Exporting to China

China is the great economic success story of the last 30 years. It is a huge market for UK businesses in everything from technology to luxury food products. The UK exported over £23 billion of goods and services to China in 2018.

Huge potential market

China is the largest country in the world by population, with over 100 cities of more than a million people. There is a fast-growing business and consumer market. Even with modest economic growth, China’s economy offers great opportunities.

Demand for quality

China’s increasing numbers of middle- and high-income consumers are focusing more on high-quality products. And as Chinese companies expand overseas, they need services and expertise to support them.

Better business environment

There are still challenges in China, but the business environment and market access for exporters has improved. China climbed the World Bank ease of doing business ranking by 15 places in 2019. It is now higher than some European countries.

World Bank Ease of Doing Business score 2019

31st

out of 190 countries (World Bank, 2019)

Currency

Yuan

Business language

Mandarin Chinese

you are likely to need a translator

GDP per capita

$9,610

UK is $41,030 (IMF, 2019)

Economic growth

6.6%

2019, IMF

Time zone

GMT+8

Opportunities for exporters

A focus on importing to support the domestic market is bringing opportunities. Government policies and initiatives, including the Greater Bay Area and Belt and Road, and the growth in e-commerce are also opening markets. Trade links through Hong Kong remain strong and can be a good route for exporters.

Doing business in China

Preparing to export

Standards and regulations

Not all Chinese standards are aligned with established international standards. It is important to check the laws, regulations, standards and certification requirements that apply to your business. Sectors like medicine and food require registration and certification.

The Standardization Administration of the People’s Republic of China is responsible for standards.

Intellectual property (IP)

As a first step, we advise you to speak to an intellectual property lawyer if you think you need patent protection when exporting.

IP risks in China are real and should be considered early. However, the IP and legal systems have developed so that risks can be managed in most cases.

UK-China Cooperation on Intellectual Property: gov.uk

UK-China Intellectual Property Newsletter: gov.uk

List of lawyers and translators in China: gov.uk

Operating in China

Routes to market

The Chinese market is complex and it can be challenging. Make sure you factor in costs involved in getting products into and around the market, including:

  • marketing for a huge territory
  • tariffs
  • taxation

You’re advised to seek advice and practical help from China business specialists before entering the market. A number of market entry options are available to UK businesses. Some of the most commonly used are:

Agents, distributors or other local partners

Having a local presence on the ground with native Chinese speakers is essential to build sales in China due to:

  • the sheer size of the market
  • language and cultural differences
  • the importance of personal relationships in Chinese business culture

Because of the size of the market, you should consider having more than one agent or distributor.

Do your due diligence to ensure that you are working with credible partners. Think about how well they know your sector and how well they will represent your product, brand and values.

Direct investment

Direct investment is an increasingly viable option for developing your business in China. This could be via:

These options give you the advantage of more control over your business development activities in China, but all of them can carry financial, commercial and reputational risks.

You should expect activities involved in establishing a permanent presence, for example dealing with authorities and recruiting and training staff, to be more challenging and take longer. But over the longer term this approach can be the most effective for growth.

E-commerce

With a potentially massive audience and increasing use of the internet and e-marketplaces, selling online can be a successful route to market in China.

Be aware of differences in user behaviour and plan for this, for example Chinese users generally trust paid search results more than organic results. Chinese language will be required on any China-facing pages of your own website.

You’ll have to operate through Chinese online channels. Many global web browsers, search engines and social media platforms, such as Facebook, are not available in China.

Baidu is the most commonly used search engine in China and WeChat is a hugely popular multi-purpose messaging, social media and mobile payment. DIT can suggest online marketplaces to help you get started. DIT’s E-Exporting Programme can also help.

The China Britain Business Council and the British Chamber of Commerce in China are useful sources of further information on routes to market in China.

Risks

Understanding the market and business culture is important. Government control still affects many areas of the economy. Consider getting specialist help in areas like market research and legal advice.

You should also consider legal advice around data protection and other laws. The legal process can be expensive, but alternative dispute resolution is becoming more common.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.