Common Business Challenges For Companies Wishing to Enter China or Other New Markets Abroad

FlagI believe that the concerns faced by companies from any country are very common when it comes to seeking business opportunities in China, or anywhere else where the business, language, and cultural differences are significant.

While the following advice is not an in-depth report of how to do business internationally, I hope that it may highlight some common sense approaches to frequent general questions.

As many experts would advise, it is a good first step for any company (that wants to do business in China for the first time) to think of China as Europe, with vast cultural and language differences between one end of the Country and the other.

In doing business abroad, it is important to approach the new opportunity with good attitude. Of course, certain precautions are expected to be taken by any business when entering a new market. However, do ensure that you approach the new relationship with your Chinese counterparts with an attitude of trust, openness, patience, and mutual cooperation. I have seen/heard of companies that approached a new relationship with an attitude of “I’ll assume my potential partner is a crook unless they can prove otherwise” and became the business case for a self-fulfilling prophecy.

Remember that your potential foreign business partners are as apprehensive of doing business with you as you are with them. So keep an open mind and the chances of your success will automatically improve significantly.

With that in mind, the common challenges, in my experience, would be the following:

1. Language

This includes both interpretation and translation. You will need a decent interpreter to accompany you to meetings and trade shows. Also note that translations of legal contracts from English to Chinese by professionals can be costly, but necessary. Ensure that there is an agreement with the Chinese counterpart about which version (English or Chinese) prevails if a change in the meaning of a clause or document occurs during translation.

2. Communications

Perhaps a related aspect to the language factor is the ‘culture of communication’ that exists in the new market(s). Questions such as “What is a common response time to emails and messages” in China are important to understand beforehand in order to manage expectations. This will help you to avoid a communications gap that might lead you (or them) to misinterpret long response times as an indication of non-interest in the business opportunity instead of it being a simple cultural norm in that particular country.

Here is one hint: Be aware of local holidays in the other country. Chinese New Year is usually accompanied with a month-long hiatus in business activities. Labour day equates to a week of slow-down. Major events like elections can also contribute to a general slowing down of business activities.

3. Legitimacy and Non-Performance

This is the big and common concern with doing business in foreign countries. It is even a bigger concern in countries where regulatory frameworks don’t offer much protection or viable recourse for non-delivery/performance.

I would suggest you follow some of the following methods in vetting your opportunities/partners so as to reduce the risk of seeking legal recourse later:

  • Seek help and recommendations from your country’s trade offices in China (e.g. Brazilian Chamber of Commerce, World Trade Centers, Commercial/Cultural Attache office of your Embassy in China, etc.). Often times they can vouch for the reputation of a local company or business person.
  • Check your potential partner’s standing/reputation in local professional associations of your industry, accreditation bodies, or 3rd-party assessors (e.g. credit bureaus)
  • Seek referrals from business people you can trust, whether in China or in your Country.

For a new market entrant, almost all the above can be easily achieved by working with a local partner/consultant. They can help with your legal, business, financial, and cultural integration. They can also assist with interpretation, HR, and sourcing what you need.

So go forth and frollick in this exciting world of international business and global opportunity. The rewards are certainly worth it, and a little courage can take you and your company a long way!

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