China street

Over the past decade, China has become a veritable economic powerhouse. The Chinese market has helped to launch and grow hundreds of UK businesses and, despite the current widespread media debate around the state of the Chinese economy, it is still registering a healthy rate of growth and there are still huge opportunities for UK entrepreneurs in China. Here, I list the five most important things that all entrepreneurs should know about China in 2016, so that they can successfully break into the market.

  1. Make the most of positive Sino-British trade relations
Although it is well known that Britain and China have very positive trade links, many entrepreneurs are not aware of the various UK networking organisations that exist to assist UK entrepreneurs and small and medium-sized enterprises (SMEs) to access the Chinese market and investment. Foremost among these groups are the China Britain Business Council (CBBC) and the 48 Group Club, who have excellent contacts and decades of experience.

Networking groups like these can provide UK entrepreneurs and SMEs with the knowledge and connections needed to take those first steps to break into the Chinese market or to tap into investment from the region.

  1. Make sure your business operates in the right sectors
The Chinese economy is currently transitioning to meet the needs of its growing and affluent middle class. As such, the market is focusing less on traditional manufacturing and more on consumption, thereby driving consumer activity internally.

This means that there is a particularly strong opening in the market for UK businesses with established brands or new technology. Media companies, especially those in entertainment and technology, are extremely well placed to benefit from Chinese investment or potential joint ventures. Equally, financial services firms and property development businesses are well-positioned to secure interest from the Chinese market.

  1. Learn about the Chinese market and the country’s unique business culture
The UK and Chinese markets are complementary, but vastly different. This applies to both customers and investors. So, it is hugely important for UK entrepreneurs not to rush into China but rather to learn as much as possible about the market before diving in.

I would recommend travelling to China as much as possible to learn about the culture and the unique way of conducting business. While there, seek out the opportunities where UK SMEs can partner with existing Chinese ventures, including those supporting China’s Belt and Road Initiative, which is set to link China to at least 65 countries. Establishing a strategic partnership is the easiest way to initially enter the market.

  1. Make sure you’re prepared
In addition to getting to know the Chinese culture and business customs, it’s important for entrepreneurs to prepare themselves and their business for the sheer size and demands of the Chinese market.

China has 14 cities that are home to over 5 million inhabitants and a total population of over 1.3 billion. As such, it is important not to underestimate how difficult it can be to crack the market. This said, with perseverance, it may well turn out to be the best business decision you make as an entrepreneur.

  1. 2017 could be an even better year for UK business in China
Despite some of what is said in the media, there will be ample opportunities for British business in China in 2017. As the Belt and Road Initiative develops, there will be many opportunities for UK SMEs to partner with Chinese business in third markets. There will also be more Chinese businesspeople seeking to expand into the international markets, creating opportunities for Chinese investment in UK SMEs.

By Dr Johnny Hon, Anglo-Chinese entrepreneur, investor and philanthropist. Founder of Global Group