2021年2月20日

How to Succeed in Business in China: 8 Tips

With a population of over 1.4 billion in China (almost 1 in 5 of all people in the world) and an economy that has improved a lot over a long time, the Chinese market is a market with many opportunities for Norwegian companies. Although there are many opportunities in the Chinese market, we often see a lack of knowledge among companies related to how to bet in China.

In this article, I address important areas that Norwegian companies should focus on to succeed in China.

1.   China is a demanding market to establish in itself. Therefore, investing in China should not be a quick-fix. One has to think long term and be willing to spend resources on planning vital areas of focus that include everything from significant to small things. For example, A. one should spend resources on local law firms, but also do do that on smaller things like B. translating product information and Powerpoint presentations of products and services into Chinese.

2.   Focus on clarifying the uniqueness of the products and services you want to offer in the Chinese market. You should have an overview of what technological solutions they already have, and keep in mind that it is difficult to outperform Chinese companies on things they are already good at. In general, we see that there is a high demand for Western products in China, which also means that there are many opportunities in China for companies that play on the unique Nordic and Norwegian products (fewer antibiotics, purity, quality etc.).

3.   Have sufficient knowledge of the Chinese market. In which industries are there the most opportunities? Among important sectors where there is a lot of potential for companies are water and waste treatment, pollution reduction solutions, EdTech, renewable energy and technology, shipbuilding, offshore, seafood and aquaculture, biotech, E-commerce etc. Also remember that China is a vast country with many and large provinces, where the choice of place of an establishment can result in lower taxes, operating costs etc. Get an overview of this.

4.   What we often see in the Norway China Business Hub is that many companies do not have sufficient knowledge about digital visibility and E-commerce in China and how this works. For example, Google does not use Google in China. Therefore, you should have your website in Chinese (adapted to the Chinese customer segment), registered in China. If you do this, you can use keywords in China as we do on Google Ads. Also use other Chinese platforms such as WeChat, Weibo etc.

5.   Use time and resources to build trust among Chinese actors. In Chinese business culture, there is a significant focus on getting to know and trust each other. Spend time presenting products and use Chinese for presentations. By using Chinese, one shows a willingness to cooperate, and it is easier for the Chinese players to gain the uniqueness of the products and services they want to convey. Use a Chinese business card on one side of the business card and add a QR code to the WeChat app on the card so you can follow up the contact you have had with the Chinese players after meetings. Invite key players to dinners and get to know each other. At such events, it is vital to know A. which person is the most important in the group you meet and who makes the most decisions and B. who it is who works under that person and is responsible for the practical things. The Chinese culture is more hierarchical than the Norwegian, and it is therefore essential not to waste time on the wrong people during socialization with Chinese actors.

6.   Being present in China makes it easier to build good and personal relationships, which is an essential part of what is needed to achieve success. The critical and widely known term in Chinese business culture is "guanxi," a word that can be translated as "relations." In practice, this concept means building and maintaining good relationships. As I have pointed out in this article, effective communication and the ability to build relationships are also the results of an understanding of roles and hierarchy in Chinese business culture.

7.   An essential part of communication in Chinese culture is a great focus on harmony. Chinese people seldom say no if this can ruin the harmony in a situation. Many companies are surrounded mainly by yes people at an early stage in the venture, which unfortunately results in failing to catch up on problems before these problems stop entire projects. Get help from someone who knows the local business culture and that you trust, so you pick up issues early on (before they scale up). Remember that it is crucial not to lose face in China, so "a yes is not always a yes" in a communication situation.

8.   Many Norwegian companies do not attach enough importance to the value of IPR (intellectual property rights) and the registration of trademarks when doing business in China, due to a view of China as "a country where this is not important." Many believe that one cannot be protected in the same way as in Norway and that a written agreement has no legal significance in China. Use a local law firm and start applying for IPR and trademarks as early as possible. Also, take a background check of Chinese companies that you consider to be a future business partner. By doing this, you will get an overview of tax violations, business-related environmental issues, customs problems, corporate workplace security issues, and currency exchange issues, etc.

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