Business in China: What’s Up?
The COVID-19 pandemic might be slowing down, and governments all around the world are slowly planning on returning to something similar to the “normality” in the past. As the first country to feel the impact from the pandemic, China is also rising back to its former glory. BBC.com reports that China has reported an economic growth of 18.3% in the first quarter of 2021. Hence, new businesses were created, and job opportunities are advertised for new recruits.
The post-pandemic world also presents a new opportunity for new entrepreneurs. During the lockdown, e-commerce and digital marketing grew significantly. Online sales grew by 3% during the first two months of the pandemic, and it surely will not stop. If you are looking to start a new business in China, creating an online platform would be a perfect place for you, considering that it could also reach a wider range of audience. Plus side is: it won’t even bother your main job! You could just consider it as a side business if you are hesitant in leaving your main income.
Starting A New Business: Now (or never?)
Now let’s get back to the topic. Online sales or not, starting a new business in China is a pretty good opportunity, and one that you can’t afford to miss. Even before the pandemic, owning your own business is definitely a risk that will pay off with high rewards if you play your cards right. Perhaps, you would wonder: why now? Is it really the right time, considering that the economics are still in recovery? Well, we are here to explain why now, more than ever, would be the perfect time to open a company in China!
- Interest rates at a low point
Business climate in China and everywhere has definitely changed since the pandemic. New businesses are emerging in China after the lockdown. And if you are wondering ways to get a business loan in China, then worry not! Interest rates have been lowered as a result of COVID-19, and it’s probably best for you to seize this opportunity to invest in your business.
- Cheap, cheap, and cheaper
In this digital world, your business won’t be successful without the help of services such as Canva, Zoho, and other tools you need. Fortunately, due to the impact COVID-19 has on the economy, vendors need to activate their survival mode and offer a lower price for their services. With the promotional prices and discounts all flooding the market, what better time to be doing a business here in China right?
- Digital world: a world for everyone
One of the positives to be taken out of the pandemic is the increased networking via digital channels. As a result, it’s so easy to find talents you will need for your business to grow. Most of the workers out there are currently looking for a new shift and job opportunities. Before big time companies such as Google and Apple, who are aggressively hunting for fresh faces snatch them, you best bet that now would be the perfect time to hunt down quality workers. Can’t afford to pay them on a monthly basis? Worry not, as there are so many freelancers out there that could suit your criteria!
Time for You to Step Up
Another positive to be taken from the ever-growing world of digital platforms is the opportunity it presents for you to compete with big time players out there. With ideas and creativity, it’s not an impossible task to be David and beat Goliath. But those things alone are not enough, as there are a lot of Goliaths you will be facing out there. You will need strategic planning, as well as careful considerations to execute your mission in order to be the best and beat out other businesses in China.
There are a lot of ways to build and plan out your mission, but here are some of the basics you will need to know in order to really get you company going:
- What’s your passion?
It may seem simple, but it could be really essential. Here’s why: building a business based on something you like would definitely reduce the burden of “working” on your mind, as you are doing something you are passionate for. To start a business, you will need to do some background research. It will certainly require less time to research when you do something you like. The period of time you saved can be used for you to fasten up the launch of your business
- What’s happening out there?
Unfortunately, there’s a possibility that your passion doesn’t align with the trend. Don’t sleep on this fact, and make sure to study China’s business market. It would be a waste of time to build a cool company that attracts no interest. You could also check out the top 10 industries in China, and use them for your reference in starting your own. One more thing: try to think of what your potential customer needs now rather than what they needed before during the COVID-19 pandemic.
- Planning and execution
A good plan will help guide you to the right path. To make it right, you will need to answer some questions, such as:
- What’s the cost of doing business in China?
- How many tools will I need to help develop my business?
- What kind of marketing strategy I needed to use, and which platform to use it for?
Hopefully, those questions will be able to help you in mapping out your business strategy. You could also search out other companies and learn how they are doing their business in China.
Business in China for foreigners: doable?
Starting your own business is a very interesting opportunity for everyone, including foreigners. In fact, what better way to make a living by being your own boss? The Chinese government allows foreigners to start their own company. In fact, they could own a wholly foreign-owned enterprise, or WFOE. Other alternatives would be to open a joint venture and do business with Chinese companies. Either way, it’s a very exciting prospect.
Still unconvinced that doing business in China as a foreigner is a huge opportunity? Try to search for the list of foreign companies in China, and you will find a huge number of it. By the end of 2019, there were a total of 179,268 companies with foreign direct investment in Guangdong alone, and the list will keep on getting bigger as time goes by. Here are some of the top foreign companies you could find in China:
- The Daimler Group
- GE (General Electric)
- Walmart
- Microsoft
- Honda
- Casio
- Fujifilm
Mind the Culture!
As a foreigner, it is important for you to learn and adapt to the local culture. It will proof to be beneficial, and helps you to understand people in your environment. The same thing goes for business reasons. You wouldn’t want your business going down in flames just because of a clumsy misunderstanding with others, right?
Besides the local Chinese culture, you will need to understand the business culture here in order to avoid any errors. We have listed down some of the basic cultural knowledge that you could note down.
- Discipline
The Chinese held on to a strict discipline. They really value punctuality, and working hours are usually 8.00 am to 5.00 pm, Monday to Friday. They have two hours break within that period, and work stops during the time to eat, nap, or refresh yourself. However, sticking to an end of a schedule is not a common thing, as the end of an appointment is rarely scheduled.
Chinese people also held a strict hierarchy. During a meeting, people who enter the room first are the one with the highest rank.
- Conversation
Chinese people liked to have small talks at the beginning of the meeting. Popular topics to begin a conversation are: art, landmarks, climate, or travelling experience. However, avoid political-related discussion at all costs. They would also appreciate it if you learned and used a couple of sentences in Chinese.
- Numbers
Numbers play a huge part in Chinese business culture as well. As part of their beliefs, some number hold a good omen, whereas others don’t. Here are some of the examples:
o 8 is the luckiest number, giving something with this number means a good gesture too
o Number 6 is often considered as a blessing for progress and smoothness
o 4 is the number of death, and 73 means “funeral”
How to Register a Company as a Foreigner?
You may wonder this question, right? Perhaps you would worry that it will be one of the many challenges for foreign companies in China. But turns out that it is not a difficult task to do, after all. Registering a company in China is a simple task to do. Follow this task below!
- Prepare all of the documents
Typically, you will need to submit the documents such as: Legal ID, homecoming permit, and Shareholder ID. You will also need to provide the name address for your company, business scope, and proposed capital.
- Figuring out your legal structure
Before moving on, it is best for you to try and figure out the legal structure of your company. As previously mentioned, there are different types of companies owned by foreigners: WFOE, Joint venture, and Representative Office. WFOE is a company owned fully by foreigners, whereas Joint Venture is a cooperation between foreigners and Chinese partners with less restriction.
- Recruit talents
It’s highly advisable for you to try and recruit local workers for your staffs. They understand the local culture and market better than foreigners do. They could even provide you with suggestions to further develop your company while adapting to the local culture. To accomplish this, you will need to find a recruitment agency. They will be able to find top talents that are suitable for your needs.
- Opening a bank account
If you haven’t already, make sure to open a new bank account intended solely for your business purpose. WFOE is required to have a minimum of two bank accounts: an RMB basic account to help your daily operation and foreign currency capital contribution account for receiving financial injection abroad. Both of them will function are a must have for your operation, so be sure not to miss it.
- Find agencies
Registering a company by yourself will take a lot of your time and money. Therefore, you could use the help of agencies that specialize in this situation. We could help you to register your company!
So, what’s the procedure? After making sure that you have all the documents and legal files needed, you will need to follow these steps:
- Application for name verification and registration online
- Supply information
- Waiting for review the application. It usually takes up to three working days
- Finalization completed registration
- Business license obtained and your company is a go!
Sounds easy and simple, right? Just like that, you will own a legitimate international business in China. SME Brother won’t take you to a longer path in order to obtain your licenses. What are you waiting for? Go do some research for your business, and get rich by doing so!