Navigating the unfamiliar business landscape in China

The desire of Australian businesses to “set up shop” in China doesn’t always translate into success, due to a knowledge gap on how to structure business operations appropriately, accortding to national business advisory firm Bentleys.

Mark Chapman, CEO of Bentleys, said “A number of Australian businesses – of all shapes and sizes –rightly gauge the lucrative opportunity the Chinese market presents; with its rapidly growing middle class who covet Australian-produced goods, and Chinese businesses who view Australia as a preferred trading partner.

“Unfortunately, on the flipside of the opportunities there are some very real challenges for businesses who are not accustomed to China’s demographics, culture and complex bureaucracy; which can lead to less than desirable outcomes.

“In addition to cultural differences, businesses are faced with the challenge of effectively managing the tax rate which requires proper tax advice; the reality of IP issues with stolen trademarks being the number one problem in China; as well as having to develop trusted contacts which can be difficult with no existing partnerships,” Chapman said.

“The key really for local businesses to not just survive but flourish in international markets, is to partner with experts who can help remove the uncertainties and risks of doing business in China.”

Chapman’s comments come as Bentleys and the Hong Kong Corporate Services Group, commence a national Australian roadshow, which aims to arm local businesses with practical tips and advice on how to navigate the unfamiliar China market.

Thinking outside the box

Ken Deayton, Founder and CEO of the Hong Kong Corporate Services Group, who will be presenting at the roadshow, encourages Australian businesses to take advantage of the “one country, two systems” ethos and look to Hong Kong as the gateway to mainland China.

“Hong Kong is a Special Administrative region of China, located in one of its richest and developed provinces and serves as a two-way interface between the mainland and the global marketplace.

“As one of the world’s freest economies, Hong Kong has no barriers to trade, no restrictions on inbound or outbound investments, no foreign exchange controls and no nationality restrictions on ownership of property. For Australian businesses, establishing a basecamp in China, Hong Kong is ideal,” Deayton said.

“To thrive in China, it is important for Australian businesses to think outside the box and to consider which businesses or services can support the growth of China. To do this, businesses should seek advice from firms like Bentleys and the Hong Kong Corporate Services Group having been based in Hong Kong for over 41 years, have an intimate knowledge of the varying interpretations of the rules at a provincial level, and can partner with businesses so they can continue to focus on growing their business,” Deayton said.

Chinese growth sectors

According to Bentleys, there is a strong demand in China for renewable and clean technology and educational services, notably services relating to aged care.

“China’s ageing population is rapidly rising and there is an increased demand for education and training around the operation of aged care homes, an area that China views Australia as excelling in,” Chapman said.