Four Things To Consider Before Doing Business In China

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Thinking about doing business in China? Most businesses are. But to be successful there are 4 things you need to know before you start. Here they are.

“Within the four corners of its country, China is a world in itself.” – Gao Zhikai, former interpreter for Deng Xiaoping

When it comes to financial turn-around stories, they don’t get much bigger than China.

Literally.

Since its radical “reform and opening-up” policy of 1978, the Chinese economy has grown at just under 10% each year, overtaking Japan in 2010 to become the world’s 2^nd largest economy. And according to the Organisation for Economic Cooperation and Development, China is set to replace the USA as the leading economic power by 2016.

So, unsurprisingly, there is a great deal of interest from businesses all around the world in gaining market share in China. Unfortunately, many of them will not succeed due to a failure to adhere to four basic principles.

#1 Take your time

路遥知马力，日久见人心 lù yáo zhī mǎ lì, rì jiǔ jiàn rén xīn – As distance tests a horse’s strength, so does time reveal a person’s real character.

Most businesses trying to established in China focus on speed. Driven by fear of losing opportunities to competitors, they focus on trying to get on the ground quickly. And this causes them to set unrealistic goals such as “launch Chinese operations within the next 6 months”.

However as the Chinese proverb above shows, time is a strategic weapon in Chinese culture. And so any business rushing to establish a presence in China will find their hurried-time constraints being used against them in negotiations with Chinese counterparts

Put simply: doing business in China is a long-term commitment...be aware of this before you embark on it.

#2 Build trust

冰冻三尺,非一日之寒(bīng dòng sān chǐ, fēi yī rì zhī hán) - It takes more than one cold day for a river to freeze three feet deep.

In line with the principle of time is the importance of building trust. This is an important fact, wherever you do business in the world. But when it comes to doing business in China as an outsider...this is especially the case. Don’t focus on making a quick sale, but on building a foundation of trust that will help you make many sales for the entirety of your time in China.

#3 Understand (and respect) the context

惩前毖后(chéng qián bì hòu) - Learn from past mistakes to avoid future ones.

When Dropbox’s services were blocked twice this year in China, FTP and other file-sharing service providers were sent a huge wake-up call: understand and respect the context of where you’re doing business. In this case, the context involved the Chinese government and the Great Firewall of China. These are two huge factors you need to bear in mindright at the start...and you need to understand how they will impact your business.

#4 Don’t forget about big data

读书须用意，一字值千金dú shū xū yòng yì, yī zì zhí qiān jīn – When reading, don’t let a single word escape your attention; one word may be worth a thousand pieces of gold.

According to the International Institute of Analytics (IIA) and the IDC (International Data Corporation) the global market for big data is worth $16.1 billion. With China set to be the world’s leading economic power...in a world where business is being done ‘in the cloud...you need to be aware that data is now the new global currency.

As a result, the China file sharing provider you use in handling data transactions becomes a crucial asset that you need to verify and safeguard. Because not only does it need to ensure a fast transfer of files to and from China, but it needs to protect the data involved in transit and at rest.

Bear these four principles in mind, and you should find your time of doing business in China to be extremely profitable.

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