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China is now the world's second largest economy and will surpass the United States in the next 10 years to become the largest. With this unprecedented rate of growth there are enormous opportunities for investors to become involved in business in the country. However the business environment can often be fraught with danger and there are many stories of overseas investments going horribly wrong. With that in mind here are some tips to make sure you get it right. Do your Research China's economy is extremely diverse and so is its manufacturing and production base. Some industries concentrate in a single area (for example most of the cosmetics industry can be found in Guangdong province) others are spread all over the country (such as the automotive industry). Each province has a different business climate and each sector may be treated differently in different areas depending on the needs of local economies. For this reason it's important to do your business research. You can start with chambers of commerce who may be able to give you a basic overview, and there are many specialist consultancies who can lend a hand in ensuring that your first trip is a productive one and aligned with your business needs. Learn the Language China is investing large amounts of time, money and resource on improving the English language skills of the population. However at this moment the country has one of the lowest levels of English literacy in the world as a percentage of population. What this means in practice is that often a company may employ a salesperson or two with English language skills (though in practice many of these folk don't have any real level of fluency) but the key decision makers won't. If you don't have the time or inclination to pick up the language yourself, you'll need to invest in translators and interpreters who can bridge the gap. Don't forget that there are two Chinese languages, Mandarin and Cantonese and that while Mandarin is the most commonly used Cantonese is more prominent in Southern China and in Hong Kong. Successful business is always built around clear communication, you'll need to invest in Chinese language marketing materials, information packs and business cards to support your activities too. Get the Right Partners Business in China is all about the relationship and almost never about the transaction, which means spending time and effort in developing a long-term arrangement. In China everyone has "guanxi" (the closest equivalent Western term would be "network"), and this "guanxi" enables individuals to facilitate introductions and relationships. As a Westerner you won't have any "guanxi" so you'll need to engage the services of an intermediary to introduce you to prospective business partners, and to help manage the early stages of the relationship. You don't want to rush things at this part of the selection process and you should allow for much longer timescales for building mutual understanding between your companies to ensure the relationship delivers as promised.
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