China is often described as a very dynamic country where business moves quickly, with numerous factories and frequent business events. It may seem tempting to think that finding a partner will be fast and straightforward. However, such an attitude can be risky. Chinese business culture values long-term relationships built on trust, influenced by collectivism and Confucianism. Unlike in the West, contracts are often seen as secondary to personal relationships. Therefore, it’s crucial to take your time to get to know your potential partner. Ensure there is clear communication—ideally, find someone in the company who speaks English. If it’s a manufacturer, visit their factory to confirm they can meet your quality expectations. If it’s a distributor, ensure they understand your target market and have the necessary industry contacts. Remember, while building trust takes time, it will ultimately speed up your business operations once established.

China is often viewed as a large, centralized unit, but in reality, it is highly diverse, with regions that vary significantly in terms of development, infrastructure, and regulations. The location of your business or your subcontractors is critical. Not all regions offer the same infrastructure, and some areas are more relevant for specific industries due to specialized hubs that foster collaboration and dynamism. While the first-tier cities Beijing, Shanghai, Guangzhou, and Shenzhen are popular choices for business due to their economic significance, exploring emerging cities could also be beneficial. For startups, it’s essential to choose a location that best meets your operational needs and industry focus. To help you navigate the specifics of Chinese cities, take a look at PwC’s report “Chinese Cities of Opportunity 2024”, which compares 57 major Chinese cities according to 50 criteria.

Intellectual property (IP) issues remain a concern in China despite significant improvements in IP laws. To avoid unpleasant surprises, ensure that all aspects of your IP—such as invention patents, utility models, design patents, trademarks, and copyrights—are properly protected. Seeking professional advice to navigate the registration process is highly recommended. Even with strong IP protection, exercise caution in sharing sensitive information, particularly regarding product manufacturing. If necessary, have your partners sign Non-Disclosure Agreements (NDAs) to safeguard your proprietary information.

China has its own unique internet ecosystem and communication tools, with many Western websites and social networks being inaccessible due to the Great Firewall. To operate effectively in China, familiarize yourself with the country’s leading platforms, such as WeChat and Alipay—super-apps that integrate various functions, from payments to communication and service bookings. These apps are essential for daily business activities and communication with partners.

China is a challenging market due to cultural differences, language barriers, varying regional regulations, fierce competition, and risks associated with IP protection. The long distance and time difference with Europe add to the complexity. Startups, which typically have limited resources, may struggle to navigate these challenges alone. To maximize your chances of success, it’s essential to seek assistance from professionals and organizations familiar with the Chinese market. Whether private, public, or mixed, these entities can provide the necessary support and ensure a smoother entry into the market. Going it alone without local knowledge or contacts is risky, so don’t hesitate to reach out for help.