China's accession to the World Trade Organization is a significant global occurrence. China is poised to become an economic superpower, profoundly affecting the globally competitive capabilities of small and multinational corporations alike.
China offers astonishing growth and exploding domestic market promise. What will it take to go after this spectacular market?
Below, two experts discuss their insights about selling in China successfully.
Dr. Tamara Monosoff is founder of ScoutAsia, a pan-Asian consulting company headquartered in Hong Kong and subsequently relocated to the United States. The company provided industry research, logistics management, and access to a network of expert consultants for companies and organizations seeking to expand into Asian markets. Currently, Dr. Monosoff operates Mom Inventors, Inc., based in Walnut Creek, California.
1. Know the market. There are tremendous business opportunities in China, but don't assume that Chinese buyers aren't looking at other options. Your product or service may need to be altered to fit local needs or interests. Senior executives in Asia are quite accessible, and time spent meeting people before entering the market is essential. Government and quasi-government organizations have considerable influence in Asia and can assist you. Additionally, there are consulting and free services available to make introductions.
2. Use Hong Kong as your base to enter China. The most notable advantages of using Hong Kong as a starting point into China are the availability of a reliable legal and financial infrastructure; a 15% flat tax rate; the ease of establishing a business entity; and experienced local tri-lingual (English, Mandarin, Cantonese) executives and consultants who can be hired.
3. Learn about Chinese culture. American and Chinese negotiation styles are dramatically different. Properly handing your business card (with two hands) and using a Mandarin or Cantonese greeting will go a long way toward showing and earning respect. Contrary to the American style of working deals, negotiations in China are largely dependent on relationships and consensus decision making. One American executive nearly killed a deal in Hong Kong when his Chinese counterparts allowed three signing deadlines to pass. But the deal was finalized by allowing additional time for consensus building, making some minor contractual changes and offering a price that ended in the “lucky” number “88.”
4. Leverage an existing relationship. Work with a company that already has a Chinese presence; however, be aware that international marketing partnerships are effective in Asia only when you build relationships and work directly with your partner's local staff. Cultivate “zhongjian ren” (the intermediary) because a gifted Chinese go-between is indispensable even after an initial meeting takes place.
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