be polite and any confrontation will not be taken in front of others.
Fool Me Once – Shame on Me…
First and foremost, it is important that you hold the correct visa when you start working. If you hold for instance a tourist visa and works you will face a severe penalty such as fines, imprisonment and deportation. because you have broken Chinese law. This applies even if you were not aware of the situation.
In China you have to be aware of two types of work related scams that are the most common types used.
The first one is called the coaching job scam where you are invited to work as a coach in different kinds of sports or as a professional athlete. The job you are offered normally includes a very large salary and great benefits on top. The scam part is that you have to pay for invitation documents, different licenses, certifications for labor.
Be aware that in China it is the employer that will take care of all legal documents and no legitimate business will ever ask an employee to pay for these themselves.
If you already have paid you will not be able to get your money back and you will never hear from the so-called employer again.
The second scam is called the teaching job scam where you are offered an international teaching job in China that comes with a good salary and excellent benefits. But when you arrive at the school there will be no job waiting for you. They will offer to get you another teaching job and in the meantime you will have to pay for your own accommodation and other living expenses.
Most likely they will find you a teaching job, but your salary will be much lower and most likely there will be not be any benefits. Also with the teaching job scam the employer will have only made sure you have a tourist visa that does not allow you to take a job.
Many other do´s and don’ts
When you are trying to enter the Chinese marked it is expected of you to take in as much of Chinese language, culture, and business behavior as you can in a short period of time. This will make your way into the Chinese marked a much easier way and it will also give you many benefits when you have your Chinese employees on your side.
We will always recommend that you do hire specialists when trying to enter a marked so different from the ones you have been working on so far. It will make it a whole lot easier when you are able to always look ahead and not constantly be stopped by red tape or from your own mistakes because you have not done your homework and have no idea on how Chinese work ethics and rules are.
It goes without saying that having legal advice is always something you should think about. It will pave the way for you and make your entrance into any foreign marked a whole lot easier.