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A toolbox for doing business in China

Of all the incubators that have popped up for the use of Canadian businesses, few could be further afield than the one that the Canada China Business Council just opened - in Shanghai.

The facility has 14 hot desks that itinerant business people can use to accelerate their business dealings in the world’s most populous nation. The organization – a non-profit dedicated to fostering bilateral trade and investment – also has incubator space in Beijing.

“We hope to see dozens of companies use this space and quickly graduate to their own offices and operations over the next couple of years,” writes Sarah Kutulakos, the CCBC’s executive director, in an e-mail. She’s currently working from Shanghai, and is in close touch with Canadians doing business in China.

But before you show up at the CCBC’s doorstep, you have to get to China first.

Entering a market so distant and so different can be daunting. Fortunately, the Web offers a wealth of resources to help you take your first steps. As you scope out the prospects, here are some places to start:

Help others help you

One strategy to find resources for a foreign business venture is to take a two-pronged approach: Search by geography, as well as by sector.

Geographically, information and financial resources are available at the federal as well as the provincial levels in Canada, and there are often corresponding regional programs in China.

For instance, the Hong Kong Trade Development Council can help locate partners and suppliers in China.

Meanwhile, specific industries often have sector-specific trade associations, which stay abreast of developments in international trade. The Canada Chinese Business Council maintains an online library of sector-specific information.

The federal government’s Department of Foreign Affairs and International Trade has centralized many of its China-related resources on its China in Canada page ], which helps lay out the breadth of federal services, from export development (through Export Development Canada , which can help with export insurance and financing) to locating Canadian trade offices across China.

Some of the most extensive resources come from the Canada Trade Commissioner , which offers dozens of updated profiles of specific Chinese sectors, from agri-food to clean energy.

Get with the (master) plan

Since the days of Mao Zedong, China’s growth has been guided by a succession of five-year plans (or, latterly, “guidelines”).

The most recent is the 12th, which spans from 2011 to 2015.

Getting up to speed on the plan is an important step for companies looking to see where their offerings might mesh with the government’s goals.

Consultants KPMG offer an overview of the plan here.

It’s worth remembering that China is hardly a homogenous market: Smaller centres in central and western China (which, as Ms. Kutulakos points out, are still larger than Canada’s biggest cities) are less saturated by foreign business, and can be more welcoming. The five-year plan can clue businesses into their needs.

“Understanding the plan will also help one understand how the cities/provinces in which one is doing business need to grow in order to meet their goals,” Ms. Kutulakos says. “Companies that can help them succeed will be welcomed with open arms.”

Tackle cultural barriers

Language is an obvious challenge in a foreign market, though many Canadian businesses have successfully done business in China without having learned Mandarin or Cantonese.

The less-obvious, but perhaps more important task is to learn about Chinese business culture. Take a look at sites like the China Law Blog, published by a boutique international law firm, which not only delves into questions of Chinese law and finance, but gives an insight into the way that business (and life) is transacted there.

Or seek out individual training in business culture from Canadian organizations like TLI –The Mandarin School , a Toronto-based consultancy that specializes in teaching Chinese business culture as well as language.

Lawyer up

Online resources will only take you so far.

Ms. Kutulakos says that it’s not uncommon for businesses, eager to move quickly in the Chinese market and occasionally under pressure from local partners who are themselves rushing to meet deadlines, will sign contracts without having them vetted by Canadian or Chinese lawyers.

“This is a recipe for disaster,” she says. “Every company doing business in China needs to have competent legal counsel onside, from the beginning.”

She adds that lawyers, like consultants, accountants and government support, are all part of a “big toolbox” that companies need to take their business to China.

No one tool will meet every requirement. It can be a hassle – but “the opportunity in China is still too large to pass up.”

By Ivor Tossell

Special to Globe and Mail Update
Published
Last updated

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