China has proved to be one of the most attractive economies where the Foreign Direct Investment or FDI is concerned. This has been possible because of the continuous expansion of the domestic market as well as the sustained increase of the economic growth rate. However, the same cannot be said about the returns that the foreign investors expect of the investments in the long term. Very often uncertainties linger regarding this, as there exists various restrictions over the foreign policies together with unreliability of the legal system that is lacks the required transparency.
Compared to those imposed by other countries, potential investment restrictions of the Chinese economy happen to be stricter in nature. Though it attracts criticisms, China was seen to respond quickly to the global recession which got inflicted upon the world economy in 2008 and its GDP rate saw rise being 9.2%. 10.3% and 9.2% in 2009, 2012 and 2011, respectively. Economists have predicted that the GDP rate of 2012 will be roughly 7.5% and in 2013, the same is expected to be somewhere between 8.3-8.8%. Where the FDI is concerned, China saw a hike of almost 15.9 percent from 2010 to 2011 which in figures, resulted at 95 billion dollars.
All these figures and various statistics can lead to the conclusion that as a whole, China is a fast developing country that has several opportunities in various sects of the industry, both in the urban as well as the rural areas. The economy of the China has different features that can work for the best or for the worst, but it really does make an interesting economy to explore. Here is how:
Existence of an agent or a distributor:
The Chinese economy attracts various overseas participations, which also include exports coming from the SMEs. These SMEs, unlike the big guns like the multinationals or even the international companies, work through regional distributors or agents for expanding their business as well as building their sales network. These agents assist in collecting market information for the local as well as the national market and are also help in keeping track if any kind of updates is found regarding market regulations.
Most important opportunities:
One has to have a thorough knowledge of the market before attempting to do business. Especially in the case of exporters, they should have absolute willingness in devoting a great deal of time in exploring different opportunities that will make their way. One of the main keys of success in the Chinese market is to build long-term relationships with people of different levels in different organizations. With the growth that has been seen in the sectors like chemicals, energy, transport, one can safely say that China is an important market for a variety of products as well as services.
Strategy adopted in the Chinese market:
Before deciding to do business in Chinese market, it is always advisable to the company that it should visit the country to get the actual vibe as well as better understanding of the Chinese economy. It is a more or less volatile market with different opportunities and thus a personal visit would definitely benefit the company, as it will help in providing valuable insights regarding the business and market culture of the country. Moreover, there is a small but important trivia for the exporters wanting to have a go at the Chinese economy. They should know that the country has different regions and each of them have its own distinct economic as well as social features. Moreover, most of the foreign companies tend to take the assistance of a local agent who acts as the middleman who helps in the proper promotion of the foreign products as well as services because of their contacts in the local markets. Because of all these diversities, any company is advised to understand the different market policies regarding customers, distributors, and suppliers.
After sales services provided to customers:
One of the most important policies that a company can adopt is to provide proper after sales services to its customers that can make a huge difference in the customers’ viewpoint of the company. Different foreign invested enterprises and various wholly owned companies are now successfully providing the above-mentioned services in the Chinese market. These companies are gradually acquiring a strong hold in this economy and one can say that these kinds of after sales services, training in customer services has played an important role which have lead their path to success.
Selling techniques used in the Chinese market:
Doing business in the Chinese economy can be quite tricky. Where on one hand the Chinese people welcome foreign made items, they still prefer the manuals and catalogues to be in pure Chinese. They do require the support of a local representative of the foreign products that they are using. This should be kept in mind by the exporters as a major percentage of their success depend on this point because, though the English language is used in almost all the major cities, still it has got its limits. Again, as we have discussed earlier, Chinese people believe in building a strong relationship with their business partners. This might require the investment of quality time which could mean even many months. But the foreign importers, investors, exporters should preferably try to maintain a cordial as well as close relation with their Chinese partners as this would ultimately lead to their success in the business front.
For all these reasons, Chinese economy is a very attractive as well as a fast growing economy that still keeps the light of having a strong bond alive in the business relations, which is seen to be missing from almost every other economy of the world. In that way, it is a deep economy. It has its own pros and cons and one really needs to explore this economy to its potential in order to have success from the same.