In today’s post, George Foster, the Marketing Manager at Day Translations, examines how starting a business in China comes with advantages that many of us are not aware of. Read his reasoning to find out why you should be doing business in China.
China is, without a doubt, one of the key global economic leaders. The country has now opened its market to international trade and its economy has radically transitioned from being agriculture-dependent to tech-driven. If you wish to be successful in China, one of the most important things to do is to understand its customers. But before you do that, it is important that you assess the opportunities that the country has for your scope and line of business, as well as the advantages that you will benefit from when you invest there. This understanding will come in handy when you will be formulating your entry strategies.
One thing you will notice once you decide to set up a company in China is that doing business in the country can be daunting for a new entrant. For starters, the country’s business culture is very unique and confusing for western companies. That is to tell you that even though the country is rapidly becoming modern and an important part of the global business landscape, the road isn’t entirely smooth. With that in mind, what are the key advantages of starting a business in China? Here are 5 of them:
1. Favorable government policies
The Chinese government has been very proactive in enforcing entrepreneurially supportive measures for both local and international companies. Some of these measures include helping young people to incubate their ideas, supporting creativity and innovation, and giving its citizenry business subsidies. These measures make China great for local entrepreneurs and, by extension, foreign entrepreneurs. With the manufacturing and transportation industries thriving as a result of government intervention, for example, foreign companies are able to get enough supplies for their shops easily and affordably.
Taxation and other investment policies in China are the unparalleled worlds over. The inland regions of China have lower tax rates for foreign companies than the coastal regions as a way of encouraging multinationals to open shop in rural China. The tariff policies for imported goods, on the other hand, are getting better and more favorable for foreign companies day after day. Moreover, the ports and road transport is near perfect here, so importing and exporting goods is very convenient.
2. Facilitative entrepreneurial environment
As a result of favorable government policies, it is very easy to find local business partners and investors in China. The youths are empowered and the business ecosystem is quite facilitative. Resources for growth are abundant both in rural and urban China. What’s more, cities such as Shanghai, Shenzhen, Beijing, and Hangzhou have the best tech infrastructures in the world, making business management effortless.
3. The abundance of skilled talents
Chinese young professionals are both talented and highly competent. The local universities are producing millions of skilled workforce every day, not forgetting that China has made it easy for international graduates to settle and work in the country. Bilingualism is also notably on the rise with many Chinese now speaking mandarin and English.
As a matter of fact, the Chinese education system has incorporated English as part of the kindergarten curriculum. High schools and universities are also encouraging kids to major in the English language. The long and short of this is that you are now guaranteed of finding a talented, qualified, and English-speaking young Chinese professional.
If you need skilled employees who can produce goods with the needed quality to successfully compete in global markets, you can always seek the assistance of a professional employer organization. If you hire a headhunting company in China it will be very easy for you to recruit the right staff.
4. Growth opportunities
China’s business policies and regulations are changing rapidly- some sectors aren’t even regulated- meaning that there will always be a new opportunity tomorrow. It is easier to operate a business within China’s internet finance and digital health sectors, for example than in any other developed economy in the world. Minimal regulation also enables entrepreneurs to experiment with ideas in a more flexible manner. By the time better regulation comes in when the industries are grown up and mature, you are assured that you will be in a prime position to claim a big chunk of the industry. This is indeed the best time to expand in China.
Social, political, and economic stability has helped China to grow consistently for the last three decades. These three are vital in guaranteeing a healthy business environment. They make the market predictable, so businesses can predict the future and strategize accordingly. That is why cases of hyperinflation and other business-crippling occurrences haven’t been heard of in China for a long time.