In order to succeed in China today you should opportunistically choose the right path and place yourself in the correct direction. Here below I list some of the analysis and actions that may improve your position in this changing environment.
What and How to Offer
Foreign enterprises need to carefully understand the forces that are shaping the market today in order to align their own offer with the opportunities that they create. Carefully and opportunistically choose your product, its development and applications, in order to take advantage of new consumer’s needs and government development paths.
There are several agencies that may help you in this choice: chambers of commerce, trade associations, bilateral committee and foreign government agencies may have started initiatives in sectors of your interest. For example in the 7th joint meeting of China-Italy Government committee held in May 2016 were mentioned the “five packages” (i.e. Energy/Environment Protection, Agriculture, Healthcare, Aviation Aerospace, Urbanization) as key cooperation areas.
Persons who directly face the development dynamics and understand how of the actual changing environment answers may play a strategic role to develop your business.
Introduce yourself together with a group of enterprises focused on specific sectors may also help you to gain visibility in front of the government and better protect your interests against large SOE, either if they are playing against or with you.
Innovate to Stay Ahead
The leading technological position of a company in China will not last long if not supported by continuous efforts in R&D.
China’s growing investments in R&D, and attempts to encourage its domestic industry to strive for quality and efficiency produced positive effects. Leading Chinese companies are now able to develop their technological capabilities, both in China and in international markets.
Moreover, despite official documents often request to enforce IP protection, the existing rules are still poorly implemented, especially in regard to FOE. In addition, the government may also specifically request the transfer of technology in exchange for market access.
Foreign business therefore needs to maintain and expand investments in long-term R&D and rapidly respond to the evolving needs.
In 2016 China’s government state that foreign enterprises based in China may participate in state science and technology projects, with policies that provide tax reductions for R&D to also apply equally to them.
Cultivate the Talents
Have the right strategy to attract and develop talents is also very important in the China of the “new normal”. It may happen that the central or local government, in order to rank you, ask for the presence of prominent specialists or managers and/or talent development program you may have established.
Identify critical roles, and ensure that the right people are assigned to these roles. The best-performing companies put their talent where it matters.
Advanced technology and talents development program may help to attract talents especially from the young generation. Offering them a chance to excel will increase your possibility to attract them and retain longer.
Let leaders have visible impact. Especially in large companies it can be difficult for individual to make a mark. Ambitious leaders may end up looking elsewhere, leaving your company with candidates who are okay with a bureaucratic status quo.
Break glass ceilings for Chinese leaders. Diversity in top management will be more critical, both to retain the best Chinese talent and gain a deeper understanding of the local market. You should manage succession and promotion to ensure that strong candidates know they may have a way at the top.
Stay tuned for the salary market and frequently audit the offer of companies that may compete for the same resources you need, in order to strategically set your offer according to your plans.