Imagine this: you've just landed in Shanghai, a bustling city where the lights are never turned off. As a businessperson, you're looking forward to exploring the opportunities in the world's fastest growing economy. You have your business plan and your goals set, but do you know what you're getting into?
Luckily, there are experts who can guide you. The EU Chamber of Commerce in China, for instance, is a non-profit organisation that represents the interests of over 1,600 European companies in the country. Their president, Jörg Wuttke, has spent decades doing business in China, and has valuable insights into the challenges and opportunities of this dynamic market.
In this article, we'll delve into Wuttke's insights on the business outlook in China and what you need to know to succeed.
For Wuttke, there's no doubt that China is an attractive market for European companies. "It's the most important market for most businesses, and the most dynamic market," he confirms. In fact, China's GDP grew by 6.8% in 2017, and is expected to continue growing in the years to come.
However, as with any market, there are challenges. One of the biggest is the regulatory framework. "The regulations are sometimes unclear, and there are discrepancies between national and local regulations," Wuttke explains. For instance, a company looking to set up a joint venture in China may have to navigate a complex web of licensing requirements, local regulations, and bureaucratic hurdles.
Another challenge is the language barrier. While China's English proficiency is improving, most businesspeople still need to hire translators or interpreters to communicate effectively with partners and regulators.
However, Wuttke says that these challenges can be overcome with the right mindset and strategy. "It comes down to understanding the market and building relationships," he says. "Don't expect to go in and make a quick buck. Invest in the market, and invest in the relationship building."
Wuttke points to several European companies that have succeeded in China. For instance, Mercedes-Benz has been producing cars in China since 2005, and has seen its sales grow substantially in recent years. In 2017, the company sold over 600,000 vehicles in China, making it their biggest market worldwide. Other success stories include Siemens, Volkswagen, and BASF, all of whom have established strong footholds in the Chinese market.
In addition, Wuttke notes that the e-commerce boom in China has opened up opportunities for smaller businesses. "With online platforms, smaller companies have access to the market that they didn't have before," he says. "They can sell their products directly to Chinese consumers without having to set up a physical store."
Alibaba's Singles Day, which is the world's largest online shopping event, is a testament to China's e-commerce boom. In 2017, the event generated over $25 billion in sales, with over 140,000 brands participating.
So, what can you take away from Wuttke's insights on the business outlook in China?
Wuttke shares his own experience of doing business in China. "I remember the first time I met a delegation from the National Development and Reform Commission. I was expecting a formal meeting, but instead we went out for a karaoke night and had a great time. It was a turning point for our relationship," he recalls.
He also shares a success story from the European Chamber of Commerce in China. "One of our members, a German SME, had a very innovative technology for cleaning up water. They came to China and met with all the relevant stakeholders, and within six months they had signed a cooperation agreement with a Chinese company. Now their technology is being used all across China."
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Category: Business, Asia, China, EU
Curated by Team Akash.Mittal.Blog
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