By Gerry O’Reilly, founder and CEO of Sinowei

Since making the decision to open its markets to the world in the late 1970s, China’s place on the universal trade platform has been guaranteed. Its growth set new records for speed, and it wasn’t long before people started referring to China as the “factory of the world”.

Initially, China’s extraordinary growth was based on its exports, but it wasn’t long before the country started to focus on its import market. Whilst this import market is heavily regulated, it still represents a great opportunity for post-Brexit Britain.

What Is The Chinese Trade Market Like?

It’s important for businesses wanting to tap into China’s lucrative import market to understand the driving force behind the growth of this market.

Thanks to the development of trade and investment, millions of citizens in China’s middle classes are enjoying new prospects together with surplus income for the first time in their lives. The country’s economy is becoming more consumer driven as a result. Imported goods are often seen as holding a higher worth than domestic products, enhancing their appeal to the more affluent middle classes. Because of this, numerous sectors such as health goods, luxury fashion, consumer electronics, vehicles, and food and drink, are in high demand in China.

Furthermore, China’s import market isn’t solely in its larger cities such as Shanghai and Beijing. The demand for imported products has expanded to the country’s smaller cities and towns. This expansion has been aided by the internet as e-commerce and online platforms that support community buying, ensure those in more rural areas can buy imports.

Combine this with the UK’s established reputation for tradition and the provision of quality items, British businesses looking to export to China are in a strong position and primed to make the most of the exciting opportunity this rapidly growing market represents.

Tackling China’s Challenging Character

China has a reputation for being a challenging country to go into trade partnership with. Regulations are not only changeable and littered with red tape but vary depending on the region or area of the country you’re working with. It’s easy to think of China as not worth the effort of entering the market, especially when you consider its tendency to favour local businesses.

However, the country is slowly changing, which means now could be a good time to explore its potential further.

Relations between the UK and China have improved. Measures such as tariffs being cut and free-trade areas being introduced have boosted the infrastructure necessary for straightforward trade – not to mention the Belt and Road Initiative (BRI), also known as the New Silk Road which promises to make trade far easier for businesses. Plus, the Chinese government are signalling a keenness to embrace a more transparent China – at the start of 2024 alone, Chinese government officials held a series of mutual meetings with global countries that included the UK.

Despite all this positivity, companies should be aware that exporting to China won’t be challenge-free.

What Challenges Face Businesses Wanting To Export To China?

As well as regulatory challenges, companies face cultural and competitive issues when contemplating trading with China.

Regulations & Taxes

There is a lot of red tape to tackle when exporting to China. The country’s customs network is vast and complicated – businesses must ensure they have the right permits and licenses for the products they’re supplying to legally export the goods. This is the same for all countries, but it is made trickier with China because it involves extensive applications in Mandarin, and its accreditations (including trademarking and back-label approvals as well as CIQ, AQSIQ, and GACC) change on a regular basis.

Mandarin Is A Must

It will be helpful to trade with China if you’re fluent in Mandarin – at the very least, you will need to use a Mandarin translator to assist you during the trade process. It is the dominant language in China and although plenty of Chinese business people speak a good level of English, without knowing or having Mandarin translated for you will make completing a business deal virtually impossible.

Understand The Culture

You don’t want to offend a potential trade partner by accident, through a lack of understanding of the culture and correct manners. It’s worth working with an agent who understand the Chinese culture extensively and can help you build relationships effectively.

View China As A New Start

Businesses need to consider the Chinese market as something new to trade with, rather than simply scaling their business model into a new country – it requires a different approach to other markets to avoid being seen as a “Westernised” company, something that is a current concern in China among those that dislike the thought of its central values and traditions being eroded by the countries exporting to it. It’s important to approach China carefully and with a willingness to put in a great deal of time and effort to making a success of becoming trade partners – without this level of commitment, it’s not worth taking on this market.

Do You Have What It Takes To Make Exporting To China Work?

Firstly, you need to be more than simply curious about China – to establish a Sino-English business successfully takes the longer-term view and a high degree of determination, care and planning.

The country offers a great deal of potential to British businesses, however it expects a lot in return. China requires understanding and an appreciation of their country and how it operates – a business will need to meet customers’ needs whilst at the same time respecting the country’s culture and etiquette.

China is made up of several markets, with needs varying from region to region. Businesses must recognise this and be prepared to assign an appropriate budget and effort, and to give endeavours time to work.

While it’s definitely easier to build a trade relationship with China today than it was previously, there are still significant challenges. Companies must show that they take China seriously – it isn’t enough to rely on the fact there is consumer demand and political goodwill. Invest time into building the relationships, working with a partner who understands the culture as well as laws and customs, and tap into a slowly-gained and gradually built-up base of loyal customers. Remember – if you want to succeed in China, you have to be serious about it and you have to dedicate time to achieving your goals.

Gerry O’Reilly is founder and CEO of Sinowei which has been marketing and selling authentic Western products through key digital platforms in China since 2020.