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by Nick Kellingley
Many people are now viewing China as the next big opportunity, and starting a new business in the country can be relatively painless. However there are a few details you should be aware of the make the best of your investment. Here are 3 tips for getting it right.
Language
There are two major Chinese languages, Mandarin and Cantonese. If you’re aiming to start up in the North of the country then Mandarin is the only one that you need to spend time learning. If you’re looking at the South, particularly Guangdong province you’ll want to get acquainted with both. The exception to this rule is Shenzhen where the city’s status as an immigrant town means that Mandarin is dominant.
Why do you need to learn the language? Because English speakers are a rarity in China, finding someone who is a proficient translator/interpreter is a half-way step, if you really want to know what’s going on, you need to learn to talk to people.
Culture
The “face” culture is something that is often completely unfamiliar to overseas investors, it’s particularly confusing to find that while as a foreigner you have no “face”. You can take and give “face” to others far more effectively than a local.
What this means in practice is that no-one wants to appear wrong, or ask questions, or give answers that may be shameful particularly in front of you. This can make it very difficult to run an effective business in China.
Spending some time getting to grips with the culture can pay huge dividends in the long run, when it comes to quality and delivery.
Business Structure
There are three ways to start up a company in China, you can open a representative office (which is a very limited structure designed to allow you to hold meetings and buy things and not much more), a joint venture (usually with a Chinese controlling interest) and a wholly owned foreign enterprise.
More often than not it’s the last vehicle that is chosen by new businesses thanks to the practicalities of control and the ability to hire your own staff. It’s rare that that people choose a representative office because it works out more expensive for less flexibility than owning your own business.
It can
however be a wise choice to work with a local partner, as long as they understand your market place and you can obtain evidence of successful work in the past across cultures. Otherwise the inevitable clash of working practices may drive you mad.
When you want to get started in China don’t just rush in, choose to work with someone who knows the country and can help you address some of the issues highlighted above. It’s a fantastic country filled with endless opportunity but it requires patience and hard work to make the best of things.
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