Tips For Doing Business In China

Dusk scene in Shanghai China

The Chinese market is an attractive one for global businesses for several reasons.

Aside from the region now officially boasting the second-largest global economy, and the area playing host to a huge number of consumers with ample liquid assets, the Chinese people have also been fairly quick to embrace Western brands.

While the benefits of setting up a business in China are many, there are some things that business owners should take note of before they pack their bags and enter the Chinese market. 

Be Aware of Cultural Differences 

While China has embraced several Western ideals, there are still some major differences between the two cultures that business owners need to be aware of if they wish to succeed in this region. 

For example, Chinese culture places some very specific meanings to certain colours. Black, for example, is a fairly neutral colour in most parts of the world but, in China, black is associated with evil, sadness, cruelty, and destruction and the Chinese word for black also stands for bad luck and illegality. This makes it a colour that should be avoided as much as possible when looking into branding products for the Chinese market.  

Embrace Local Resources

Having a few good local connections can help business people learn how to overcome certain logistical and cultural hurdles. While it is possible to make connections with other businesses, hiring these resources is also an option. However, due to some key differences in labor laws between China and other countries, employing local staff is not as easy as it sounds. That is why many businesses rely on an employer of record (EOR) or independent professional employer organization (PEO) for their staffing requirements. 

In China, employer of record (EOR) companies act as both recruitment agencies and HR departments. These companies hire and manage staff on behalf of their clients, managing all aspects of the process including paying wages, dealing with employee taxes and benefits, and ensuring that all local labor laws are followed. Resources such as GlobalizationPedia, an online EOR and PEO and matching tool, can assist with finding the right solution for a business’s needs by providing insight into reputable companies, such as this employer of record, who can assist with their global expansion plans. 

Learn to Speak to Chinese Values

When it comes to values, Chinese businesspeople put a lot of emphasis on the importance of relationships. This is mainly because the culture in the region, due to a long history of communism, still values the collective far more than the individual. This means that many Chinese businesspeople associate their work identity with their company rather than themselves, so their decisions will be driven by a desire to do the company well rather than for individual power. 

Also, the power hierarchy within businesses in China is taken much more seriously than it is in places like the US and the UK. When dealing with Chinese organisations, Westerners must pay careful attention to this hierarchy to avoid offending their business partners. 

All business expansions present their unique challenges, and businesses looking to make a name for themselves in the Chinese market will certainly face their fair share of hurdles to overcome. However, for those who can learn to adapt to the complexities of doing business in the region, the financial benefits have the potential to be massive. 

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