26.05.2023

Doing Business Under Chinese Rules

Doing Business Under Chinese Rules

Mikhail Trinoga, head of e-legion development, Rumia Rakhimova, development director of CITIC Telecom CPC, and Anastasia Valova, managing partner of Sinoruss Consulting agency took part in the discussion. The event was moderated by Vadim Glushchenko, the Director of the Center.

Chinese and Russian companies are now actively cooperating, including in the IT sector, and are seeking to deepen this interaction and actively expand mutually beneficial industry partnerships, thus contributing to the development of the digital sector of the economy. The speakers discussed the specifics of cooperation between Russian and Chinese companies based on their unique experience of working with business partners from the Celestial Empire.  

Mikhail Trinoga spoke about how Russian and Chinese users perceive digital products. He pointed out that you need to understand what Chinese websites look like and how Chinese people perceive text in order to enter the Chinese market. Without customization, the product will not gain popularity because users will simply not understand how the application or Web site functions. Another peculiarity is that the site needs to be duplicated in the Chinese super-app WeChat, where all kinds of business processes take place. From its beginnings as a messenger service, WeChat is now an inseparable part of every Chinese person's life: from ordering food and booking hotel rooms to a payment tool. 

In her presentation, Rumia Rakhimova explained why the market in the Asia-Pacific region is so attractive to foreign players. The reasons for this are, among other things, the high purchasing power, the growth of the population and the possibility to localize production at low cost and high quality. However, there are also barriers, such as fierce competition, linguistic and mental peculiarities, and difficulties in meeting regulatory requirements for operating in Asian markets. "China is undoubtedly an Eldorado for business in terms of market capacity and the population's high demand for liquidity. In ten years, China's millionaires are expected to double from 5 million to 10 million. On the other hand, to be successful in the market, it is not only necessary to have a good understanding of what product to launch and how to sell it, but also to ensure that business processes are aligned with local legislation. For example, China's ICT infrastructure is closed to the outside world, so personal data protection and Internet access requirements are particularly stringent," she concluded. 

Legal peculiarities of cooperation with China were told by Anastasia Valova. For example, it should be mentioned that in order for a company to enter the Chinese market, it is necessary to have an intermediary already in China who has all the necessary licenses. However, such intermediaries need to be verified, as fraud is very common, and therefore it is better to choose the companies from the list of verified ones. She also talked about the principle of “chābùduō” (差不多), which means "this too can be done" - which is very common in China. "In order to get what you want, you have to be clear about what you want, otherwise you may get “almost the same”, for example, a white vase with blue flowers when you asked for a black vase with red flowers, because for the Chinese, details are not as important as we think," she noted. 

Summing up, Vadim Gluschenko said that despite the differences in mentality and approaches to business, Russia and China have many points of convergence and excellent opportunities to become successful business partners, including in the IT sector.