How to do business in China

Author: RepGlobal

The economic explosion of China

China is one of the most promising countries of this 21stcentury from an economic standpoint. The economy is soaring.China is one of the only countries that experience a two digitgrowth. The size of the Chinese market is huge. China was the first country to reach one billion people, and they are nowclose to 1.5 billion.

A short trip to Shanghai allows a quick evaluation of thecountry's rate of economic development. Wherever you look youwill see cranes. Constructions of skyscrapers are everywhere.They replace the traditional three or four story homes. It is said that if you go to Shanghai once a year, you will not recognize the landscape from one visit to the next.

The emergence of China goes together with an uprise of thequality of life. There is now a large, wealthy middle class in the major cities.

From an industrial standpoint, Chinese companies are in constant development. Very competitive world-class companies are emerging. They are competing in global markets against the best American and European companies.

Between Modernism and Tradition

But China remains a traditional country in its approach to commercial trade. Deeply anchored into an ancient culture, the Chinese market is difficult to enter for a foreign company.

Business in China can only be done by relationships. You have to be properly introduced to the person you want to meet with by one of your relations. It is unthinkable for example to pick up the phone and call a company to try to sell your products. This practice is considered provoking, even insulting, and certainly
opposed to traditions. You will most likely close doors if you try to go this route.

This seems unthinkable for a European or an American, used to a market-driven economy. It seems like good business practice to them to pick up the phone and call a prospect. A CEO can call the CEO of another company to discuss synergies between their two companies. Not in China.

You also need to know that Chinese society is very hierarchical and seniority is a dominant factor. In a company the oldest person is generally the highest ranked person as well.

Many companies fail their introduction to the chinese market, either by ignorance of the local customs, or by thinking that economic development would change the traditions. But the companies that succeed are the ones that adapt to the Chinese
culture.

You must have a sales representative

You cannot call prospects directly. How can you make business then? Find a local sales representative. Only he will find the necessary connections that will introduce your company to your prospects.

When choosing a sales representative, make sure that he has the right connections in the industry you are targeting. Choose an experienced person who already has a full address book. A sales representative that is already in your industry, or that
represents other companies in your industry, or that worked for your competitors, will be the best sales agent.

Seniority being an important factor, make sure that your sales representative is old enough to be respected. A sales representative that is less than 40 years old will generally be less respected and his opinion may not matter as much.

About the author:
RepGlobal is a website that networks manufacturers with sales representatives and distributors worldwide.