More and more foreign companies are deciding to start doing business with China, which is why the Asian giant is already considered one of the main sources of foreign investment worldwide. It was in 2016 when its direct investments reached a record $225 billion and, from then on, the numbers have not stopped growing.
Faced with this situation, the Asian country has had to tighten the conditions for authorizing the entry of foreign companies which, together with the difficulties of negotiation, language and culture of its inhabitants, foreigners are forced to deal with some difficulties when it comes to doing business:
Market access
The Asian country may appear to be a difficult market to access for those interested in doing business there for the first time. The reasons for this are diverse, although the main obstacles stem from the purchasing habits of consumers in the country, legal requirements or local distribution networks. That is why doing business in China for the first time can be a complicated task for many.
Governmental limitations
As a result of the economic growth experienced in China in recent years, the government controls the entry of new businesses more exhaustively, making the establishment process in the Asian country longer and slower.
Slow negotiations
As we have already stated on other occasions, businessmen are somewhat distrustful when doing business with foreigners, causing negotiations to take longer than usual or, in the most serious cases, not to reach any agreement at all. The person interested in doing business in China should try to be as interested as possible in its culture, environment and work. Patience is a key element when doing business in the Asian country.
Bureaucracy
Bureaucracy represents the first concern of foreigners when expanding their business in China. Specifically, the issuance of licenses and permits are some of the most contentious parts of the whole process.
Intellectual Property
Intellectual property is a complicated issue in the Asian giant, although in view of some recently published reports, this area is starting to become simpler.
Competition
Chinese companies are striving daily to improve the quality of their products and services in order to be more attractive to foreign consumers, causing competition to increase. Consumers and government could give priority to domestic companies, thus ensuring a better market balance.
Contacts
Entering China without contacts, known as “Guanxi”, can be complicated. It is essential to have contacts when starting a business in the Asian country, as this increases the possibility of establishing the business in a faster and more effective way.
Due to the complexity that these issues may involve in a first contact with the Asian giant, our recommendation is to resort to professional services such as those offered by MingTa Group. MingTa offers you a personalized consulting service to facilitate your business relationships with Asian manufacturers and suppliers.
Putting yourself in the hands of companies like MingTa Group is a guarantee of success. This is evidenced by the recognition awarded to them at the 4th edition of the Offshore Excellence Awards, where they picked up the award for “Best Procurement Company in China 2017“. If you need to resolve any doubts before starting a purchase process in China, you can send them your questions via e-mail, info@mingtagroup.com, or through our contact form.
