Doing business with China: Sufficient Commitment and Courage Needed!
Translation of the editorial (in Dutch and French) in Fokus International Business by Smart Media Agency.
Since mid-2020 the Chinese economy has been experiencing a spectacular recovery, leaving ‘democratic’ countries far behind. As EU entrepreneurs, should we switch to a higher gear in this ‘year of change’ or focus more on our home markets?
Whether you like it or not, if you are active in today's international business environment, there’s a good chance that one day you will be faced with the ‘China factor’, be it as a potential export market, a source for your raw materials or finished products, a possible investment opportunity, a potential partner or any other opportunity or challenge. EU SMEs must have an international perspective. In February 2021, China surpassed the United States as Europe’s largest trading partner. The corona crisis – resulting in a stronger demand for medical equipment – is only part of the explanation.
Doing business with China remains a challenge for many EU SMEs. As a result of China’s growing assertiveness and technological power, there is also a growing perception in Europe that China poses a threat to the Western world. Current geopolitical developments and the inability to travel to China contribute to this feeling of ‘disconnection’ with China.
However, this should not cause us to hit the pause button with respect to China. On the contrary, this ‘year of change’ offers a unique opportunity to look forward to a new phase of cooperation with China.
A proactive approach is the best strategy for EU companies. Although this may not be so obvious at first glance, China is still in demand for high-quality Western products and technologies. It offers prospects for EU SMEs which are traditionally strong in niche businesses. We should not be naive though, it is important to build on our strengths.
During my daily activity as a China consultant, I also see some positive aspects of this exceptional situation: while in the past many entrepreneurs often bought a ticket to China, signing contracts with Chinese partners without really knowing them or understanding the Chinese market, now they have no choice but to inform themselves and seek assistance from government agencies, China consultants or other experts.
To conclude, also this: cultural differences or communication problems are not the main cause of project failures in China, nor the choice of the Chinese partner. All too often a lack of perseverance and follow-up of the China project by the EU company itself is the cause of the problem. In other words, sufficient commitment and a healthy dose of entrepreneurial spirit make the difference between success and failure, something I would like to see more from EU entrepreneurs.
Bart Horsten, China consultant and entrepreneur, Managing Director Horsten International