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It is important to build trust with Chinese business partners and maintain regular contact, including travel to China. Ensure that the most senior executives of Australian companies are able to meet with Chinese partners to avoid insults. If this creates difficulties, one way to solve this problem is to get the title of the person who knows the subject best. Some Australian companies have also found that using Skype or video conferencing instead of phone calls helps them build trust with Chinese partners and business contacts.
Chinese entrepreneurs are becoming more confident and business-minded. They have succeeded in developing themselves, and many believe that they do not need foreign partners, especially when serving the rapidly expanding domestic market. Those who performed well during the last Asian financial crisis may be particularly harsh in the negotiations. For Australian companies, these changes may mean that Chinese companies are often less willing to join a partnership or demand higher prices and higher value transactions. When locals think their own products or business models are as good (if not better) as foreign investors, they are reluctant to give up majority control or most future profits.
Therefore, in order to find a voluntary partner, Australian companies need to provide more than just financial resources. Today, Chinese companies have many alternative sources of domestic financing, including domestic private equity. Australian companies that provide technology or expertise may be better when seeking Chinese partners, especially in China, where they are currently being promoted as “encouraging industries”. These include high technology, green technology and new energy, as well as certain parts of the automotive industry. Australian companies can also attract Chinese partners by offering strong brands or foreign markets to help their partners gain a competitive advantage or expand overseas. There is growing concern about emerging markets in Central Asia and Southeast Asia and Africa.
In order to find the right partner, a designated team may be helpful, including field professional consultants and agents to find the right target. The team's main functions include conducting market analysis of participants, meeting stakeholders and officials, and establishing the necessary relationships to begin discussions on any transaction. Therefore, understanding Chinese business culture and etiquette is the key to making the most of these opportunities.
When looking for partners in China, Australian companies need to consider in advance the issues that may arise after the transaction, such as local talent recruitment, management and retention, and building flexibility and adaptability in the business model. Find partners who have the experience in the local industry and are familiar with the differences between local consumers and industry segments to understand how to implement ideas. Most importantly, these partners must have the resources and relationships that complement you. But the alliance is accompanied by their risks. The importance of trust and regular communication cannot be overemphasized.
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ChinaCoCheck.com is committed to reducing the risk of companies trading with Chinese enterprises. As a developing country, China has a large market in various fields. More and more overseas enterprises are willing to conduct cross-border trade with China to gain profits. How can we be sure that the Chinese companies we're working with are trustworthy? Our detailed enterprise credit investigation reports will tell you whether the Chinese company is a trustworthy business partner or not...Read More >
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