Member Article

Investing in the Chinese monster

With the Chinese government establishing policies in infrastructure, science and technology innovation, workforce development, safety, health and sustainability, the country’s manufacturing industry is continuing to rapidly grow and become increasingly more competitive on the global market. This, coupled with investments in key strategic markets such as high-end equipment manufacturing, makes China an interesting market opportunity for UK businesses to be involved with.

Due to the varied cultural differences between China and the UK, British businesses are not taking advantage of China’s rapid economic growth. The UK’s share of exports to the Chinese market has fallen to around one per cent over the past decade[1], raising concerns that Great Britain is not aligning it’s trade offerings with China’s fastest growing sectors.

A strategic approach

Entering any new market can be daunting for any company. Both the communication and cultural barriers can be off-putting when entering China, but if you plan your entry properly these barriers can be broken.

Taking a strategic approach to partnering with a Chinese business must be taken. For example, make sure you fully understand the market and whether it compliments your business’ goals and objectives. Conduct reliable research before venturing into any partnership, ask for advise, and make sure you understand the regional differences in the country. China should not be regarded as a single market as it is made up of over 30 different provinces and municipalities.

Contacting advisory bodies such as the Chinese Britain Business Council (CBBC), an organisation created to help UK businesses grow and develop in China, is a great starting point. The council supports UK companies to take advantage and gain knowledgeable information on one of the fastest growing markets in the world.

Opening up new opportunities

China boasts the world’s largest ICT market, with over 600 million mobile users and more than 400 million Internet users[2]. With this in mind, areas where UK businesses could profit are delivering more service-based offerings around communication and IT.

The country’s consumer gadget appetite is driving government investment. The country has long been a ‘factory floor’ for popular consumer tech gadgets, and China’s homegrown companies are challenging leading global brands and setting trends in telecommunications, mobile devices and online services.

UK businesses would be wise to look out for small tech start-ups that offer the latest consumer technology, whether that is the latest mobile device accessories or online app. Also, do not ignore those large Chinese companies that have now out-grown their home market and want to expand globally.

Confusing intellectual property protection laws

This has been the cause of many UK businesses being reluctant to invest in China. In the late 1970s, China had no intellectual property (IP) protection laws in place, but now the country has implemented strong IP regulations that challenges those in other countries. Many UK businesses have also questioned China’s IP protection laws’ enforcement, but substantial progress has been made, partly driven by the rise of ‘home grown’ intellectual property rights (IPR) developed and owned by Chinese companies themselves.

For example, Canton Fair has been a leader of IPR protection, and has established an IPR Complaint Office to help businesses. Any company who suspects an exhibitor has infringed upon its IPR, trademark or patent, can seek advise directly at the IPR Complaint Office to resolve the matter. The complaint office offers expertise and lawyer assistance there and then, and can help with trade disputes as well.

In China, the first person to register a trademark or logo is the legal owner. For any company looking to enter the Chinese market, it is crucial to be the first to register the company’s brand before engaging in any activity. This will hopefully guarantee the trademark or logo stays safe.

There are many great opportunities for UK businesses in China, but companies should still seek advise from local Chinese authorities when entering the market to protect the business’ products or services. Once your business has been established within the country, you will see it rapidly grow with the support of one of the most globally influential markets as your backer.

For further information on the 116th session of the Canton Fair (15th October – 4th November 2014) and how to register, please visit: http://www.cantonfair.org.cn/en/

[1]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211157/UK_Exports_to_China_-_Now_and_in_the_future.pdf

[2]http://www.cbbc.org/guide/downloads/2012_china_business_guide

This was posted in Bdaily's Members' News section by Mr. Xu Bing .