Doing Business Shanghai – What You Should Know

Doing Business Shanghai - The world today has been benefiting from years of research in technology. With just a click of a button, one can get just about any information instantly. Under this rapid pace, businesses around the world are demanding faster increase in sales and efficiency.

Nowadays the phrase “doing business” means more that just a profit-making activity for livelihood. Companies in every country are looking for ways to become a global brand and investing in various markets.

When China opened up its market few decades ago, foreign investors swept in and saturated the China market.

Since then, China’s economy has been escalating not only financially but socially as well. According to Embassy of the People’s Republic of China in the United States of America, China's GDP has reached US$ 2.23 trillion in 2006 which is ranked fourth in the world. Today, China has transformed into the world’s factory.

China may seem to be a huge potential gateway for foreign investors but the China market is not like any other market. With its long history and rich heritage, China has a distinctive culture which many foreigners are unable to comprehend.

Plunging into a market without knowing its practice and procedures is just like walking right into the lion’s den. Many have lost billions when entering the Chinese market despite their long haul of experiences.

To make it big in China, foreigners are unable to survive just with their experiences. The complexities on how the Chinese carry out their business poses a huge barrier for foreign investors.

Doing Business Shanghai: Language Barrier

Even though English is the international language, the majority of the Chinese populations do not have the full grasp of it. Hence, to be able to communicate effectively in China, one must be able to speak and understand the Chinese language.

As China is the only country which uses the Chinese language, not many foreign investors would be able to communicate with any Chinese organizations, distributors or supplies.

Thus, when you doing business shanghai, the language barrier between the Chinese and foreign investors have been a major issue for years. In most cases, foreign companies source for translators and middlemen before entering the China market.

Doing Business Shanghai: Network Building (Guan Xi)

The Mandarin term "Guan Xi" (pronounced as "ge-wan-si") means having relationships. The Chinese believes that to be successful, one must have good relationship with others.

Establishing good relationship means building up a close network with the government, other organizations and within your own organization.

In the business industry as we meet and negotiate with people all the time, the Chinese believes having close relationships with others would be the way to get things especially when investments in China would be under the administration of the China government.

It would be a huge risk to try to enter into China market without having any "Guan Xi" with anyone.

Editor’s Note: Though the culture of Guanxi permeates the whole of China, it is less dominant as Shanghai tends to be more “Westernized” when it comes to doing business. However, it always helps if you have the right connections, in any part of the world.

Firstly, there will be so many problems with the government and other organizations as foreign investors do not understand the China practices. In addition, they would not know how to handle these problems.

Thus, it is imperative to either have a network in China or to find a way to start developing "Guan Xi" in China.

Doing Business Shanghai: Marketm Research

Before embarking on a China investment plan, it is necessary to conduct a detailed market research. It would be recommended to have an individual or an organization that is familiar with the bureaucratic procedures and Chinese culture to aid the company.

This would allow a more fruitful negotiation with suppliers and distributors and a smoother administrative process.

The China market is really a window of opportunities but for foreign investors, every decision made with respect to China market entry is vital to the company’s future.

All investments have their own fair share of risks but issues like language barriers and different business methods; can create much complexities and problems for foreign companies.

For more on Doing Business Shanghai, Please Click and Read:

China Business Etiquette - Not Sure what to Do when Dealing with Chinese Businessmen? Read on for your Success!

China Management Tips – Not All Asian Think & Do Alike? Read This to Have an Insider Look At Chinese Management Structure.

Shanghai Business Negotiation – Don’t fret about business Negotiation in Shanghai & China. Read for Negotiation Tips to Learn.

Shanghai Business Tips China – First-timer to doing Business in Shanghai & China? Read Before You Enter!

Chinese Business Culture - Know the Culture before Doing Business in China. How can Hofstede’s analysis help you? Read on!

Shanghai Market Research – Doing Business in Shanghai & China for the First Time? You’ll Need Market Research to Succeed. Read On!

Registering Trademark China - What Must You Do to Register a Trademark in China? Read to Avoid Being Sued.

China Manufacturers Directory - Import / Export with China? There’s an Easier Way to connect with Chinese manufacturers. Read HERE!

China Voip - What’s the Outlook for Voip industry in China? What are the restrictions in China? Read on for more info.


Return from Doing Business Shanghai to Homepage

Alina Hoon is a consultant of Starmass International. Starmass provides professional consulting services to assist foreign companies to enter the China market, from China market research, competitor study and China market analysis till export to China. Visit more business resources at: http://www.starmass.com