China’s role as a global economic leader is by now consolidated, having radically changed its economy from a predominantly agricultural one that was generally closed to international trade, to a market oriented one with dynamic banking and private sectors, China is now top of the list of countries for whoever wants to expand and invest internationally.
In 2008, foreign direct investment in China rose to 108 billion US dollars making the country’s economy the largest in the world second only to the US. With a labour market both large in size and high in quality, and a government so committed to international development that it has recently singled out key sectors for tailored government support, doing business in China should be high on the agenda of any company across the world.
While China’s first push was based on the export of highly competitively priced goods, its growth in recent years has turned it into a major importer of western products. Coupled with the size of its population and the rise of the Chinese middle class, this offers any international company doing business in China access to one of the world’s most important markets for an immense variety of services and goods.
At first glance doing business in China might appear difficult due to cultural differences. However, these should not be seen as obstacles as they can often be turned into a competitive advantage. For example, Chinese society is generally considered a very traditional one, where interactions are governed by status, and fostering good relationships with the right people is key to success. At the same time, the Chinese are, like many westerners, goal driven, striving to be successful in everything they do.
By approaching negotiations or other dealings with a similar objective of achieving the best for both parties, a shared sense of commitment is reached which will result in success in the short and long-term, as well as in the likely establishment of a long-lasting business relationship. Once your business has established strong ties with Chinese counterparts, their commitment and drive to expand internationally will open new avenues that go well beyond China’s borders.
Chinese people have a very high work ethic and look to succeed by developing a wide array of professional skills. As a result, those doing business in China will nearly always be dealing with highly committed and competent individuals who are keen to excel not just for their personal gain, but also for the larger aims of their company. This, combined with the high level of organisation and discipline within Chinese companies, makes doing business in China not only profitable, but also highly rewarding.
As mentioned above, by doing business in China international companies gain access to a large pool of highly educated and talented employees. According to the BBC, China’s higher education system is now the largest in the world, both in terms of overall enrolment and in the number of P hDs awarded. This home grown labour market ensures that anyone doing business in China will be dealing with the best and brightest in a wide array of disciplines, many of a very technical nature. China’s commitment to education makes it a very attractive place for organisations doing business in overseas markets.
Harnessing these benefits when doing business in China is only possible if international organisations have the skills and know-how necessary to navigate the many geographic, linguistic, religious and cultural differences present in Chinese culture. International organisations employing people in China or working with Chinese nationals on a regular basis should run a series of cross-cultural training programmes such as Doing Business in China to ensure they develop the level of intercultural competence they need to successfully deal with the many cultural differences in Chinese business.