According to consultancy McKinsey, the explosive growth of China's middle class in the last decade has resulted in more and more companies establishing outposts, partnerships, and joint ventures within the Middle Kingdom's walls. Owing to this, entrepreneurs all across the world want to know the secret of how foreign companies can succeed in China. If you want to make your business flourish in this fast-paced economy, you not only need to know the two primary languages — Cantonese and Mandarin — but you also need to be able to interpret how business is done in this country. Here are a few secrets on how foreign businesses can succeed in China.
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Learn as much you can about China and the Chinese
When expanding your business to overseas markets, you need to have a detailed knowledge of the new market you are venturing into. No matter how the world economy develops, China is going to play a crucial role as it gets more integrated into the world economy. In China, the learning process never ends for entrepreneurs. Just when you think you're getting a grasp on how the Chinese people and markets function, the rules change and you're reminded of the complexities of this land. It is, therefore, important to go armed with knowledge so you suffer fewer setbacks.
The right partner can take you places
Since all the major players in China are Chinese companies, it is crucial to find a reliable partner to work with. Cultivating a relationship of mutual trust and respect with your Chinese partner can shorten the learning curve and increase the company's revenue drastically. Before you zero in on your partner, there are a few important questions like 'who are the major players' and 'what is their corporate culture' that you need answered. If the partnership is trustworthy, both sides can focus their energies on jointly developing new goods and services that will quickly pay off in the form of faster return on investment and revenue.
If you talk to any successful businessman, he will tell you that the success of his business is based on his employees and his close associates. The same principle applies in China as well. No matter where you hire your senior-most officials from, they need to be well-versed in the local languages of China so that they can conduct business with the Chinese smoothly. At the same time, a good manager needs to understand the work culture of the parent company and mould it to complement the Chinese work ethic in order to thrive in the Chinese markets. If you can find an individual who will not only be able to lead your team in China but also be able to lead cross-cultural teams across multiple geographies, you have a winner on your hands.
In addition to the above, foreign companies must be willing to keep up with the pace of change in China if they want to succeed. More than anything, valuing relationships above contracts will make your business prosperous in any part of the world.