Trade Wars. Telecommunications Scandals. Data Privacy Espionage.
The media has sensationalized China’s interference in America’s future of continued technological leadership. And, while there is still a lot to be uncovered about these controversial current events, what the media is getting right at least is the fact that the world should be more focused on China.
When I was tapped to speak at Shapr’s Connector Club, I suggested we focus on international expansion into China. The decision was made internally to instead focus on expanding internationally more generally. The hope was that this would appeal to more people.
My thought was that if anyone took global expansion seriously, then they would be looking at China. For me, China isn’t just big enough to focus on solely, it is the only country in the world that is shifting the balance of power from west to east.
Just look at the top 10 most valuable tech companies in the world. Number 6 and 7 are Chinese companies (Alibaba and Tencent respectively). And the Fortune’s Global 500? Number 2, 3, and 4 are all Chinese.
China’s One Belt One Road initiative seeks to create a new global trade circulation that puts China at the center of it all. It’s a lofty plan not without its issues. But what it shows is the ambition of a nation not to be ignored.
On one subzero evening last week, the panelists and I highlighted many tips on how to go about entering the Chinese market.
Some important tips
- Find a partner who has the relationships and prestige necessary to drive your business forward
- Who you know and your familial/educational background is important
2. Explore routes through Hong Kong
- Hong Kong adheres much more closely to the international standard and can be a great landing pad for companies looking to enter China
3. Begin learning Chinese
- Business is still by-and-large conducted in Mandarin. Learning even a little will help you earn the trust of your Chinese counterparts
4. Explore your organizational structure options and be prepared to compromise
- Succeeding in China may not be what you were hoping for (ie: you may need to give up a large percentage of the joint venture to the local operating partner)
5. Have patience
- China is still transforming from the old way to a new way. In your encounters with the old way, you will find things do not move as quickly as we are used to in the west
China can be a daunting place to attempt to penetrate and too great of a risk for many companies. Danye Wang wisely said —
“Be sure that the reason you want to go to China is not something that you can solve at home instead. Maybe it is better to expand to other parts of the US and not China, or to make a shift internally to optimize your business”.
Going to China is not always the best option.
Regardless of where our business takes us, it is undeniable the future will be shaped by the east as much as by the west. To consider the topic of China a mere side note in a conversation on globalization underestimates the impact of its influence on the world.
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