How Britain’s SMEs can tackle the Chinese market

Gary Berlyn, managing director of The Business Channel.TV, discusses the opportunities a growing China presents British SMEs.

China is gearing up to become the world’s largest economy. While the phenomenal growth experienced over the last three decades is expected to slow, the rate of change shows no signs of declining.

The Chinese government has set the 2014 growth target for the economy at 7 per cent and while this rate is lower than China has experienced in previous years, it is still incredibly high when compared to the rest of the world.

Regional growth

Some of the most exciting changes taking place in China are the developments happening in the country’s more rural central and western provinces. These regions are expected to only continue to grow as investment in infrastructure in the country’s smaller cities will be required in order for the Chinese government to meet its economic growth targets for the coming year. As a result, many of the opportunities for British businesses, especially SMEs, are in cities that most UK companies have never even heard of. 

Because of the scale of the Chinese economy and the speed of the changes taking place, it can be a challenging market for any company, not least a British SME. As a result, it is important for SMEs to remain focused and make sure they can keep up with a market that is changing so dynamically.

Approaching the Chinese market

As British SMEs begin to think about conducting business in China for the first time, they need to do their homework. SMEs can get carried away with the buzz around the country’s economy to the extent that they risk committing to more than they have the capacity to deliver. It is simply too big of a market to cope with it at the same time and so it is advisable to choose a geographic focus early on in the research stage.

After picking a target location, it is important for SMEs to identify and learn about their competitors that exist both within China and internationally. By researching competitors it will be easier to identify niches in the market into which they can pour their attention. Many other practical questions should also be given thorough consideration before attempting to enter the Chinese market.

These questions include:

  • Who should we partner with? 
  • Should we trade directly or indirectly within China?
  • Do we have intellectual property that needs to be protected? 
  • How will we handle cultural and language differences?
  • What Chinese laws and regulations will impact our work in the country?
  • How best can we recruit employees that are knowledgeable about the Chinese market?

The most important thing to understand, however, when considering entering the Chinese market is that there is support available. For example, the China-Britain Business Council (CBBC) with their 10 regional offices in the UK and 13 offices in China, and UK Trade and Investment (UKTI), offer British businesses advice and assistance to make sure British SMEs get off to the right start.

Additional information about opportunities for British SMEs in China can be found in the CBBC programme series, which is available for free on The Business

More on business in China:

Further reading: International business growth

Hunter Ruthven

Bernard Williamson

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.