By Nathan Lee, TLE Correspondent
For the 11th consecutive year, China has been identified as one of the world’s top destinations for international business re-location. The Chinese rate of development continues to draw in foreign investors from around the world.
China is one of the world’s fastest-expanding major economies displaying growth rates of roughly ten per cent over the past three decades. This, combined with the fact that China now boasts the world’s second largest economy, has transformed the country into an increasingly attractive option for both businesses and individuals alike.
Major sectors in China such as technology and finance continue to draw of expats working in these fields from around the world.
As China’s financial centre, Shanghai has attracted a number of international businesses in the finance sector. It is also an important economic, trade and shipping centre in the country.
Hong Kong’s four key sectors – financial services, trading and logistics, tourism, and business services – are the driving force behind Hong Kong’s economic growth. It retains its position as one of the world’s leading global cities – its GDP surpassed that of Switzerland in 2006 and its growth continues into this decade.
The story of China’s growth is not limited to the economy alone as it leads the way in terms of education but increasingly technology. More than 8,000 high tech businesses can be found in the Zhongguancun Scientific and Technology Park in Beijing alone.
Another economic hotspot in China, is Shanghai, which leads many Chinese cities in economic performance, foreign trade growth and infrastructure development. With the opening up of more sectors to foreign business owners, more and more foreign funds are flowing into the city.
Shanghai now generates about 8.3 per cent of China’s gross industrial output value, ten per cent of its ports’ cargo-throughput, 25 per cent of the total value of the country’s imports and exports and 12.5 per cent of the total revenue of China. The average price of offices in Shanghai ranges from RMB 3000 – 6000 per person per month.
Hong Kong’s service-oriented economy is characterised by its low taxation, almost free port trade (WHAT DOES THIS MEAN?) and well established international financial market. This makes it a popular choice for businesses looking to establish themselves.
The average price of office space in Hong Kong ranges from HK$3500 – 15000 per person per month, with the Central district being the most high-end rental choice.
Office space vacancy rates in both Hong Kong and Shanghai are among the lowest in the world meaning that it can be extremely competitive to re-locate and find the best office space with reasonable rates.
Chinese culture and proper etiquette are both an integral part of local business practice. As a result, becoming familiar with these is crucial to future business success.
Two of the most fundamental Chinese beliefs include:
1) A strong emphasis on hierarchy and respect for authority. It is crucial to develop an understanding of not only where one is positioned in terms of company hierarchy, but also where others are positioned with regard to each other, and the power dynamics between them. This includes those outside of the company as well.
2) Saving “face” (which is synonymous with pride or self-respect). Punctuality, reputation and social standing all influence “face”.
These fundamental beliefs inform proper etiquette. This includes (but is not limited to):
The correct greeting
To address someone properly, their title and family name should be used. A handshake is followed by business card exchange. The card should face upwards and both hands should be used to offer or accept the card.
A proper thank you
This should be issued after business dinners and social occasions. Hand written thank-you notes on personalised stationary are customary.
These are considered a valuable part of communication. They may be used to make the negotiating opponent feel uncomfortable, placing them on the back foot.
Making an effort to eat with chopsticks (as it is the cultural norm) is appreciated by the Chinese.
As counter intuitive as this seems, social drinking is common during business meetings as a means by which to gain ones trust.
John Williams, Head of Marketing at Instant says: “Chinese cities lead the way in terms of both technology hubs but also creative centres with Beijing now famous for Zhongguancun and its Dashanzi Art District. Hong Kong is not far behind with its Kowloon district a tech powerhouse.
The Chinese economy is now embracing social technology and other business disruptors and given the sheer size of the market they can generate significant scales very quickly.
It is is an extremely exciting market to be working in and a global draw for businesses who want to open offices there’.
Recent major leasing deals in Hong Kong include Hanergy, Huatai Financial, China Securities International and Shunfeng Photovoltaic International.