The (long and winding) road to China

  • 14th August, 2018

As the proverb goes 'a thousand mile journey starts with a single step' and having just returned from a very productive delegation visit to Henan province with Sir Geoffery Clifton-Brown, we can see the road ahead which will herald new opportunities between the UK and the province with a population of 100 million. 

However, it can still be a difficult journey even for one of the world's biggest companies who awkwardly hit a licensing roadblock, after initial reports suggested otherwise.

Facebook - whose social network is blocked in China - had registered a subsidiary in Hangzhou with the aim of supporting "Chinese developers, innovators and startups" through an innovation hub. Like Shenzhen, Hangzhou is known for its tech: the tranquil tourist city near Shanghai is famous for Alibaba, among others. Facebook's successful application was reported worldwide, but the dream wasn't to last; the company's business registration was swiftly revoked hours later in a bureaucratic disagreement.

It was moving fast and breaking things, but not in the way intended.

According to a New York Times reporter, the Cyberspace Administration of China (CAC), China's central internet regulator, was "neglected" and miffed that it hadn't been consulted more closely, leading it to scupper the agreement.

We're not going to comment further on this, and this isn't a dig at Facebook anyway. Entering the China market can be tricky, whether you're behind the world's biggest social network or not. As Facebook themselves might say: it's complicated.

While British companies are encouraged to participate more ambitiously in China, certain barriers remain. BritCham China noted after the China-UK Strategic Dialogue that "a large part of certain sectors are still closed off from international competition and we'd like to see an easier obtaining of licences and also more of a level-playing field for UK businesses here in China".

But don't let any of this put you off. Here are a few things to keep in mind, so that you're better prepared:

  • China's regulatory landscape, that includes ministries, provinces and cities, is complex, and knowing who to engage is essential.
  • Face time is important: as usual in China building strong relationships (what is known as guanxi) is vital. Keeping the conversation going, and matters like knowing where to sit in meetings, all add to the fun.
  • There are more hurdles than usual to surmount, no matter how trivial your objective might seem. Registering a website in China, for example, involves paperwork. Even registering a social media account has its challenges, while this is something that can be achieved in minutes on an international platform like Twitter or Instagram Chinese social media accounts can be complex to initially set up.

Lastly, don't give up! The success of any western business in the Chinese market can be huge and is based on several factors - including patience and tenacity - and we are here to help you all the way.