The Chinese market has grown tremendously in recent years, becoming the world’s second largest economy. In this case, foreign companies entered Chinese trade, either through direct investment or through cross-border procedures. However, investors who want to do business in China face some challenges. Here are some of the challenges of doing business in China:

• Cultural factors
• Bureaucracy
• Logistics issues
• Trust building problem with overseas partners
• Slow progress of thing

Cultural Factors

If you want to do business in China, you must be highly sensitive to Chinese culture and how it affects your business. Accordingly, hierarchy is indeed an integral part of business culture in China. Chinese rulers and leaders expect complete obedience without question. If you’re a westerner doing business in China, you must show respect, as China has a great history of being exploited through many foreign countries. For example, giving gifts, accepting hierarchy, attending meetings without exception, addressing people strictly by the first name, and showing genuine interest in Chinese culture are all ways you can do business in China.

Bureaucracy

Long bureaucratic procedures, particularly registration, licensing, and permits, will remain a persistent problem in China. If you want to do business, you must have a business license that allows your business to do business and details your activities.

Despite the Chinese government’s efforts to reduce and streamline bureaucratic processes, foreign companies continue to complain about bureaucratic barriers that hinder their growth plans by doing business in China. In addition, the lack of transparency in this process and the unfair interpretation of regulations make it much more challenging for foreign firms to compete.

Logistics Issues

Despite the Chinese government’s progress in repairing logistics problems in the country in recent years, shipping things to consumers in China can be highly complex and costly.

Also, large freight vehicles are completely restricted from some urban areas at certain times of the day. Therefore, products have to be transferred to smaller vehicles just before they reach consumers. This seriously complicates the optimization of bulk shipping and distribution. Also, many of the warehouses, cargo, shipping, and distribution centers in China are ancient. Because it is old, it is entirely devoid of automation. This makes it much more challenging to reach the Chinese market.

Trust Building Problem with Overseas Partners

For many companies in China, having highly reliable partners abroad is indeed very important. However, a weak partnership can negatively affect a firm in many different ways. Building trust with overseas partners can take a lot of time, and there are many problems inherent in doing business abroad. First of all, culture and language make it very difficult for both parties to agree.

For example, critical information can be lost entirely during translation, and the process of establishing a profound connection can take much more time. It has been even more difficult to develop these relations, especially in the process of very little trade travel in China due to the Covid-19 pandemic.

Slow Progress of Things

Doing business in China takes a much longer process than it does in many western countries. For example, British firms would fail to do business in China because they generally want to move forward quickly. Because in Chinese culture, it is essential to establish a strong relationship before trading. This means that you may have to meet with Chinese companies several times before making a deal. Chinese businesspeople have a much longer decision-making process than business people in many European countries. During this period, you must be prepared for this and wait for Chinese businesspeople to decide.