More on investing or doing business in China. For UK tech businesses wanting to achieve global expansion, China is a player that cannot be ignored. In our recent roundtable discussion with several Cambridge-based tech startups, three Cambridge-based tech companies, Cambridge Mechatronics, ION Science, and Cambridge GaN Devices, shed light and offered insights on some of the challenges and issues common to many UK tech businesses operating in China.
Several key issues emerged from the discussion as the main challenges UK businesses are tackling with –
- Recruiting the right talents for key posts in China
- Managing working relationship with local partners
- Dealing with IP related issues
- Overcoming cultural differences in a broad sense
These are consistent with other studies and surveys on the subject.
A highly emphasised point focused on the necessity of having a local, physical presence to overcome regulatory, cultural and business matters. Despite being an extremely common issue, hiring employees in China continues to be a laborious yet delicate process.
Although China is recognised as a mass-producer of extremely hard workers, finding the appropriate local candidate that has sufficient international experience to handle both the Chinese and foreign business operations is notably more difficult.
For technology startups seeking out highly skilled workers for specialised roles there is an even smaller pool to choose from.
Regulatory restrictions further complicate matters. As it stands, overseas businesses are unable to directly hire employees in China. In order to do so, they will need to establish a representative office/subsidiary in China or seek out a licensed provider that will recruit locally on their behalf. These hurdles are the named few amongst many that explain why UK businesses are struggling to secure the suitable recruits for their China operations.
The other critical issue that goes hand on band with sourcing difficulties is communication. We use communication as a general term that can be broken down into separate issues. In part we are referring to the linguistic difficulty with regards to understanding Mandarin and local dialects.
Even though English is considered as the universal language, it is important to note that in order to be valid in China any employment contracts must be in China’s official language, Mandarin. On the other hand, we are also referring to taking an empathetic approach to the wider cultural and professional boundaries. In China, group harmony and consensus is more highly regarded than individualism.
Therefore any cultural misunderstandings and tensions can rapidly lead to irrevocable damages to reputations and relationships. Unpacking similar Chinese and British cultural differences on a personal and professional level are essential for successfully recruiting and operating in China.
We at Crayfish.io aim to encourage this expansion and will be elaborating on these issues and more over the next month. In the meantime, should you have any questions feel free to get in touch.